Hip-Hop Moguls: Beyond The Hype - management behind rap music

Black Enterprise, Dec, 1999 by Tariq K. Muhammad

Over the past two years, Master P, along with fellow hard-core acts Snoop Dogg, Mia X, Mystikal, Silkk the Shocker and C-Murder, have pushed No Limit's sales to over 28 million records, with gross receipts of nearly $250 million. No Limit's heralded cross-marketing strategies, in which each release is used to promote other No Limit artists and products, keep expenses low and profit margins high. "A lot of companies are trying to figure out how we keep our costs down," says No Limit Records COO Tevester Scott. "We just learned the game quickly and understand where to put our money."

Rather than pay top dollar for sought after hip-hop producers who charge as much as $20,000 per track No Limit uses mostly in-house producers and records in its own studios. As for big-budget videos, "save that for Britney Spears and the Backstreet Boys," laughs Scott, who runs the record company's day-to-day operations. Such frugality has afforded Miller the capital to pursue other ventures. "I let this rap thing open up other avenues because you can't just depend on the music business," says Miller through a top row of gleaming gold teeth, each set with a diamond big enough for any would-be bride to covet.

The No Limit empire now spans music, film, clothing, sports management, real estate and toy merchandising (Master P dolls and No Limit bicycles). Combined revenues of No Limit Records and No Limit Film for 1998 are estimated at over $160 million. No Limit Gear--for which Miller purchased Los Angeles-based clothing manufacturer Nexis rather than rely on licensing--is expected to bring in $10 million this year. Each company is a separate entity, with Miller serving as CEO and owner. His real estate concern, New Orleans-based PM Properties, owns over 100 properties across the U.S., including the homes of several No Limit rappers and executives.

Ironically, Miller has divested himself of ownership of No Limit Sports, the most embattled of his ventures, due to his desire to play in the NBA. Players aren't permitted to own sports agencies and, at press time, Miller was in training camp with the Toronto Raptors. No Limit Sports, which represents nearly two dozen pro football and basketball players, came under intense scrutiny for its negotiation of 1999 Heisman Trophy-winning running back Ricky Williams' contract. The contract, worth between $11 million and $68 million, stipulates that Williams perform at an All-Pro level to reach the top salary. Such incentives are not new to football. However, they are typically reserved for players without the bargaining leverage of a Heisman Trophy. So far, the deal has not panned out for Williams. The running back has been hampered by injuries in the first quarter of the season.

"As an agency, their work will be judged by how effectively they negotiate contracts over the long run, not by a single contract," says sports agent Bill Strickland of Washington, D.C.-based Stickland and Ash. However, others in the industry believe that No Limit Sports can't afford many more questionable contracts for high-profile players. The Williams contract negotiations underscore the need for Miller to identify seasoned and talented executives to run his various enterprises. "I'm just trying to build a great team," says Miller.