Empire State of Mind Read online

  Table of Contents

  Title Page

  Copyright Page

  Dedication

  Introduction

  Chapter 1 - A Hard Knock Life

  Chapter 2 - The Roc-A-Fella Dynasty

  Chapter 3 - Building a Notorious Brand

  Chapter 4 - Jay-Z’s First Basketball Team

  Chapter 5 - Early Retirement

  Chapter 6 - Def Jam Takeover

  Chapter 7 - Champagne Secrets

  Chapter 8 - To Infinity—and Beyoncé

  Chapter 9 - Net Gain

  Chapter 10 - Who Killed the Jay-Z Jeep?

  Chapter 11 - Reinventing the Roc

  Chapter 12 - History and Beyond

  Acknowledgements

  NOTES

  INDEX

  PORTFOLIO / PENGUIN

  Published by the Penguin Group

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  First published in 2011 by Portfolio / Penguin,

  a member of Penguin Group (USA) Inc.

  Copyright © Zack O’Malley Greenburg, 2011 All rights reserved

  LIBRARY OF CONGRESS CATALOGING IN PUBLICATION DATA

  Greenburg, Zack O’Malley.

  Empire state of mind : how Jay-Z went from street corner to corner office / Zack O’Malley Greenburg. p. cm.

  Includes bibliographical references and index.

  eISBN : 978-1-101-47607-9

  1. Jay-Z, 1969- 2. Rap musicians—United States—Biography. I. Title.

  ML420.J29.G74 2011

  782.421649092—dc22

  [B] 2010035334

  Without limiting the rights under copyright reserved above, no part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form or by any means (electronic, mechanical, photocopying, recording or otherwise), without the prior written permission of both the copyright owner and the above publisher of this book.

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  For my parents—all three of them—and for Danielle

  Introduction

  At 12:10 a.m. on October 4, 1969, Brooklyn’s last Myrtle Avenue elevated train rumbled off into the night.1 Two months later Shawn Corey Carter—better known as Jay-Z—entered the world, making his first home in the nearby Marcy housing projects. The sprawling complex of drab six-story brick buildings today sits five blocks from the Myrtle Avenue line’s ghostly remains, a block-long hollow structure that nobody ever bothered to knock down. During Jay-Z’s formative years, the rest of Bedford-Stuyvesant was similarly neglected by the authorities; as the drug trade flourished in the 1980s, lessons of supply and demand were never farther than the nearest street corner. Even now, hallmarks of Marcy’s past remain: the padlocked metal gates guarding each parking space, the apartment numbers stenciled in white paint beneath street-facing windows to help police catch escaping perpetrators, and, of course, the rusted railway skeleton over Myrtle Avenue, just steps from the platform where the J and Z subways now roll into a modern train station.

  The following pages will explain just how Jay-Z propelled himself from the bleak streets of Brooklyn to the heights of the business world. In making that journey, he’s gone from peddling cocaine to running multimillion-dollar companies, with worldwide stops at sold-out concerts along the way. Once Jay-Z got going, it took him less than ten years to complete that voyage, thanks to innate talents honed through hustling. His story is the American dream in its purest form, a model for any entrepreneur looking to build a commercial empire.

  Jay-Z wouldn’t be where he is today were it not for his remarkable abilities as a rhymester and wordsmith. Most hip-hop buffs place him in rap’s pantheon, alongside the likes of Rakim, KRS-One, Tupac Shakur, and the Notorious B.I.G. Jay-Z’s first album, Reasonable Doubt, packs a life’s worth of lyrics into a single disc, backed by beats thick with soul and jazz. Though his first album is still considered one of hip-hop’s greatest, he garnered criticism for heading in a pop-oriented direction in subsequent efforts. Jay-Z readily admits this was all part of his plan to sell more records. “I dumbed down for my audience, doubled my dollars,” he says in one song. “They criticize me for it, yet they all yell, ‘Holla.’ ”2

