The Music Mogul
Jay-Z has bult an empire on the back of his hip-hop stardom with a cigar in his hand.
From the Print Edition:
Jay-Z, May/June 2009
Shawn Carter—best known to the world at large as Jay-Z, rap megastar and reigning monarch of hip-hop—extracts a Zino Platinum Crown Series Rocket from its sci-fi-sleek metal tube. He trims the end and fires it up with a palm-sized blowtorch lighter covered in black reptile skin of some sort.
Then he exhales a cloud of smoke with an air of satisfaction—right there in his New York City office.
Yes, Manhattan has strict no-smoking laws. But the outlaw impulse dies hard. After all, this is the king in his castle—or at least the business version of it. The true castle, the one he shares with his queen, singer Beyoncé Knowles, is a massive penthouse in Tribeca. This room, however, is impressive enough. Call it the nerve center for a dynasty: his office at Rocawear, the urban clothing concern he cofounded in 1996 as an adjunct to his fledgling Roc-A-Fella Records. The clothing company occupies the better part of two floors of a mammoth office building in the Garment District.
"If I'm in New York, I'm mainly here," Jay-Z says. "This serves as central headquarters."
His office, with its 39th-floor views of Times Square and the East Side of Manhattan, is sprawling: bigger than most New York apartments and lavishly tasteful, with massive mahogany pieces dominating two walls and a large desk holding down one end of the room.
There's a sitting area with couches and an elaborate coffee table, on which are piled art books on the work of Ed Ruscha and Damien Hirst. A large flat-screen TV on one wall is tuned silently to CNN. The walls are dotted with photographs, which make their own statement about his place in the world and the pantheon in which he sees himself: a row of images by photographer Herb Ritts of supermodels Naomi Campbell, Christy Turlington and Cindy Crawford (all of whom are friends of Jay-Z); a famous picture of the Beatles and Muhammad Ali; a photo of the Rat Pack—Frank Sinatra, Dean Martin and Sammy Davis Jr. Perhaps most significantly, there's a black-and-white portrait of the late artist Jean-Michel Basquiat, arguably the first African American to conquer the serious art world with a hip-hop sensibility.
On this day, Jay-Z, who has been a GQ Man of the Year, is in relaxed mode: a black sweater, white T-shirt, jeans and sneakers, along with Urkel-ish black-frame glasses.
He settles his lanky 6-foot-2 frame into a comfortable-looking straight-back chair and savors the cigar. Though he can name the most expensive bottle of wine or shot of Cognac he's ever had, he can't name the most expensive cigar he's ever smoked.
"I like Montecristos—those are probably some of my favorites," Jay-Z says, referring to Cuban versions of that brand. "But I like a bit of everything: Romeo y Julieta, Partagas. One of my first favorites was Dunhills, when I first started smoking them. But I go back and forth. I think it's like anything else: sure, you can find good, inexpensive cigars, but the things that are really good are the ones that cost.
"I like them bigger but mild. It gives the appearance of smoking something heavy—but it's not. It's just relaxing. I don't know the lingo—like 'It's got an oaky flavor,' stuff like that. It's just based on what I like. No one schooled me in cigars, like no one schooled me in how to buy art or drink wine," he says, although his taste in wine is pretty exquisite, such as Sassicaia, the great Italian wine. But, he continues, "A cigar is like a gift you give yourself. I smoke at times when I'm relaxing, or celebrating."
There's been plenty to celebrate for Jay-Z. If anything, the music career (and all of its offshoots) that began in 1996 with the founding of his record label, Roc-A-Fella Records, and the release of his first CD, Reasonable Doubt, has been one long celebration, with victory after victory in a musical field that Jay-Z himself refers to as "a competitive sport."
Competitive sports, of course, require champions. Forbes magazine placed Jay-Z at No. 7 on its Celebrity 100 power rankings in June 2008—just behind Johnny Depp, Tiger Woods and Jay-Z's wife, Beyoncé, and ahead of Brad Pitt, Steven Spielberg and LeBron James. On the same magazine's money rankings, he came in at No. 10, ahead of Will Smith, David Letterman, Madonna and Alex Rodriguez. The magazine estimated his annual pay at $82 million; published estimates of his personal wealth run as high as $350 million—and that was before his most recent big deal with concert-promotion giant Live Nation. Jay-Z himself shrugs at suggested figures when queried. (He won't discuss his marriage to Beyoncé at all: "You need to have certain parts of your life you don't talk about. I'm not hiding it; I'm just not giving details.")
