Money Used To Talk, Now It Raps
Quality Control, Dr. Dre and Drake want the bag but at what cost?
Welcome to the 42nd issue of Backseat Freestyle. This is my weekly hip-hop newsletter I send out every Friday (I know, almost a week late) focusing on one big thing that happened over the past seven days. I also include links (15-25 of them) to what I’ve been listening to, reading and watching. You can check out the archive, here, and read more about me, here. If you’re already a BF subscriber, thank you for your continued support. If you’re arriving to this issue by way of a forward, LinkedIn or social media, please subscribe below. And please share this newsletter with your circle so that they can enjoy it, too; personal referrals are my best path to long-term growth. With that said, let’s get into it….
This is what’s driving hip-hop this week….
I LIKE WHEN HIP-HOP gets paid. And paid well. It's like when Jay-Z rapped about overcharging for what they did to the Cold Crush. There's real (global) value in our culture. And while I'm no advocate for trickle down economics, I do believe a rising tide lifts all boats. But lately, there's been something bothering me. You see, the past few years there's been a lot of headlines made for catalog sales of rock giants like Bob Dylan, Bruce Springsteen and Sting. Now rappers are starting to participate in that windfall. Lil Wayne, Future, Juice WRLD and Dr. Dre have all sold their music to investment groups. And while Quality Control's recent sale isn't the same type of deal, the adage is likely the same: you don't get money for nothing. So for all these cash cows that are cashing out, it might not be as simple as that other line Hov rapped.
Respect my mind or die from lead shower.
I HEARD QUALITY CONTROL was rumored to be in play on the sales tip, but I assumed once the rumblings of Warner Music Group’s interest faded then the company would be sold to UMG, where they already have a distribution deal in place via Motown Records. Similar to 300 Entertainment and its distro deal with Atlantic and its sale right back to its partner’s parent company, WMG. However, I was stunned when Scooter Braun and HYBE announced a reported $320 million acquisition of QC by way of cash and stock. That's a big time move.
Here’s why. Scooter’s businesses, Ithaca Holdings and SB Projects, have been anything but traditional. While he’s best known for his management clients, particularly Justin Bieber and Ariana Grande, Scooter’s empire expanded into publishing, a label, investments, film and television, etc. The result was its $1 billion merger in 2021 with HYBE (a K-pop powerhouse that’s home to BTS).
QC’s P and Coach K also haven’t been shy about their ambitions. They’ve gotten into management and have a budding portfolio that includes property, film/TV, sports and so on. With their new found capital and the structure of the deal (stock options, specifically), you can expect the founders to stick around for a long time. You can also expect the company to change. A lot.
The more value you create for the parent company via your company, the more value both gain—[the new deal gives] more skin in the game for the QC founders.
First, the stock options. Like most deals that involve stock, there’s a time period before the options can vest (and it’s real money vs. merely valuation money). Part of that is designed to keep the leadership in place that created the value in the company in the first place.
However, HYBE isn’t shelling out money for nothing.
The stock option is also to create a reciprocity: the more value you create for the parent company via your company (with added backing), the more value we both gain. It’s more skin in the game than what the QC founders had in their relationship with Universal Music Group.
HYBE wants to make new money with QC. That means more than just singing new artists to justify the costs. Take a look at how Ithaca/SB, which merged into HYBE USA, and now the combined company is expanding their pop and K-pop bases to include hip-hop.
How could QC change?
Let’s look at Dr. Dre’s recent sale of his catalog, as an example. Dre isn’t making much music these days, so his scenario may be simpler to think about. His new partners are looking to make new money in one way: from his past work, as opposed to HYBE and QC, which will be looking to make money out of their past, present and future work.
To catch you up to speed: Dr. Dre sold his music back to UMG in partnership with Shamrock Holdings, an investor fund, which in name makes them less cowboy than a private equity firm but the goal is largely the same. The deal is two separate transactions, which see UMG acquiring 10-15 percent of Dre’s “artist royalties from two of his solo albums and his share of N.W.A. artist royalties; his producer royalties; and the writer’s share of his song catalog where he doesn’t own publishing.” Shamrock is acquiring 75-90 percent.
