3 Kings

INTRODUCTION

I was flying somewhere over the Atlantic Ocean on a red-eye when word of the biggest deal in hip-hop history to date leaked. Apple had agreed to buy Beats, Andre “Dr. Dre” Young’s headphones and music streaming company, for somewhere around $3 billion.

The news started ricocheting around the Internet in early May 2014, after actor Tyrese Gibson released a grainy YouTube video. “They need to update the Forbes list,” he said, speaking of the magazine’s annual accounting of rap’s richest acts, while in the midst of a raucous party. “Shit just changed.” Then Dre floated into the frame. “The first billionaire in hip-hop,” he proclaimed. “Right here from the motherfucking West Coast!”¹

I discovered all this when I landed, groggy, in Milan and turned on my phone, only to be greeted by casual inquiries from friends, frenzied questions from colleagues, and urgent requests from print, radio, and television producers and reporters for insight into what the news meant for Dre’s wealth. Had he become a billionaire? Or at least the richest man in hip-hop? I should know. For the past decade, I’ve been charting the wealth of the top names for Forbes. After the Beats deal went through, I updated Dre’s total to $700 million—were it not for the taxman’s cut, the deal could have catapulted him to billionaire status then and there. Even so, today Sean “Diddy” Combs, Shawn “Jay-Z” Carter, and Dre are worth around $2.5 billion, per my latest Forbes estimates. They are not only the three wealthiest hip-hop acts in the country but the three richest American musicians working in any genre.

These three kings have built their fortunes by creating a 24/7, head-to-toe lifestyle. Because of them, we can start any given day by donning a pair of Jay-Z’s Reebok S. Carter sneakers and some Beats headphones, and then heading to a meal at Jay-Z’s Spotted Pig restaurant in New York. One might spend the next few hours watching Dez Bryant or Yoenis Céspedes, his sports agency’s clients, play an afternoon game, topped off with a glass of his Armand de Brignac champagne or D’Ussé cognac at his 40/40 Club. If the evening goes on to include a few shots of Diddy’s Cîroc vodka, it might be necessary to gulp down a bottle of his Aquahydrate alkaline water before slipping under crisp Sean John sheets and dozing off while watching something on his Revolt cable channel, perhaps Dre’s film Straight Outta Compton.

Just how the trio turned hip-hop into one of the world’s most influential and lucrative cultural movements is among the most fascinating business stories of our time. Diddy, Dre, and Jay-Z all grew up effectively fatherless, developed a flair for music, started their own record labels, and released classic albums before moving on to become multifaceted moguls. But despite the basic similarities of their backgrounds and trajectories, the three men aren’t so alike. If they all took the Myers-Briggs test, the results would likely be three different personality types. If anyone who knew the trio well had to cast them as Marvel superheroes, or Disney princesses, or Teenage Mutant Ninja Turtles, all three would inevitably end up in disparate roles.²

Their traits and paths offer three distinct blueprints for aspiring entrepreneurs. Legendary lyricist Jay-Z plays business like a chess game, plotting moves years—perhaps decades—in advance. Superproducer Dr. Dre is a quiet, intuitive perfectionist prone to social anxiety; he waited to extend his brand until he found something just right, with Beats. Diddy is a charismatic and blustery impresario who has shilled for everything from high-end spirits to acne medication. “I call myself a curator of cool,” he told me in a one-on-one keynote interview at South by Southwest in 2014. “I’m not always cool, but that’s what I like to call myself when I’m in the zone.”³

The trio grew up in kingdoms quite different from the ones they later built. Jay-Z’s Brooklyn was a gritty, crime-ridden borough unrecognizable from the yuppie utopia it has since become. Dre’s Compton, once an oasis that lured midcentury middle-class black families from the rust belt to California, fell victim to racist urban-planning schemes and economic blight. Diddy’s Harlem was similarly dangerous during the 1970s and ’80s, though it did boast quite a rich heritage. “Harlem became famous when disenfranchised black folks who’d migrated from the Caribbean and the southern states in the beginnings of the twentieth century had a chance to live and feel free for the first time,” says Harlem resident and hip-hop pioneer Fred “Fab 5 Freddy” Brathwaite. “This sense of freedom affected every aspect of Harlemites’ lives, hence the stylish swagger of folks like Duke Ellington, Count Basie, Bumpy Johnson, and Adam Clayton Powell Jr., [which] all led up to Puff Daddy.”⁴

That’s the sort of attitude that propelled Diddy to attend prestigious Howard University and then drop out to take a job at Uptown Records in the early 1990s—and, soon after that, start his own label, Bad Boy. Dr. Dre morphed from a teenage disco DJ into one of hip-hop’s first superstars as the sonic mastermind of seminal rap group N.W.A. in the late 1980s. Jay-Z’s education came from the streets, where he learned the laws of supply and demand while selling cocaine; eventually he plowed those profits into creating his own Roc-A-Fella Records to put out his debut after major labels passed. Indeed, many of hip-hop’s most prominent examples of entrepreneurship started out as matters of necessity.