Jay-Z's reach is vast, with tentacles, as he refers to them, extending into a variety of ventures. For starters, there's Roc-A-Fella Records, now an imprint of Def Jam Records. He and his partners sold a half stake to Def Jam in 1997 for $1.5 million; they sold off their remaining share in the label for $10 million in 2004. Jay-Z's first 10 albums—released between 1996 and a short-lived retirement that began in 2003—sold 33 million copies.
Then there's Rocawear: the massively successful clothing line was sold to Iconix Brand Group for $204 million in 2007. "We sold off the women's line, the kids', the bags—but we kept the men's line, which is the parent company," Jay-Z says. "And I maintain creative control of that."
Not that he has any designs on being a designer. "I never had those aspirations," he says. "I know what looks good aesthetically—or I should say I have my personal taste that the culture gravitates to. Me? I couldn't draw a stick figure."
There's also his string of 40/40 sports bars; his premium vodka, Armadale; an endorsement deal with Armand de Brignac's Ace of Spades Champagne; a partnership in an advertising agency that focuses on multicultural consumers. He owns a piece of the NBA's New Jersey Nets (who are scheduled to move to Jay-Z's native Brooklyn in 2010 or 2011). He's appeared in ads for Budweiser Select, Hewlett Packard, the NBA. His signature sneaker (the first for a nonathlete) was a best seller for Reebok. And he's become politically active, campaigning for Barack Obama in 2008 and taking up the cause of access to clean water in the Third World ("Really, it's a civil rights issue," he says).
He made his most recent major move in 2008, signing a deal reportedly worth $150 million with Live Nation. It was billed as a so-called 360 deal, one in which Live Nation would partner with Jay-Z on all of his creative output: not just recordings, tours and merchandise but all entertainment ventures, including film, publishing and a record label (Roc Nation) through which he can discover and promote new talent.
"It encompasses so much," Jay-Z, 39, says, studying his cigar. "I believe what it's about is a true partnership. We're building this brand and participating in the equity. It's about extending the brand beyond one platform. The music industry made so much money from music that it didn't care about anything else."
Jay-Z's own music has earned him the title of world's best rapper—whether as Jay-Z or his alter egos, Jigga and J-Hova. Still, he nearly walked away from that throne when he announced his retirement from performing and recording in 2003 (before coming back in 2006 with Kingdom Come). Retirement wasn't a new idea, "When I started, I had a goal," he says. "I was going to make an album—a gold album. And then I was going to be the owner of my own label. Telling my story through my music was just a means to getting into the business."
Retirement didn't stick. "I think he figured out that he had a lot left to do," says Michael Rapino, chief executive officer and president of Live Nation.
When he returned, Jay-Z reclaimed his position, though up-and-comers such as Lil Wayne (and Jay-Z protégé Kanye West) provide a steady challenge. Jay-Z recognizes that, no matter how good his music, hip-hop is intensely competitive and ever-changing. In the rap world, the long-running artist regularly confronts an unwinnable battle with gravity.
"There's a time when you're white-hot. Everybody knows who you are; everybody wants to listen to you," he says. "But you're always fighting gravity. Rap is about the sense of discovery: Who's the guy who's rapping about the new thing, the next thing? Who's the guy who's on your iPod? And you take it to school and say, 'This isn't coming out for a month and I've got it now.' That's all part of the conversation."
As a young man, he rapped about his life on the street, the ins and outs of the drug hustle. On his 2006 comeback, Kingdom Come, his subject matter was life as a CEO, enjoying the kind of luxe existence that a mega-million-dollar fortune can buy. "I like South Beach, but I'm in St. Tropez," he rapped on "30 Something" from that album—which had the biggest first-week sales of any of his releases but wound up selling only about one-third of what its predecessor, The Black Album, did. Jay-Z sees that as part of the game.