  While some of Jay-Z’s catchier choruses have drawn the scorn of purists, radio hits like “Hard Knock Life (Ghetto Anthem)” were instrumental in broadening hip-hop’s appeal. Jay-Z has helped a cultural movement born amid the ashes of the South Bronx flourish in the fertile fields of the American mainstream. With his aid, hip-hop has gone all the way to the White House—Barack Obama referenced Jay-Z’s “Dirt Off Your Shoulder” at a press conference in early 2008 and reportedly called Jay-Z early in his first presidential campaign to ask “what’s going on in America.”3 Mid-career classics like The Blueprint (2001) and The Black Album (2003) earned critical acclaim, and both sold more than two million copies. The Blueprint 3 (2009) was Jay-Z’s eleventh number-one album, breaking Elvis Presley’s record for a solo act. At the time of this book’s publication, Jay-Z had sold over fifty million records worldwide.4

  This book’s focus is not music, but business, a field in which Jay-Z’s prowess rivals his considerable musical talents. He pulled in $63 million in 2010, more than twice as much as the next highest paid hip-hop impresario, Sean “Diddy” Combs.5 Jay-Z is regularly recognized by Forbes, Fortune, and others as one of the most successful moneymakers in his industry and beyond. In 2010, he earned more than all but seven CEOs in the country; executives who made less than Jay-Z include Howard Schultz, Michael Dell, and Ralph Lauren.6

  One of the main reasons for this success is Jay-Z’s ability to build and leverage his personal brand. As much as Martha Stewart or Oprah, he has turned himself into a lifestyle. You can wake up to the local radio station playing Jay-Z’s latest hit, spritz yourself with his 9IX cologne, slip on a pair of his Rocawear jeans, lace up your Reebok S. Carter sneakers, catch a Nets basketball game in the afternoon, and grab dinner at The Spotted Pig (Jay-Z owns a stake in both) before heading to an evening performance of the Jay-Z-backed Broadway musical Fela! and a nightcap at his 40/40 Club. But leave the gold jewelry at home, ditch the baggy shorts and athletic jersey, and don’t even think about drinking Cristal: pop-culture arbiter Jay-Z has pronounced all of these items verboten. Instead, consider wearing a platinum Audemars Piguet watch along with a crisp pair of jeans and a dress shirt, preferably by Rocawear, while drinking Armand de Brignac “Ace of Spades” champagne. He’ll profit at every step. As he says in one of his songs, “I’m not a businessman—I’m a business, man.”7


  Jay-Z has a nose for money. It drew him away from music and toward the drug trade as a teenager, then back to music as a young adult. In the middle of his career, it took him from the studio to the boardroom, then back to the studio. It’s led him to a little bit of both in recent years, creating marketing synergies at every turn. He has a unique ability to set trends and profit from them, and he has milked many of his ventures for astronomical profits. Jay-Z pulled in $204 million for selling his Rocawear clothing line in 2007; the following year, he secured a ten-year, $150-million deal with concert promoter Live Nation at the top of the market. By my estimate—informed by three years of evaluating the fortunes of billionaires and writing about the business of hip-hop for Forbes—Jay-Z’s personal fortune stands at nearly half a billion dollars. With a little luck, he’ll make it to ten figures before his social security checks start to arrive.

  Despite Jay-Z’s success, there are still many Americans whose impressions of him are foggy, outdated, or downright incorrect. Over the nine months I spent working on this book, I was astonished at the number of people—mostly middle-aged and white—who, with varying degrees of seriousness, advised me to watch my back while writing about a rapper. Perhaps these were simply misguided quips, though I fear that more often than not, they were symptoms of the prejudice that still infects our society. This is not a book about race, but in researching Empire State of Mind, I was reminded that Jay-Z’s rise is all the more remarkable because of the biases he’s been able to overcome.

