While Dr. Dre’s famous video celebrating Apple’s acquisition of Beats in 2014 saw Dre declaring himself the “first billionaire in hip-hop,” a story from a new book about Apple under Tim Cook revealed that the video cost Dre some $200 million, and possibly torpedoing the entire deal.
The episode comes from the book Tripp Mickle After Steve: How Apple became a trillion dollar company and lost its soul, which tells the story of Apple under the supervision of Tim Cook in the aftermath of the death of Steve Jobs. In Chapter 10, Michael begins introducing Apple’s entry into music streaming, explaining that CEO Tim Cook discovered Beats and wanted it because of human-curated playlists, but also because Cook wanted “a solution to the company’s failure to get into the music streaming business.”
Cook encountered some internal resistance over the deal, and had to argue with Jimmy Iovine for his insistence that Apple buy both Beats Music and Beats Electronics, but eventually Apple agreed on the price:
“It was an amount Iovine and Dre could barely comprehend. As the lawyers worked out the final details, Iovine summoned the Beats leadership team to his home near Beverly Hills. He told everyone they were about to wrap up a huge deal. The only thing that could screw up was word of the deal leaked. “.
“Whatever you do, don’t talk about this,” Iovin openly warned his team, even citing it good comrades Drew said, “Remember that scene in Goodfellas where Jimmy says to the guys, ‘Don’t buy any furs. Don’t buy any cars. Don’t dazzle?” He said. “Don’t move.”
Naturally, at 2 the next morning, Iovine got a call from Puff Daddy, in which Puff explained that Dr. Dre and rapper Therese had posted a video to Facebook revealing the deal:
At 2:00 AM, Iovine got a call from Puff Daddy, who was shouting that rappers Dre and Tyrese were talking about the deal in a Facebook video. Iovine pulled the video and grumbled when he saw Tyrese bragging about being drunk on Heineken in a recording studio
Dre famously announced that it was time to update the Forbes Rich List because he is now the number one billionaire in hip-hop music. According to Michael, Iovine panicked and worried that “everything is in danger”. Tim Cook was also apparently unmoved, but was calm about the situation:
When word of the video reached Cook, he summoned Iovine and Dre to Cupertino. He invited them to a meeting room for a private conversation. Eovine was worried and afraid that Cook would kill the deal. Instead of the anger and curses that would have rained down on Jobs in a moment like this, Cook exuded a calm. He told music executives he was disappointed and wished Dre hadn’t had an explosion on social media, but said the video didn’t shake his conviction that the Beats purchase was a good fit for Apple.
Michael goes on to reveal that Cook “used the social media fiasco to demand that the terms of the deal be amended”. He stated, “In the days that followed, Apple lowered an estimated $200 million from the bid price. The cut led to it being said that Apple had given Dre enough of a haircut to make sure he didn’t become a hip-hop billionaire.”
In fact, it was reported at the time of the deal by the New York Post that Apple had lowered the price by about $200 million, the exact amount that Mikkel is referring to here. At the time, it was suggested that a leak about Beats Music’s low subscriber count drove the price down, but Michael’s new revelations suggest it may have been Dr. Dre’s celebration of the deal instead.
After Steve – How Apple became a trillion dollar company and lost its soul
Inside Apple like never before.
Tripp Mickle speaks with more than 200 past and current Apple CEOs, as he tells the dramatic story of Steve Jobs’ death and explains in his own words “how Apple became a trillion-dollar company and lost its soul.”
We may earn commission on purchases using our links. Learn more.