As hip-hop opened the door for a wide range of trends in areas from clothing to cars, mainstream America started taking stylistic cues from rappers. By the 1990s, the genre had attracted not just inner-city fans but massive numbers of Midwestern suburbanites and Hamptons socialites. “They all wanted Rolls-Royces just because hip-hop has got Rolls-Royces,” says Russell Simmons, the founder of Def Jam Recordings and Phat Farm clothing.⁵ (As this book was going to press, Simmons was accused of sexual assault and/or rape by several women; he has denied the allegations.) Diddy, Dre, and Jay-Z replicated and improved on Simmons’s brand extensions by doing what he couldn’t as a behind-the-scenes executive: using their own songs and videos as an opportunity to promote their business ventures.

All three kings are now friends and collaborators—a remarkable feat, given that they found themselves on opposing sides of the deadly rap wars of the mid-1990s, which took the lives of Dr. Dre’s labelmate Tupac Shakur and Diddy’s close friend Christopher “Notorious B.I.G.” Wallace. In the wake of intense conflict, the kings reinvented themselves through business, each developing a different calling card.

Dr. Dre became the most sought-after producer in the industry, a beatmaker who could sell tracks for six-figure sums or use them to boost his label signees, including Eminem, 50 Cent, and Kendrick Lamar. Dre recognized a perfect collaborator in Beats cofounder Jimmy Iovine, whose effectiveness as an executive allowed Dre to focus on tinkering with the sonic side of things. Says Craig Kallman, chief of Atlantic Records: “He’s a consummate music man whose actions are all moved by passion and the emotion that he feels for a particular artist or song.”⁶

Dre used that energy to build a headphone line that competed not only with Bose and Sennheiser but with fashion and footwear brands for consumer dollars: a $300 pair of Beats became as viable an accessory as a similarly priced pair of Air Jordans. Though Dre functioned as the company’s compass for cool and more of an ideas person than an executive (he “wasn’t the business guy,”⁷ notes Noel Lee, the founder of Monster Cable, which manufactured all of Beats’ products for the first half decade of its existence), he displayed an uncanny knack for knowing when to get into and out of financial arrangements. He slipped away from Death Row, the label he cofounded in the early 1990s, months before it came crashing down; Beats fetched billions from Apple less than a year after nearly falling into bankruptcy.

Jay-Z became the most successful recording artist of the bunch. Every album he’s released has been certified platinum; he put out a multiplatinum album every single year from 1998 through 2003. Jay-Z has racked up more number one albums than any act in history besides the Beatles; on the business side, he’s sprinkled his stardust on companies he started and partnered with, turning investments in middling products into massive gains. Along the way, he’s won the respect of figures from Oprah to Obama, Bono to Richard Branson.⁸

One might say that Diddy is hip-hop’s Branson. Both are charismatic, outspoken front men for a staggering array of businesses, and though they both started out in the record business, their ability to identify and revolutionize other lucrative sectors truly set them apart. And just as another legendary founder, Steve Jobs, didn’t invent MP3 players—but found a way to make them sexy with the iPod—Diddy earned many of his millions by making flavored vodka synonymous with celebration, lifting Diageo’s Cîroc from relative obscurity and almost single-handedly making it the number two premium vodka in the world.

“It’s like watching Elon Musk today: because he believes in it, he’s driven an industry,” says Stephen Rust, Diageo’s president of new business and reserve brands. “When Sean believes in something and sees it in his head… don’t bet against him.”⁹

Diddy, Dre, and Jay-Z are modern embodiments of the American dream, but the details of their journeys are surprisingly scant. There have been only two major books on Jay-Z: his lyrics-oriented autobiography, Decoded, and my own business-focused Empire State of Mind. “That book was horrible!” the rapper once told me.¹⁰ (“He’s just messing with you,” explained Diddy when I relayed the anecdote. “He’s a good cat.”)¹¹ Dre is incredibly private and makes many of those who work with him sign nondisclosure agreements¹²; Diddy, while more open, has never been the subject of a business biography. Despite the three kings’ celebrity, their sagas have remained relatively unexplored in an in-depth capacity—and never together—until now.

In the coming pages, I’ll work to unravel the layers of mystery surrounding the lives of Dr. Dre and Diddy and add new insights into that of Jay-Z, providing some entrepreneurial lessons along the way. Together, their stories offer a lens through which to view the broader narrative of hip-hop and its journey from local fringes to the global mainstream. I draw on my encounters with all three titular characters, focusing on how their individual paths diverged and converged, each at times directly at odds with at least one of the others, before ultimately coming together.

Scores of others have played major roles in rap’s rise, and they make appearances in these pages as well. Among the hundred-plus figures I’ve interviewed: Kevin “Lovebug Starski” Smith, the rapping DJ arguably responsible for coining the term “hip-hop”; Fab 5 Freddy, the pioneering graffiti artist whose friendships with Keith Haring and Jean-Michel Basquiat helped advance hip-hop’s visual sensibility; and Theodore “Grandwizzard Theodore” Livingston—inventor of the scratch technique now used by nearly every DJ on the planet—who believes hip-hop was universal from the outset.

