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Tripp Mickle’s new book (via iMore) explores how an untimely celebration reduced the payout to Dr. Dre and Beats staff in the $3 billion acquisition in 2014.
After some tough convincing work, Jimmy Iovine, a Beats executive and longtime friend of the artist and entrepreneur Dr. Dre, managed to get Apple CEO Tim Cook on board with buying Beats Music and Beats Electronics.
Despite resistance from Apple’s internal staff, the company agreed to a price that was initially well north of $3 billion.
Iovine told his team at Beats to maintain absolute radio silence over the deal to avoid the possibility of Apple pulling out.
The following day, Iovine received a call from fellow artist Puff Daddy alerting him of a video posted to fellow musician Tyrese Gibson’s Facebook. The video showed Dr. Dre prematurely celebrating the deal, calling himself the “first billionaire in hip hop.”
When news of the video reached Cook, both Iovine and Dr. Dre were summoned to Apple headquarters. Cook was reportedly disappointed but remained calm and reassured the pair that the resolve for Apple to acquire Beats did not change.
Mickle notes that if it were Steve Jobs at the helm, it’s unlikely that he would have handled the situation nearly as well.
However, Cook used the leak as leverage to shave $200 million off of the acquisition price. This had the effect of leaving Dr. Dre shy of the $1 billion in net worth after the deal was complete.