Dr. Dre made an infamous video in 2014 celebrating Apple’s acquisition of Beats while heralding himself as “the first billionaire in hip-hop.” Now, a story from the new tell-all book After Steve revealed that the video not only cost Dre $200 million, but it almost sank the entire deal.
iMore reports that Tripp Mickle’s new book explores how an early celebration reduced the payout to Dr. Dre and Beats staff in the $3 billion acquisition in 2014. Chapter 10 of “After Steve: How Apple Became a Trillion-Dollar Company and Lost Its Soul,” describes Apple’s entry into music streaming in the early 2010s.
After some tough convincing work from Jimmy Iovine, a Beats executive and longtime friend of the artist and entrepreneur Dr. Dre, he managed to get Apple CEO Tim Cook on board with buying Beats Music and Beats Electronics. Despite resistance from Apple’s internal staff, the company agreed to a price that was initially well north of $3 billion.
Iovine told his team at Beats to keep everything under the wraps over the deal to avoid the possibility of Apple pulling out. The following day, Iovine received a call from fellow artist Puff Daddy alerting him of a video posted to fellow musician Tyrese Gibson’s Facebook. The video showed Dr. Dre prematurely celebrating the deal, calling himself the “first billionaire in hip hop.”
When news of the video reached Cook, both Iovine and Dr. Dre were called to Apple headquarters. Cook was reportedly disappointed but remained calm and reassured the pair that Apple’s resolve to acquire Beats did not change. However, Cook used the leak as leverage to shave $200 million off of the acquisition price.
This had the effect of leaving Dr. Dre shy of the $1 billion in net worth after the deal was complete. Apple purchased Beats Music and Beats Electronics in 2014, which turned into Apple Music. Mickle also noted that if it were Steve Jobs at the helm, it’s unlikely that he would have handled the situation nearly as well. Stay tuned to Thirsty for future updates.
What’s your take on this story? Sound off in the comments.