Dr. Dre famously said he became hip-hop’s first billionaire (a title actually held by Jay-Z) back in 2014 when he sold Beats Electronics to Apple, but his boasting about it caused an ungodly amount to get cut from the final sale price. According to HipHopDX via The New York Times reporter Tripp Mickle’s new book, After Steve: How Apple Became a Trillion-Dollar Company and Lost Its Soul, when Dre talked about the deal in a video posted on social media, Apple took the sale down $200 million due to a confidentiality clause in the initial $3.2 billion agreement.
If you don’t remember, the video was posted to Facebook by Tyrese, who was hanging out in the studio with Dre, both apparently drunk. As they shouted out South Central Los Angeles (Tyrese is from Watts, Dre is from neighboring Compton), Tyrese boasted that “the Forbes list just changed,” referring to the publication’s annual lists of top earners in the world of hip-hop. Dre backed up the brag, touting himself as “the first billionaire in hip-hop.” Interscope founder Jimmy Iovine, Dre’s partner in Beats, found out about the video from Diddy, who called him in the middle of the night after the video went up, prompting him to panic as Dre and Jimmy were invited to Apple’s headquarters by CEO Tim Cook.
They worried that the deal would get the ax, but instead, Cook used the opportunity to save Apple some money, adjusting the sale price by $0.2 billion. Ultimately, the deal worked out; Dre got to keep his boast, and Apple got to keep Beats, which is still paying off to this day. And really, what can you buy with $3.2 billion that you can’t get with $3 billion (although I’m sure he’d have loved the extra $100 million to give to his ex-wife)?