  I’ve encountered a few people for whom Jay-Z’s name doesn’t ring a bell, especially in France and Germany, where parts of this book were reported. Every one of them, however, remembered who he was when I identified him as the husband of pop superstar Beyoncé Knowles, the subject of Chapter 8. For the most part, I’ve been amazed at the number of people with an encyclopedic knowledge of all things Jay-Z. When he declared himself the new Frank Sinatra in his 2009 hit “Empire State of Mind,” everybody wanted to weigh in on his bold thesis, from deli proprietors to music industry leaders. “Jay-Z did what most would consider improbable—create an anthem as important to New York as Frank Sinatra’s ‘New York, New York,’ ” Craig Kallman, chief executive of Atlantic Records, told me. “His version is exhilaratingly original and fresh, and captures the essence of today’s Big Apple.”8

  In November of 2009, Newsweek declared Jay-Z the fourth most important newly minted tycoon of the decade, between hedge fund king John Paulson and Facebook founder Mark Zuckerberg. The honor highlighted his prowess in business and music as well as his cultural impact. “Jay-Z helped change the face of America and its racial politics,” declared Russell Simmons, founder of Def Jam Records. “Kids in Beverly Hills now understand the plight of kids in Brooklyn housing projects. Without hip-hop there is no Barack Obama, and without Jay-Z, hip-hop wouldn’t be where it is today.”9

  Simmons is a good friend of Jay-Z, and one of many with a great deal of respect for him. I spoke with scores of people who’ve spent time with Jay-Z, and they all praise his natural brainpower, manifested as much in the shrewdness of his business dealings as in the intricacy of his rhymes. They point out his ability to size people up and rapidly gather information on any situation as it unfolds, both talents honed by years of peddling drugs while skirting rivals and authorities alike. Perhaps most of all, observers note his expansive intellectual curiosity in both music and business.

  Though Jay-Z is better known for making and spending money than for giving it away, he has some experience with the latter. He established the Shawn Carter Scholarship Foundation to help underprivileged kids attend college in 2002,10 donated $1 million to Hurricane Katrina relief in 2005,11 and joined forces with the United Nations and MTV in 2006 to launch a documentary series called The Diary of Jay-Z: Water for Life, which chronicled his journey to Africa to raise awareness about the world water crisis.12 He also teamed with a slew of celebrities to raise $57 million for Haiti earthquake aid in 2010.13

  When it comes to his own business dealings, Jay-Z isn’t quite so munificent. He has a habit of casting aside his teachers once he’s mastered their lessons; to his credit, he isn’t on the long list of entertainers who’ve been taken advantage of by opportunistic friends and family members. On the other hand, this trend has earned him the scorn of a few influential figures in his life, including Marcy mentor Jonathan “Jaz-O” Burks, childhood chum DeHaven Irby, and Roc-A-Fella Records cofounder Damon Dash. Jaz-O, who has known Jay-Z since the mid-1980s, says simply, “His loyalty is to his money.”14

  Jay-Z doesn’t like to share the proceeds of projects he feels he can execute on his own, which seems to be one of the reasons he ditched Dash around 2004. I believe it’s also the main reason he did not consent to be interviewed for this book. It’s an attitude well known by members of his inner sanctum, particularly his shrewd right-hand man John Meneilly, the former accountant who was promoted when Jay-Z and Dash parted ways. (Though Meneilly is essentially a manager, Jay-Z refers to him as a consigliere15—nobody manages Jay-Z.)

