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Livin� large and in charge

In the '80s, it was the leveraged buyout; in the '90s,

technology. But at the beginning of a new century, it's the selling of "cool"

that is building empires and making moguls.

Russell Simmons, Sean "P. Diddy" Combs, Damon Dash, Jay-Z and Percy "Master

P." Miller have yet to achieve the stupendous wealth of Bill Gates or Warren

Buffett, but they're shaking up the business world and corporate America by

making millions with what is surely the coolest widget around: hip-hop.

Hip-hop, which sprang out of America's black ghettos 30 years ago, was a

fringe youth culture that realized itself in rap music, DJ-ing, baggy street

fashion, break- dancing and graffiti. The so-called fad never was expected to

become America's pop culture, and it definitely wasn't supposed to yield


But in the past two decades a handful of visionary black entrepreneurs have

been able to leverage the lifestyle into a multibillion-dollar industry that

has spread to fashion, film, personal finance and even politics.

Today's hip-hop moguls are a cadre of high-profile, jet-setting businessmen

who exercise considerable control of the hip-hop industry through myriad

business ventures, political campaigns and philanthropic initiatives.

"Most entrepreneurs are singularly focused on one thing," top American

designer Tommy Hilfiger said. "But these guys have pushed the boundaries of

entrepreneurship when it comes to hip-hop."

Making it big

Indeed. Simmons, who started off as a promoter of rap concerts in the '70s,

went on to co-found Def Jam Records in 1984 and later built Rush

Communications, a multimillion- dollar media company that hawks the hip-hop

lifestyle through clothes, sneakers, cell phones and an energy drink.

Combs, who throws million-dollar bashes in the Hamptons every year, heads

up Bad Boy Worldwide Entertainment Group, a $315 million company that houses an

award-winning clothing line, a record label, restaurants, a film subsidiary

and now a 3,800-square-foot retail store in Manhattan.

Damon Dash and rapper and producer Jay-Z preside over the $450 million

Roc-a-Fella Records, which they cobbled together in nine years. Subsidiaries

include a clothing line, a film division, a vodka distiller and a fledging


Although his original label went bankrupt, Master P., who started afresh

with new label The New No Limit Records, continues to oversee a clothing line,

and steers the music and television career of his superstar son, Lil' Romeo.

"It's not surprising that hip-hop has created moguls," said Shawn Prez, who

heads up 32 Power Moves Inc., a Manhattan marketing company. "Hip- hop exudes

competitiveness. It's about excess, bling and bravado."

To be sure. All of hip-hop's chief executives run their empires as if they

are the eye in the proverbial storm. Their offices are often jammed with

corporate executives, marketing agents, music artists, fashion experts and a

swirl of personal assistants who attend to their every need. And as cell phones

trill, public-relations people pitch and the television blares the latest

video, they are usually hammering out another multimillion-dollar deal on the


It wasn't always like that. For decades, black entrepreneurship in the

entertainment industry has been spotty and short- lived. Stories of

chart-topping black artists who died penniless because they didn't have the

financial wherewithal to own their own product or the ability to compete with

mainstream record labels are legion.

Institutional racism, lack of resources and political clout were also at

fault, industry experts said.

"But then a lot of those barriers came down," said Clarence Avant, who

founded Sussex Records in the 1970s. "Simmons and these other guys also had

what some people didn't have: great business acumen. They were able to take

their businesses to another level."

The rise of hip-hop's chief executives occurred just as racial and class

barriers in youth culture began to melt away. And an increasing global economy

broke down similar divisions in the business world, experts said. "The only

color anybody was thinking of was green," said Tru Pettigrew, who leads

marketing company AMPDi.

Diversify and multiply

Simmons took his cues from self-made entertainment billionaire David

Geffen, who built record labels and movie studios, opened nightclubs and

produced Broadway musicals. Simmons realized early on that he would have to

diversify away from the cyclical record industry and align himself with large

corporate entities to branch out in other areas. He also made sure to cut deals

in which he still had a sizable stake in the alliance and was able to reap

fees or royalties.

"This," Geffen said, "is what made Simmons an excellent businessman. He

didn't need hip-hop to build an empire. He could have done it with anything."

Combs, Dash, Jay-Z and Miller would later emulate and build on Simmons'

business strategies.

Such moves have put them and Simmons at the top of hip-hop's $10 billion

industry, which includes CDs, DVDs and clothes, according to a Forbes magazine


And others are scrambling on the bandwagon.

Moguls-in-the-making include rap star Nelly, who has his own clothing line,

an energy drink and a stake in the NBA's Charlotte Bobcats.

Pharrell Williams, half of the producing team the Neptunes and chief

executive of the Star Trak recording label, has a new fashion line, Billionaire

Boys Club, and a high-priced sneaker called Ice Cream.