If no one is gonna be precious about things, Drake figures why shouldn’t he get in on the act.
Shamrock acquired Taylor Swift’s catalog from Scooter after Braun acquired Big Machine Group, the label that the country pop star was signed as an artist. According to Music Business Worldwide editor and analyst, Tim Ingham, Shamrock’s strategy for Swift’s catalog will likely include music syncs, merch deals (using album artwork as a starter), and multiples (possibly reselling their asset).
There’s a scenario where we could see an NWA cartoon, a Dr. Dre Broadway play or a traveling art show featuring his album covers. (or Chronic iced tea! Holler if you remember that one.) Any way that Shamrock can think to turn their $200 million investment into double or triple that amount, they’ll spare no undignified opportunity. They won’t be precious about Dre’s work.
There could be an accelerated strategy that will be in play for QC, tool. Think of a Lil Baby cartoon. Or a City Girls song in every Amazon Prime series. Or clothing line equivalent of Skechers teaming with Yachty (likely in Asia).
And if no one is gonna be precious about things, Drake figures why shouldn’t he get in on the act. He proposed a bonus payment should be sent his way for recently breaking a Spotify record (the first artist to have 75 billion streams on the platform). It’s an interesting idea. HIs achievement surely bends the algorithms in new ways that induce more consumption that creates a windfall of revenue that’s shared between Republic Records, Universal and Spotify. Why should Drizzy wait to sell his catalog to get paid?
Better now and on his own terms. Because when outside equity or investment attempts to scale an industry, the possibilities seem endless in the press releases yet instead end up like Party City, AMC Theaters and a growing number of companies that either go bankrupt or unconscionably raise prices.
Here’s to hoping our guys can control the quality.
Music, news, reads, podcasts and videos that I’m checking for this week.
Babyface Ray is getting closer and closer. He has the consistency, and the voice and talent are there. He’s really a defining single away from stardom; “Ron Artest''—featuring 42 Dugg—isn’t that one but it’s a great listen nonetheless. [Listen]
Texas upstart BigXthaPlug releases Amar, a promising set that finds him using his husky voice to detail his life in the Lone Star State. [Listen]
On Back On Dexter’s second track, “Add It Up,” DJ Drama admits with regret the lack of Gangsta Grillz projects he’s done with women. Kash Doll remedies things with quickness, however. Her excellent project finds the Detroit native breathing fire into cuts like “Add It Up,” “Heavy” and “RNQ.” [Listen]
I noticed two years ago a number of rappers trying to tickle the streaming algorithm ahead of Valentine's Day with some “us forever” type of records. I thought Lil Mosey had the best one then with his “Enough,” but it turns out it was LIl TJay who became a star on the back of “Calling My Phone.” Well, this year, Central Cee (“Me and You”), Maino (“Best For Me” featuring Fabolous) and K Camp (“Pretty Ones” featuring B Lovee) are just a few trying to woo hearts through ears. [Listen] [Listen] [Watch]
TDE’s post Kendrick Lamar life begins its second phase (after SZA and Ab-Soul’s albums, respectively) with the release of Lance Skiiiwalker’s Audiodidactic; the collection is a breezy, vibe-heavy set that’s made for a late night drive home. “It Was All” and “Everybody Hurts Somebody” are early standouts. [Listen] Related: TDE’s Zacari and Ab-Soul team up for “Motions.” [Listen]
Shy Glizzy returns with Flowers, a long-awaited release and a long set at 20 tracks, but bolstered by “The Real Is Back” and “Slime U Out” featuring 21 Savage. [Listen]
DJ Khaled returns to UMG after a six-album run at Sony Music, which saw five of the releases come via Epic Records. The We The Best star will release music on Def Jam and serve as a consultant across the wider Universal spectrum. [Info]