"The challenge of longevity is that you got to come out of the door being who you are. As you grow and mature, you lose that mass audience. But you still have a connection with the people who grew with you. I feel the need to grow—and that's not always popular in hip-hop. They want you to make your first album again. But you can't. You'll always have new guys trying to pull you down. There will always be the new hot guy saying, 'You ain't shit.' And those things do pull at you."
For Jay-Z, music is an art—but it's also a product—and he's worked hard to establish the Jay-Z brand. He wants it to be as familiar as any household good. "Branding is about creating a consistent message," he says. "All the great brands that have been around forever, things like Johnson & Johnson, have that. I know that, if I have a baby and I need some lotion for that baby, I've got to get that pink bottle from Johnson & Johnson."
Rapino says, "We have two completely different deals with him—the Jay-Z deal and the Shawn Carter deal. Jay-Z is that completely rare artist who is not only king of his genre but one of the greatest of all time as an artist. And if you look at Shawn Carter the businessman and what he's accomplished, he's got to be in the top five of the most successful businessman-artists. He definitely grew up in the street—but he's got incredible intuition and skill in being able to turn that on-the-ground training into a real business."
Street" is not a euphemism—Jay-Z made the move to successful musician and entrepreneur at the age of 26 after spending almost a decade on the streets of Brooklyn (he grew up in the Marcy Projects), dealing drugs at the height of the crack epidemic, a time when his neighborhood could have been mistaken for the Wild West.
He's made no secret of his past. Indeed, his early albums amounted to a combination chronicle/confessional/celebration of that life. His honesty about both his high and low points, along with his blend of verbal facility and lyrical fluidity (and an ear for beats that just don't quit), marked him as a uniquely talented rapper.
"I believe that first album was so successful because I was really just trying to talk to a specific group of individuals," Jay-Z says. "I've heard records where you know the things they're talking about are not real. But I was out there living that life and I was trying to get every detail into my music. I had the experience of going to my shows and having big guys crying, saying, 'Man, you're telling my story. You're in my brain.'"
When he decided that his talent as a rapper was a gift he could not ignore, he put that lucrative drug business (one in which he had somehow avoided both a criminal rap sheet and a fatal or crippling encounter with a rival or customer—or the law) behind him to focus on music.
"The thing that made me stop doing it was that I had a talent," he says. "And I had people saying to me, 'You have a true talent.' I believe in karma, that everything happens for a reason—call me crazy, but that's what I believe. So knowing that I had talent—and doing what I had been doing to get by—I knew that I had to give the music 100 percent of my time. I had to leave the streets alone and give it my all. But if I'm honest, I'll tell you that if the music thing hadn't worked, I would have gone back."
He and his then-partners, Damon Dash and Kareem Burke, recorded his first album themselves and pitched it to the leading record labels. When none of them would take a chance on an untried rapper, the three men launched their own label, Roc-A-Fella, and put Jay-Z's first album out themselves, relentlessly touring East Coast clubs to promote the album. Reasonable Doubt was successful enough that Def Jam offered Roc-A-Fella a distribution deal. With his third album, Vol. 2 … Hard Knock Life, a bit of autobiography built on a hook sampled from the Broadway musical Annie.
After feeling his way into the business world as CEO of his own burgeoning label, Jay-Z has grown into an urban businessman and entrepreneur legitimate enough to help stump for Barack Obama during the 2008 presidential campaign. He spent time with the candidate on the campaign trail and was invited to Obama's presidential inauguration, where wife Beyoncé performed. There's awe in Jay-Z's voice when he talks about being in Washington, D.C., for the historic event. "There was this euphoric feeling in Washington," he says with a smile. "There was such a great mood. I'd run across people who'd been there when Martin Luther King [Jr.] had his march—people who never thought they'd see the day America would elect an African-American president. Speaking to Obama on the three or four occasions that I did was surreal. Where I come from, you never think you'll end up having a normal conversation with the president of the free world. It gave me this huge sense of accomplishment. I've won a couple of Grammys and that felt great—but this was something way beyond that."