Eminem is putting out his own clothing line, Shady Ltd.

Still, the pioneers continue to have considerable market. Here's a glimpse

inside their businesses:


Title: chief executive, also known as the "Godfather of Hip-Hop"

Company: Rush Communications

Annual revenue: NA

Number of employees: 75

Called the Godfather of Hip-Hop because of his pioneering efforts in

building the hip-hop market, Simmons, 47, is one of the few CEOs who will

answer tough business questions with spiritual answers or explain corporate

strategy by referring to the Bhagavad Gita, a Hindu religious text.

"The universe says there is plenty of wealth to go around for everyone,"

Simmons says after being asked about the increasing competition to Rush


Simmons performs a spiritual ritual every morning, practices yoga every day

and is a vegan. But make no mistake, he's a hard-nosed businessman.

Simmons created the blueprint for hip-hop moguls, which is: Partner with

corporate giants, maintain partial ownership in the venture, get royalties or

fees, and expand into new markets.

Earlier this year, he sold Phat Fashions, his hip-hop clothing line, for

$140 million to apparel giant Kellwood, and continues to oversee the subsidiary

as its chairman.

He later moved into television ("Def Comedy Jam"), theater ("Def Poetry

Jam"), movie producing ("The Nutty Professor") and finance (the Rush Card and

Baby Phat debit cards). He also puts out an energy drink, a line of snazzy pink

cell phones and luxury watches.

His philanthropic arm gives away millions each year and his Hip Hop Summit

Network is registering voters in droves.

Simmons helped create the $10 billion hip-hop industry when he began

promoting rap acts in the 1970s. In 1984, he partnered with Rick Rubin, a rich,

white college student who was running a record label out of his dorm room at

New York University. Their collaboration created Def Jam Records, which

produced some of the biggest rap acts, including Run-D.M.C., LL Cool J and

Public Enemy.

In 1990, a lucrative deal with Sony Records - in which Sony and Def Jam

split the earnings down the middle - provided enough capital to fund Rush

Communications and enabled Simmons to move into other venues. In 1999, he

pocketed $100 million after he sold his stake in Def Jam to Seagram Universal

Music Group.

"Russell was one of the first people in the business to realize the

importance of ownership and the power of the joint venture," said Brett Wright,

who leads marketing firm Nu America. "People who didn't own their stuff got

left by the wayside; those who did got rich."

"I really don't know that much," said Simmons. "But I surround myself with

people who do. I would never go into a new business without first hooking up

with an expert in that field."


Title: chief executive

Company: Bad Boy Worldwide Entertainment Group

Annual revenue: $315 million

Employees: 600

If Russell Simmons is the "Godfather of Hip-Hop," Sean Combs, 34, also

known as "P. Diddy," is its fashion tycoon. His clothing line, Sean John, which

is upscale and chic, recently bagged the top fashion award from the Council of

Fashion Designers and is one of the top-selling urban clothing lines,

according to the NPD Group, a research company. It also is the crown jewel of

Combs' company.

Other subsidiaries include Bad Boy Records, which oversees the careers of

artists Mase, Faith Evans and Black Rob; Bad Boy Films, and two restaurants

called Justin (named after his oldest son) in New York and Atlanta. His

marketing company, Blue Flame Marketing and Advertising, has clients such as

Pepsi, Microsoft and Calvin Klein.

Combs is perhaps the savviest at leveraging his personal celebrity into a

brand. His annual Hamptons shindigs, gossip-page social life, last year's

charity marathon run, acting stint on Broadway and globetrotting to

star-studded getaways such as St. Tropez have kept consumers rapt and

constantly buying. Jameel Spencer, chief marketing officer at Bad Boy Worldwide

Entertainment Group, said Combs is focused, driven and "not one to take 'no'


"In fact, 'no' makes him want to do it more," Spencer added.

In 1991, 19-year-old Combs got into the business after begging Andre

Harrell, then president of Uptown Records, for a job as an unpaid intern. He

rose to A&R director in two years, but was eventually fired by Harrell. He

rebounded by launching Bad Boy Records, which quickly made a name for itself

after former crack dealer- turned-rapper Notorious B.I.G. began churning out


By 1996, Combs had hammered out a 50-50 partnership with Clive Davis'

Arista, which kept him in charge and gave him the right to buy Bad Boy's master

recordings. Ownership of master recordings, which few artists have, is a boon

for any entrepreneur who continues to reap royalties and fees whenever a song

is used.

In 1998, he started the Sean John clothing line. And last month he opened a

3,800- square-foot retail store in Manhattan, which sells $495 leather

jackets, $200 jeans and rhinestone-studded dog collars that go for $65 a pop.

He plans to open stores across the country and later in Europe.