Spotify’s influential RapCaviar playlist continues to expand its universe (in addition to IRL events and a podcast) with a new docuseries premiering next month on Hulu. [Info]
Every rapper who won at the 2023 Grammy Awards. [Info]
Congrats: Caroline “Baroline” Diaz inks a deal with Alamo Records’ Santa Anna services company to launch Great Day Records. [Info]
Want to know how Questlove pulled off that Grammy rap tribute? He breaks it all down, including all the challenges. [Read] Related: Vibe has been re-ranking their top 50 rappers of all-time and released the top 10. [Info]
It’s been 20 years since the debut of 50 Cent’s Get Rich or Die Tryin’ and to celebrate Curtis spoke to Billboard’s Carl Lamare for a deep Q&A about returning to his music roots (with Dr. Dre and Nas) and expanding his TV empire. [Read] Related: The Hard 2 Earn podcast revisited GRODT to kick off their third season. [Listen] Also, related: Carl had another great Q&A with Coi Leray that goes into the mechanics behind her record making. [Read]
Elliott Wilson speaks to Jay-Z about his Grammy performance, rap’s relationship with the Recording Academy and more. [Read]
One of the better profiles I’ve read in a while with Billboard cover star NBA YoungBoy, which finds the Baton Rouge star relocated to Utah and newly married as he talks about his past, his new deal with Motown and what motivates him. [Read]
GloRilla covers The Cut’s spring fashion issue, complete with a beautiful photoshoot and the classic origins story. [Read] Related: Big Glo breaks down the haters on “Internet Trolls.” [Watch]
From OKP: De La Soul on How J Dilla Invented The Modern Beat tape. [Read]
I think Symba is a really good communicator; I was able to be a part of something with him recently and I was so impressed with how clearly he can get his feelings across. That thing will drop soon, but in the meantime the Bay Area rapper caught up with GQ for a Q&A. [Read] Related: Symba dropped the visual for his Roddy Ricch collab, “Never Change.” Watch
It has to be incredibly difficult to navigate life post hospitalization after getting shot (especially when people expect the 50 Cent blueprint), but Lil TJay seems to take a thoughtful approach to it while realizing he’s a “miracle kid” for surviving. [Read]
Former Def Jam head, Noontime founder and current CIO at Quality Control, Chris Hicks, doesn’t speak often so when he does, pay attention. Here, he sits down with a new pod, Culture Raises US. [Listen]
Women collaborating with women >>>. They have fun and make fire, especially at the expense of fuccboi’s. PinkPantheress and Ice Spice team up for “Boy’s a liar Pt. 2” and it’s a two minute dash of anxiety, regret and middle fingers. [Watch]
Those social media clips you saw of Bad Bunny on top of a gas station in Puerto Rico? That was filming for Arcangel’s “La Jumpa” video. A movie, for real. [Watch]
If there’s one thing Meek Mill is gonna do, that’s spit. His “Don’t Follow The Heathens Freestyle” is chock full of punchlines. But it’s the bite behind his delivery that’s as ferocious as it was when he was just a punchy battle rapper in Philly with loose braids. [Watch]
For Vevo’s nod to hip-hop 50 the company is having rappers revisit classic material; here, Common looks back on “The Light,” as a part of Vevo’s Footnotes series, which Joseph Patel and I developed when we were there. (Not sure why the credits list other folks as having developed the format, but funny things happen when folks leave the house, I suppose.) [Watch]
Social media influencer Ari Fletcher taps her boo, Moneybagg Yo, for a Valentine’s Day edition of her YouTube series, Dinner With The Don; it’s a fun look at Bagg and parts of his personality he usually keeps low. [Watch]
Backseat Freestyle is written and produced by me, Jayson Rodriguez, for Smarty Art. If you have any comments, feedback or questions, feel free to email me: [email protected] If you would like to discuss sponsoring an issue of the newsletter, contact: [email protected] smartyartllc.com and check out the rates, here. And follow me elsewhere:
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