  I arranged an appointment with Meneilly to discuss my book in October of 2009, naively assuming he and Jay-Z would be on board. Upon arriving at Rocawear’s headquarters, I was ushered into a high-floor conference room. In front of a window that revealed a cloudy sunset over lower Manhattan stood Meneilly, on the phone with somebody responsible for the logistics of an upcoming concert. What was so difficult, he asked, about setting up a giant video screen above the stage to display a ten-minute countdown sequence right before the start of Jay-Z’s show? Eventually the person on the other end relented, and I introduced myself. As soon as the pleasantries were completed, Meneilly got right to his main point: “What’s in it for us?” That question basically set the tone for the rest of the meeting. If Jay-Z wasn’t going to benefit financially, he wasn’t interested in having a business book written about him by anybody—even somebody whose Forbes articles he’d referenced in at least three different songs (including the 2007 track entitled “I Get Money: The Forbes 1-2-3 Remix,” featuring 50 Cent and Diddy).

  After spending the better part of a year researching Jay-Z and familiarizing myself with his tendencies, I can’t say I’m surprised he decided not to cooperate. It’s all part of the same attitude that helped him build his business empire. I’m sure he figured it wasn’t worth granting numerous interviews when he could instead spend time on a book that he’d profit from directly. Sure enough, after my meeting with Meneilly, Jay-Z repurposed the memoir he’d scuttled in 200316 and released his book, Decoded, before this one went to press.

  In the absence of one-on-one time with Jay-Z, I’ve stacked this book with quotes and anecdotes gleaned from my interviews with more than seventy-five people—some on the record, some on background—who’ve either done business with Jay-Z or are intimately familiar with his life. I’ve included Jay-Z’s own words in the form of published quotes, song lyrics, and stories I gathered from his associates. Some of the people I’ve interviewed asked me not to include their names in print. Others asked me to remove their contributions from the book altogether after it became clear that Jay-Z wasn’t on board with the project. I obliged, even in the case of one particularly well-known producer who received an e-mail from Jay-Z on his BlackBerry in the midst of our interview and showed it to me (the sender was listed in his virtual address book as “Hova”).

  The coming pages include insights from artists, executives, and acquaintances including the aforementioned DeHaven Irby, Damon Dash, and Jaz-O, and others who’ve spent considerable time with Jay-Z: DJ Clark Kent, the man who convinced him to stop selling crack and start selling records; Craig Kallman, the CEO of Atlantic Records, which distributed The Blueprint 3; Jamal Crawford, the NBA star who played on Jay-Z’s first basketball team; Questlove, drummer of the Roots; and Fred “Fab 5 Freddy” Brathwaite, one of hip-hop’s most celebrated trailblazers.

  Aided by original testimony of these sources and others, along with support from hundreds of television clips a
nd news articles, this book aims to answer a simple question: how did Jay-Z rise from Brooklyn’s impoverished housing projects to a position as one of America’s most successful businessmen? The answer should be of interest to anybody interested in music, sports, or business—and to any entrepreneur in search of a blueprint for building something spectacular from the humblest of beginnings. For that sort of journey, there’s no better attitude than Jay-Z’s empire state of mind.

  1

  A Hard Knock Life

  It’s half past noon, and I’m stuck in a stalled subway just shy of the Flatbush Avenue terminus in Brooklyn, already late to see the man who discovered Jay-Z. I’ve never met Rodolfo Franklin, better known as DJ Clark Kent; the pictures I’ve seen of him are from the mid-1990s. What if I don’t recognize him? What if he waited for fifteen minutes and left?

  When the train finally groans up to the platform, I race out the door, up the stairs, and across the street to Applebee’s. A burly man in a black sweat suit is thumbing his BlackBerry on a bench. I glance from his red-and-black Nikes to his matching baseball cap, brim slung low to the left. It’s Clark Kent.

  “Clark,” I begin. “I’m so sorry I’m late. I was. . . the train was—”

  “Don’t sweat it,” he says.

  “It just stopped and—”

  “Hey, relax.” He smiles. The waiter seats us at a table by the window and asks if we’d like to order drinks. Clark Kent orders the Red Apple margarita. “I’m going to need this,” he mutters.

  I order a plain margarita.

  “Strawberry, mango, raspberry, kiwi, or original flavor?”

  “Original flavor.” The waiter disappears.