Despite his own political activism—for Obama and on behalf of the issue of clean water—Jay-Z has no political ambitions of his own. "I'm not a politician," he says. "I've been through too much dirt—and I tell the truth. It would never work for me.
"But I don't think you should have to have a spotless record to run for office. We want people who are honest, who will stand up. Life is complicated. You do things when you're young that you wouldn't do now. Everyone has written with a crayon on their mother's wall. That doesn't mean you'd do it now. What we don't want are crooks. You look at all these people who graduated from Princeton and Harvard, who are supposed to be pillars of the community—every day in the newspaper arrested for some kind of financial fraud. Then you look at someone like Michael Phelps. He's 23. What's he gonna do? He's a kid. He's going to experiment."
Obama's election, Jay-Z says, offers minority youth a positive role model, something he didn't have growing up in his neighborhood. Instead, he looked up to the drug dealers who became the "gangsta" heroes—tragic or otherwise—of the rappers and rap fans in the 1980s and '90s. "When I was growing up, there weren't role models like doctors and lawyers in our community, nobody on TV who looked like us," he says.
"People need to understand: nobody makes a decision to risk their life, to stand in front of their mother's house and bring danger to her doorstep by selling drugs. That's a decision you believe you have to make, because there aren't other choices. That starts with people with no education, with low self-esteem. Those are people who think, well, what am I really risking? This is my life and I don't love it. If this is my life, well, it's worth risking it—because if I make it, then I can have a better life. I can buy my mama a house and myself a great car.
"Obama represents so much hope for blacks and Latinos. The hope he represents is bigger than any of the huge problems he could possibly correct. When you have positive role models, you can change your life for the better. The day Obama got elected, the gangsta became less relevant."
Jay-Z maintains a sense of detachment from his own drug-dealing past. It provided the street cred he needed to launch his rap career. Yet he recognizes now that the crack epidemic of the 1980s and '90s decimated his neighborhood and community—and that he contributed to that. He doesn't excuse it. But he doesn't apologize for it either.
"At the time, I couldn't see that," he says. "I think that's why I was able to get out—because my heart was pure. Once you have the knowledge of the effect it's having—and then you still do it—then you'll be punished. I believe in that karma. If you have the knowledge and you still continue, then there's something wrong with you.
"I know exactly what crime is—but you start to become a cynic when you see it existing at every level of society. This kid I knew was 16 and got 15 years in jail for selling drugs. And Bernie Madoff is living in a beautiful apartment on house arrest—and he's robbed the nation blind. You start to say, 'Man, this is unfair.' So yeah, I know what crime is."
Having launched his own record label—and then created a business empire of his own—Jay-Z became the focus of a bidding war between Warner Bros. and Def Jam when he announced his retirement from recording and performing in 2003. He finally went with Def Jam, because the deal included regaining ownership of the master recordings for all of his albums—a hugely valuable property. While running Def Jam, he launched the careers of a number of stars: Ne-Yo, Young Jeezy, Rihanna—as well as nurturing the recording and performing career of Kanye West, who'd gotten his start producing tracks for Jay-Z. Still, Jay-Z harbors no illusions about his own business acumen.
"I never had a desire to be a businessman," he says. "I never had a job—forget about running a company. When we started Roc-A-Fella, we didn't read a book about running a company. We just did what needed to be done. Do I think I could run any company? Naw. Like, I can't see me running Google or something like that. Everything I've been involved with are things I could touch, things I could have a passion for. Music, fashion—they're an extension of the culture. Running Def Jam, I knew that I knew what a hit single sounds like."
Asked how he developed his sense of business, he says, "One thing I always lived by is that I always try to make a fair deal. I don't want to make deals where I make all the money and someone else gets hurt. There are a lot of guys who do business that way. I don't want $1 over what I'm supposed to get.
"And the other thing is, I go by intuition. I have to have a good feeling about the people I'm getting into business with and the things I associate myself with. I never do something for money or because it's cool."
The most relevant lesson of the street? "You know, when they say there's no honor among thieves—that's not really true. When I was on the street, you had to carry yourself a certain way. You had to treat people fairly because that's how you survived. Then everyone would want to deal with you. That's how you develop a reputation as a good guy to deal with.
