 Upon his return the band began to prepare and demo material for a proposed third album but already on shaky ground and beset by management problems and tensions caused by Smith and Lee's interest in Scientology, Lone Star splintered in late 1978, CBS having pulled the plug due in part to the rapidly changing musical climate, with the rise of punk rock leaving bands like Lone Star seeming old fashioned.Tony Smith said "We were the right band at the wrong time, we lost popularity overnight when punk rock exploded on to the scene.I remember my girlfriend taking me to the Blitz Club in London’s Covent Garden, when it was all kicking off with Steve Strange and everything.