Dr. Dre was reportedly in line to become the first billionaire rapper ahead of Jay-Z. But his excitement over Apple’s 2014 acquisition of his Beats brand reportedly cost him some $200 million dollars and made him fall short of that status.
The revelation was made by Tripp Mickle in a new book he wrote about Apple under the leadership of Tim Cook following the death of Steve Jobs, iMore reported. Titled After Steve: How Apple Became a Trillion-Dollar Company and Lost Its Soul, Mickle claimed Dr. Dre prematurely taking to social media to announce himself as “the first billionaire in hip-hop” while the deal was yet to be closed, gave Apple some leverage over the final acquisition price.
In Chapter 10, Mickle touched on Apple’s venture into the world of music streaming. Mickle wrote that after Cook got to know about Beats, he initiated acquiring the company because of its human-curated playlists and as “a solution to the company’s failure to enter the streaming music business.”
Cook eventually agreed to buy both Beats Music and Beats Electronics.
“It was a sum that Jimmy Iovine [Dr. Dre’s partner]and Dre could barely fathom. As the lawyers worked through final details, Iovine summoned the leadership team of Beats to his home near Beverly Hills. He told everyone that they were on the cusp of finalizing a massive deal. The only thing that could spoil it would be for word of the deal to leak.”
But in the wee hours of the next morning, Mickle wrote that fellow music mogul P. Diddy called Iovine to bring his attention to a Facebook video Dr. Dre and singer Tyrese had posted. The two reportedly spoke about the deal, and Dr. Dre made mention of making history as the first billionaire in hip-hop.
“At 2:00 a.m., Iovine got a call from Puff Daddy, who was screaming that Dre and Tyrese, a rapper, were talking about the deal in a Facebook video. Iovine pulled up the video and cringed as he saw Tyrese bragging about being drunk on Heineken in a recording studio,” Mickle wrote.
And though Tim Cook took issue with the video, Mickle claimed that did not cause him to cut the deal.
“When word of the video reached Cook, he summoned Iovine and Dre to Cupertino. He invited them into a conference room for a private conversation. Iovine was anxious and afraid that Cook was going to kill the deal,” wrote Mickle.
“Instead of the anger and cursing that would have poured out of Jobs in a moment like that, Cook exuded calm. He told the music executives that he was disappointed and wished that Dre’s social media outburst hadn’t happened but said that the video hadn’t shaken his conviction that buying Beats was right for Apple.”
Mickle added that Cook rather “used the social media fiasco to demand an adjustment to the terms of the deal.”
“In the days that followed, Apple shaved an estimated $200 million off its offering price. The reduction led staff at Beats to say that Apple had given Dre just enough of a haircut to make sure that he did not become a hip-hop billionaire,” Mickle continued.
Apple ultimately bought Beats for $3 billion. New York Post similarly reported Apple had trimmed the acquisition price by $200 million. The news outlet also assumed that was caused by Beats’ low subscription numbers. But Mickle, in his new book, claims the price cut was due to Dr. Dre’s over-excitement.