Ray Davies' marital problems during this period began to affect the band adversely, particularly after his wife, Rasa, took their children and left him in June 1973. Davies became depressed; during a July gig at White City Stadium he told the audience he was "fucking sick of the whole thing", and was retiring. He subsequently collapsed after a drug overdose and was taken to hospital. With Ray Davies in a seemingly critical condition, plans were discussed for Dave to continue as frontman in a worst-case scenario. Ray recovered from his illness as well as his depression, but throughout the remainder of the Kinks' theatrical incarnation the band's output remained uneven, and their already fading popularity declined even more. John Dalton later commented that when Davies "decided to work again ... I don't think he was totally better, and he's been a different person ever since."
Preservation Act 1 (1973) and Preservation Act 2 (1974) received generally poor reviews. The story on the albums involved an anti-hero called Mr Flash, and his rival and enemy Mr Black (played by Dave Davies during live shows), an ultra-purist and corporatist. Preservation Act 2 was the first album recorded at Konk Studio; from this point forward, virtually every Kinks studio recording was produced by Ray Davies at Konk. The band embarked on an ambitious US tour throughout late 1974, adapting the Preservation story for stage. Musicologist Eric Weisbard: "[Ray] Davies expanded the Kinks into a road troupe of perhaps a dozen costumed actors, singers and horn players. ... Smoother and tighter than on record, Preservation live proved funnier as well."