Title: chief executive and major partner

Company: Roc-A-Fella Records

Annual revenue: $450 million

Employees: 500

Damon Dash is striding through a spacious townhouse with a cell phone glued

to his ear and reading Kanye West the riot act. West, a Roc-A-Fella rapper who

has his own clothing line, thanks to Dash, is trying to conduct business from

his cell phone as opposed to coming into the office to attend to details. "Yo,

man, you can't do business like that, man," Dash says heatedly on the phone.

"You don't make demands on the phone and expect business to happen. It doesn't

work that way."

A pugnacious sort, Dash is not good at sugarcoating. But when it comes to

nailing a sweet deal, he's a pro. The 33-year-old, along with star rapper Jay-Z

and Kareem "Biggs" Burke, head Roc-A-Fella Records Enterprises, which has

ventures in music, fashion, film and publishing. The company's biggest money

maker is Rocawear, a 5-year-old company that Dash decided to start after

becoming frustrated with the flagging profits in the record industry.

Still, it was the music that got him started in hip-hop moguldom. Dash

started Roc-A-Fella Records when he couldn't find a record label willing to

sign a tall, gangly, unknown rapper from Brooklyn named Shawn Carter. The move

was a smart one. Jay-Z, 34, exploded eventually, selling 17 million albums and

making millions for the label.

Later Dash was able to move into other venues, including Roc-a-Fella Films,

started in 1999, production company Dash Films in 2001 and Armandale Vodka in

2002. This year he launched America magazine, which focuses on fashion and

culture; a jewelry line in which the Tiret watches cost as much as $130,000;

and he's acquired the licensing to sneaker line Pro Keds.

A cigar line, a European cable TV channel, and a sports and boxing

promotion company are also in the works.

Known for his brash and aggressive style, Dash doesn't get high marks for

being a great boss or a great partner, some say. His manner reportedly has

strained his relationship with Jay-Z, fueling rumors that the rapper - who

announced his retirement last year - will leave to start his own company.

"Those are just rumors," Dash told Newsday. "But if Jay-Z leaves, he


If the rapper does leave, he will have plenty of fodder to start his own

hip-hop empire.

"Jay-Z has such a loyal following he can start anything and people will

follow," said Emil Wilbekin, vice president of brand development for fashion

designer Marc Ecko and former editor of Vibe magazine.

Jay-Z's other ventures include an upscale sports club called 40/40 in

Manhattan and a stake in an arena for the Nets basketball team near downtown

Brooklyn. He has also collaborated with Reebok to put out the "S. Carter"

sneaker line, which has become the company's fastest-selling shoe. The deal

marks the first time a major sneaker company has signed an artist rather than

an athlete to market its product.


Title: chief executive

Company: New No Limit Records

Annual revenue: NA

Employees: NA

Out of all the hip-hop moguls, Master P., 34, is the one most likely to be

overlooked, primarily because he is from the South and his once-thriving

enterprise is the first of all the hip-hop empires to face serious financial


But just a year ago, Master P., born Percy Miller, was the wealthiest

hip-hop mogul, eclipsing at one point even Simmons, the industry's pioneer. He

has made several appearances on Fortune's "40 Richest Under 40" list, his most

recent in 2003, which estimated that he had $361 million in holdings.

And in 1998, the Guinness Book of World Records listed him as the richest

music producer, who at the time had a net worth of $56.5 million.

Ten years ago, Master P., who grew up in the drug-infested projects of New

Orleans, took a $10,000 inheritance and opened a record store. Early on, he

displayed the business acumen that would soon turn him into a hip-hop mogul.

The store later evolved into No Limit Records and Miller kept the rights to all

of his master recordings. In the past eight years, No Limit sold 50 million

albums, 12 multiplatinum, 10 platinum and 12 gold records. Some of its artists

have included Snoop Dogg and now Mystikal, Silkk the Shocker and C-Murder.

Later, Miller expanded into clothing with his subsidiary No Limit Sports;

No Limit Films has put out a line of profitable direct-to-video movies and

feature films. He has since managed the career of his son Lil' Romeo, who has

sold 2 million CDs and has a series on Nickelodeon called "Romeo!"

He is also wrapping up two film deals with Walt Disney.

But the past year has been full of challenges for Miller, who tried out

twice for the NBA. His brother, rap star C-Murder, is embroiled in a high

profile murder trial. Earlier in the year, Miller pleaded guilty to tax fraud

charges, and in December, his original label, No Limit Records, filed for


In February he emerged again touting a new company, The New NoLimit

Records, and switched distributors, leaving Universal for Koch.

"Yeah, I shut down No Limit because it made good business sense," Miller

told ESPN. But "how can Master P. be broke? We've got our own television show

on Nickelodeon, we've got our own clothing company, our own jewelry company,

property, real estate - so what if one thing doesn't work; we work on another?"

Go to to:

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