"If you go back on your word when you're on the street, they don't take you to court; they don't file a lawsuit. You can cause yourself some real problems. You had to be a stand-up guy or you could place yourself in peril. When I first came into the music business, I'd have these conversations with executives and we'd shake hands on something—and the next time I saw them, they'd say, 'I never said that.' So I'd say there's no honor among businessmen."
So what does he know that generations of MBAs don't—the kind who were running Lehman Brothers, AIG and others of the dominos that toppled the country into economic chaos with subprime lending and credit default swaps?
"That's probably the problem—they know too much," Jay-Z says with a knowing smile. "The problem was arrogance, not ignorance. They started thinking, 'I'm so smart, I can borrow the same money twice. I can lend the same money six times—and then take that debt and sell it.' They figured, well, Lehman Brothers will never go broke, so I'll never have to pay that debt. Then one day it happens and that $1 million you lent is suddenly $700 trillion kazillion and there's no way to get on top of it.
"That's not ignorance. That's an intelligent, conniving person. That's intelligence and arrogance."
As high as he's risen, Jay-Z recognizes how quickly it can all disappear. A single bad decision in the universe of the Internet and the 24-hour news cycle can shatter a carefully constructed career. Still, it took him a while to learn the lesson; he's talked in interviews about his guilty plea to a misdemeanor charge after a 1999 stabbing incident in a New York club involving a fellow producer (who refused to press charges)—and how that made him keenly aware how quickly everything he'd worked for could suddenly disappear. (He got three years' probation.)
"I'm not who I was 10 years ago," he says. "The things I did 10 years ago are some of the stupidest things I've done."
In retrospect, he says, he should have followed the example of his boyhood friend and mentor Christopher Wallace. Wallace was Jay-Z's high school classmate in Brooklyn, who reached rap's pinnacle as the Notorious B.I.G. (also known as Biggie Smalls) before being shot to death in 1997, the victim of an East Coast—West Coast rap feud.
"Biggie was so mature," Jay-Z says. "I remember one time going to a club with him. There were a bunch of guys hanging around in front of the club; he didn't like the look of them and so he said, 'I'm not going in.' He was so much more accomplished than me. I thought he was just scared, but he saw the big picture. He knew by looking at those guys that, if he went in, he would be inviting trouble. I thought that was the reason to go in—to show you're not scared. But he went home. I look at it now and think, Wow, he was already at that point. "That's what I try to tell the younger artists I work with: that, aside from business, the decisions you make determine whether you'll be successful. You can go to a club and make a bad decision and ruin your career. So don't make stupid decisions."
These days, Jay-Z hobnobs with people such as former President Bill Clinton and billionaire Bill Gates. Still, it boggles his mind to think where they were 20 years ago (Gates running Microsoft, Clinton governing Arkansas) and where he was: selling crack on a Brooklyn street corner.
"If you asked me 10 years ago where I'd be, I'd have stopped so short I wouldn't even have been close," he says. "I mean, I was just on the road helping get the president elected. I wouldn't have imagined half of this—not even a quarter of it. I knew what I was speaking about was a real subject, but I didn't know the avenues it would open. Really, there's probably less than 1 percent of what I've done that I would have said, 'Yeah . . . '"
He talks about a ritual he has with Jacob Arabo (better known as Jacob the Jeweler, a favorite jewelry designer of rappers and NBA stars), in which they get together the day before Christmas each year to eat pizza—and caviar. "Caviar!" Jay-Z says in amazement. "I didn't even know what caviar was. Fish eggs? That's disgusting; that's repulsive. If someone told me they liked it, I would have thought they were fronting; I would have said they were being bourgie. Now I really enjoy it."
His guilty pleasure in life? Travel.
"I love experiencing new sunsets," Jay-Z says. "I love food and wine and sunsets. You give me a great sunset, a perfect meal, a great bottle of wine—and a cigar to finish it off—and I don't have a care in the world."
Marshall Fine is journalist and film critic whose movie reviews can be found at www.marshallfine.com.
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