“People around the world were probably pretty much going through the same thing we were going through: single-parent homes, poverty, low income, school, drugs,” says Theodore. “This problem was not only here in New York.”¹³

While reporting my book, I traveled from the heart of the South Bronx to the fjords of Norway, speaking with pioneering behind-the-scenes operators including aforementioned Def Jam founder Russell Simmons, early artist manager Charles Stettler, and Bronx nightclub owner Sal Abbatiello; new-breed executives like Kevin Liles, Rob Stone, and Troy Carter; and stars of all stripes, including Kasseem “Swizz Beatz” Dean, Kendrick Lamar, and Shaquille O’Neal. I even interviewed Biggie’s mom.

Though the three kings have reaped the rewards of the hip-hop economy, the same can’t be said for many of the genre’s founding fathers. Some of them go as far as to suggest that modern rap should be viewed as an entirely separate category from the genre they invented, despite the fact that rap is widely understood to be a large circle within the Venn diagram of hip-hop; almost all acknowledge that the movement has changed drastically over the decades, for better or worse. “It’s really not my hip-hop anymore,” says Curtis “Grandmaster Caz” Fisher, a pioneering emcee whose lyrics—cribbed by the Sugarhill Gang—formed the backbone of the genre’s first commercial hit, “Rapper’s Delight,” in 1979.¹⁴

Caz is one of many who gave or signed away valuable music rights for a pittance decades ago, a showbiz tradition that has become a painful and indelible aspect of the hip-hop psyche, and likely part of the reason financial gain is so often flaunted when it does occur. Unlike rock music, which is in many ways a reaction against wealth, a core element of hip-hop is rejoicing in success.¹⁵ “Hip-hop from the beginning has always been aspirational,” Jay-Z told Forbes in 2010. “It always broke that notion that an artist can’t think about money as well. Just so long as you separate the two and you’re not making music with business in mind.”¹⁶

This book offers a peek into both the musical and financial sides of the industry, with a heavy dose of hip-hop history coming in the first few chapters. Most of the myriad characters mentioned in these pages deserve more ink than they’re given; to help keep track, I’ve created a dramatis personae at the back of this book. Throughout the narrative, as the kings ascend to the upper strata of the entertainment and business worlds, their circles grow smaller, and the names become fewer—and more recognizable to the casual reader.

In just a few decades, hip-hop has become deeply and profitably intertwined with mainstream global culture, and emcees born in other countries have gone on to enjoy great success locally and internationally. Take MC Solaar, the French rapper who debuted with the smash single “Bouge de Là” (“move a little”) in 1991 and by the 2000s was contributing songs to The Hills and Sex and the City. Or Tommy Tee, the godfather of Norwegian hip-hop, who took inspiration from the culture coming out of the Bronx in the early 1980s and went on to help launch a similar scene in Scandinavia at around the same time, complete with all the elements of hip-hop. “In the regular newspaper, they had break dance courses—‘How to Break-Dance’—for a whole summer,” says Tee, who has released several studio albums and runs his own independent label. “Now we have a generation that’s born in the nineties that grew up with hip-hop… everywhere.”¹⁷

More recently, the genre has given rise to a film that grossed north of $200 million worldwide (the Dre-produced N.W.A. biopic Straight Outta Compton), one of the most popular television shows in the United States (Empire, whose lead character is a mélange of the three kings, but particularly Jay-Z and Diddy), and the most-awarded Broadway show in recent memory (Hamilton, a hip-hop history written by a New Yorker of Puerto Rican heritage and performed by a cast that brought a much-needed blast of diversity to the Great White Way).

To be sure, Diddy, Dr. Dre, and Jay-Z alone weren’t responsible for all of hip-hop’s recent triumphs, nor were they on the front lines as the genre’s first champions smashed barrier after barrier that stood in the way of its early progress. They weren’t always model citizens either—all three had violent episodes, though none did any hard time—yet each man’s most serious brushes with the law served as a life lesson and a career turning point. Hip-hop is now America’s most-consumed genre, fronted by a generation of up-and-comers whose trail was blazed by Diddy, Dr. Dre, and Jay-Z. Despite their imperfections, the members of this trio combined to do something vital: transport a mature but evolving movement to places nobody dreamed it could go while providing an incredible set of entrepreneurial blueprints.

“Who thought we were going to be promoting Skittles?” asks former Def Jam president Kevin Liles. “Who thought that we would be in the headphone space? Who thought that we would get bought out? Who thought that we would own a streaming company? Who thought that we would have a five-hundred-million-dollar alcohol? And I don’t think we’re done.”¹⁸

It may have been Lawrence “KRS-One” Parker, the conscientious old-school “rapper’s rapper,” who put it best. One day, at a press conference, a writer asked him what he thought about the corporatization of hip-hop.

“I don’t look at it as the corporatization of hip-hop,” KRS said. “I look at it as the hip-hopitization of corporate America.”

The room fell silent.

“You’re not changing us,” he continued. “We’re changing you.”¹⁹