How Rappers Like Jay-Z Went from Street Corner to Corner Office

Stories from the Financial Times. 
Dec. 17 2011 7:07 AM

Cash Flow

How rappers like Jay-Z have risen from do-rags to riches.

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The book is shot through with arresting insights, and the depiction of the power of marketing techniques informed by hip-hop, from Tommy Hilfiger sportswear, which artfully bridged the gap between classic American style and street fashion, to Barack Obama’s election campaign, is highly persuasive.

For the real deal on the business of hip-hop, though, you need Dan Charnas’s The Big Payback – a door-stopping 672-page chronicle of every shady arrangement and glitzy corporate alliance, from the night DJ Hollywood started talking over records at a Harlem bar in 1968 to Obama’s election. Charnas has the ideal background for the job, having been both a journalist on the pioneering hip-hop magazine The Source, and an executive at a couple of record companies. His book provides a fascinating backdrop and counterpoint to other accounts: revealing, for example, that Sean Combs was arrested in 1999 for a brutal attack on Steve Stoute. The incident casts Stoute’s warm words about Combs in his book in a rather different light.

Charnas has a good line explaining the significance of artist/entrepreneurs such as Jay-Z, where he points out that popular culture has always been created by partnerships between performers and business people, but “the source of hip-hop’s singular, spectacular rise was that hip-hop bred individuals who can be both”.


The fate of rappers who lack that commercial instinct can be seen from the career of Common, whose memoir One Day It’ll All Make Sense is a chronicle of relationships and experiences rather than licensing deals and equity investments. His career is far from a failure: he has received plenty of critical plaudits, and is still working after 20 years, releasing a new album this month. He is also a moderately successful actor, with a role in AMC’s highly regarded new Western series Hell on Wheels. But he is never going to reach the pinnacles scaled by hip-hop’s greatest stars. Jay-Z clearly regards him in the same way an investment banker might view a cousin who had gone in to the priesthood: with a mixture of admiration and condescension. “Truthfully, I wanna rhyme like Common Sense, but I did five mil, I ain’t been rhymin’ like Common since,” he raps on “Moment of Clarity”.

Common, born Lonnie Rashid Lynn, had a very different upbringing from Jay-Z, with private schooling and a stable home with his mother and stepfather. His reminiscences of his schooldays include a fibre-optics project at the state science fair, not cooking up crack and shooting his brother in the shoulder, as Jay-Z did. Sometimes his stories are hilariously lily-livered, including an anecdote about freaking out after smoking some strong marijuana and phoning his mother, who was less than sympathetic. He even allows his mother to interpolate lengthy passages into the book. Yet all these signs of weakness make him more sympathetic – you are left with a sense of Common as a more human figure than some of his more commercially successful peers.

That lack of human scale is the hip-hop tycoons’ greatest weakness. The Big Payback ends with an upbeat image of the crowds celebrating Obama’s 2008 victory on Harlem’s 125th Street, close to where hip-hop was born. Setting the scene, Charnas describes Jay-Z and Combs looking down from billboards “as modern demigods”. And demigods can lose touch with the lives of mere mortals.

Chuck D, the leader of the political rap group Public Enemy, recently chided Jay-Z and Kanye West for bragging about their wealth at a time of hardship in America. Having often come from poor backgrounds themselves, rappers tend to be, in Stoute’s words, “unapologetic capitalists”. But the depth of the economic crisis makes the stars’ endorsements of Maybach cars and $300 bottles of Armand de Brignac champagne seem particularly jarring.

That Jay-Z, who has been known to wear a Che Guevara T-shirt, is troubled by this distance can be seen in his uneasy relationship with the Occupy Wall Street protests. Rocawear, his clothing line, launched a T-shirt saying “Occupy All Streets”, which became an instant focus for attacks from the movement – it was intended to be supportive but none of the profits went to the campaign – and was swiftly pulled. In the American tradition, Jay-Z gives generously to good causes: his Carnegie Hall concerts are to raise funds to help low-income students attend college. Like his role model Warren Buffett, he also recently said he would be prepared to pay more in taxes to pay for public education and poverty reduction. But charity concerts and political statements cannot dispel the sense of distance from his audience.

Stoute writes that credibility is essential for any celebrity or brand. When it is lost, consumers’ reactions are “backlash, apathy and boredom”. Appearing at Carnegie Hall and on the university syllabus, hanging out with the possible future president of Russia, displaying the noblesse oblige of the wealthiest, Jay-Z may be in the process of losing his.

This article originally appeared in Financial Times. Click here to read more coverage from the Weekend FT.

Ed Crooks is the FT’s U.S. business and energy editor