Dr. Dre reportedly lost $200 million in his Beats-Apple deal after he leaked the information prematurely to Tyrese.
Diddy was the one who told Beats co-owner Jimmy Iovine that Dr. Dre had spilled the beans to Tyrese, who went live on Facebook and announced that the legendary producer was about to join the Forbes’ list of billionaires.
In a new book by New York Times reporter Tripp Mickle called After Steve: How Apple Became a Trillion-Dollar Company and Lost Its Soul, the reporter claims that the deal struck in 2014 to buy Beats Electronics created by Dr. Dre and Iovine nearly went up in smoke after the news was leaked before anything concrete had taken place.
Back in 2014, Hip Hop rejoiced when Dr. Dre announced he was the first billionaire in the industry, causing the news to run wild. However, that moment left Iovine shaking out of fear that the deal will be called off.
The deal did go forward but not at the agreed price, which caused Dr. Dre not to achieve the coveted “First Billionaire in Hip Hop” title as Apple went on to shave down an eye-popping $200 million off the final purchase price.
The initial agreement for the buyout was $3.2 billion, but there was a need for strict confidentiality until the deal was finalized.
“It was a sum that Iovine and Dre could barely fathom,” Mickle said. “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.”
Understanding the implications, Iovine had cautioned his team and Dr. Dre- “Whatever you do, don’t talk about this,” he said to the team and said to Dr. Dre. “Remember that scene in Goodfellas where Jimmy tells the guys, ‘Don’t buy any furs. Don’t buy any cars. Don’t get showy’? Don’t move.”
However, within hours, Dr. Dre couldn’t keep his mouth shut, and he told of all people, Tyrese, who broadcasted the news live on Facebook! It was Diddy who called Iovine to tell him about the video.
“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,” the book reads, according to iMore. “Iovine pulled up the video and cringed as he saw Tyrese bragging about being drunk on Heineken in a recording studio.”
The video had several people in it, but it was Dr. Dre. Who made the announcement after being prompted by Tyrese. Iovine went into panic mode and damage control, Mickle said as they went to meet the new CEO of Apple, Tim Cook.
“When word of the video reached Cook, he summoned Iovine and Dre to Cupertino [Apple’s headquarters in California],” he explains. “He invited them into a conference room for a private conversation. Iovine was anxious and afraid that Cook was going to kill the deal. Instead of the anger and cursing that would have poured out of Jobs in a moment like that, Cook exuded calm,” the report said.
“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.”
The reporter says the video caused Dr. Dre and Jimmy Iovine to lose out on $200 million as Tim Cook used the rapper’s social media shananigan to demand the terms of the deal be changed. It seems that $200 million less was just enough to ensure Dre didn’t become a billionaire.
The end result was that Apple acquired Beats By Dre for $3 billion, and while that is still an enormous amount of money, it was enough to snatch the title of Hip Hop’s First Billionaire out of Dr. Dre’s grasp.
At the time, no reason was given to the public as to why the sale was lower than what was initially agreed, with speculations that Beats Music’s low subscriber count was to blame.
The move by Apple cut short a dream for Dr. Dre, who was eventually beaten at the title by Jay-Z, who became hip hop’s first billionaire in 2019.
Up to 2022, Dr. Dre has been named hip hop’s second-wealthiest hip hop star, but he has not touched billionaire status as his net worth is $800 million.