The Music Mogul

Jay-Z has bult an empire on the back of his hip-hop stardom with a cigar in his hand.

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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

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