Friday, May 9, 2014

Dr. Dre To Become The First Rap Billionaire With An Apple Beats Acquisition Of $3.2Billion

It was only a couple of weeks ago that Forbes released the 2014 edition of its annual list of hip-hop’s wealthiest artists, and this year’s list came with new bit of intrigue in the introduction: somebody atop the list, the authors wrote, will soon become the first hip-hop billionaire.
See Forbes hip hop wealthiest 2014 

For all the mentions of the word “billionaire” in rap songs (the search results at RapGenius appear to scroll endlessly into the horizon), there were really only a few candidates to get to 10 figures first: Sean “Diddy” Combs, Dr. Dre, and Jay Z. Each turned a way with words and a talent for producing music into sprawling empires including record labels, fashion brands and endorsement deals, and Diddy was ranked number one on the list, with a fortune estimated at $700 million.

Dr. Dre overtook Jay Z to claim second place in the list, propelled by his stake in Beats Electronics, the headphone maker that is in talks to be bought by Apple for a price tag north of $3 billion. Beats is a closely held company that does not disclose financial or ownership information, so establishing a value for Dre’s stake in the company involves a healthy degree of guesswork
But here’s what has been previously reported: When the Carlyle Group invested $500 million for a minority stake in Beats, it gave the company a valuation of over $1 billion. At the time, Beats was majority owned by its founders, Dr. Dre and music mogul Jimmy Iovine.

If the Forbes estimates are correct, Dr. Dre needs about 450 million more dollars to become hip-hop’s first billionaire — equal to a 15% stake in a $3 billion company. Neither Beats nor AppleAAPL -0.18% is talking about the reported deal yet, so these are early days, and we may never know the exact ownership picture at the headphone maker. But in the rap race to ten figures, Dr. Dre is now likely to be in first place.

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