In 2014, Apple obtained the rights to Beats Music and Beats Electronics, founded by Hip-Hop royalty Dr. Dre. His excitement about the news, however, allegedly led to changes in the deal.
Eager to celebrate his wins, the former N.W.A member created a video where he dubbed himself “the first billionaire in Hip-Hop.” Now, alleged details have surfaced claiming that the celebratory statement cost the mogul $200 million out of the deal.
In a new book “After Steve: How Apple Became a Trillion-Dollar Company and Lost Its Soul,” Tripp Mickle shares his account of Apple Music’s rise and it appears that the Beats Music deal is where it all began.
According to the text, Apple CEO Tim Cook allegedly wanted to use the Beats method to find “a solution to the company’s failure to enter the streaming music business.”
Instead, the deal may have led to a bit of chaos. After it was revealed that there was some reported “internal resistance,” Apple negotiated with the co-founder of Interscope Records, Jimmy Iovine to come to a price point that worked for both.
“It was a sum that Iovine and Dre could barely fathom. As the lawyers worked through final details, Iovine summoned the leadership team of Beats to his home near Beverly Hills,” the book claims, according to iMore. “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.”
And, if we consider the viral clip that included Dre’s announcement, the deal may have been spoiled.
As a result, Iovine allegedly worried that “everything was in jeopardy” in terms of the deal. On the other side, Cook reportedly remained calm about the situation.
“When word of the video reached Cook, he summoned Iovine and Dre to Cupertino. He invited them into a conference room for a private conversation. Iovine was anxious and afraid that Cook was going to kill the deal,” read an excerpt from Mickle’s book. “Instead of the anger and cursing that would have poured out of Jobs in a moment like that, Cook exuded calm. 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.”
Instead, Cook may have managed to use the moment solidified into social media history to renegotiate the initial deal, allegedly shaving off $200 million from the original plan.
On May 27, 2014, The New York Post “learned” that Apple was “expected to announce its acquisition of Beats Electronics this week — at the slightly reduced price of $3 billion.”
Before that, Financial Times reported that the reduced price of the deal agreement sat at $3.2 billion.
Watch the clip that sparked it all below.