Hip-hoppreneurs - hip hop artists are parlaying success in the music world into other venues - The Business of Entertainment

Black Enterprise, Dec, 1997 by Eric L. Smith

IT'S THE TWILIGHT OF SUMMER IN LOS ANGELES AND RUSSELL Simmons is in cruise control. Motoring down Wilshire Boulevard in a coal black convertible Benz, the 40-year-old CEO of Rush Communications lets it casually slip that he just recently learned to drive. But that doesn't discourage him from furiously working the car cell phone with one hand while gingerly grasping the steering wheel in the other.

Simmons is coordinating last-minute celebrity contributions to his annual Rush Philanthropic Arts Foundation celebrity auction, which focuses primarily on the needs of inner city youth. So far, the donated items include an auto-graphed poster and watch from the Will Smith movie Men in Black, a pair of size 22 Reeboks signed by Shaquille O'Neal, and an autographed copy of the Sidney Poitier film To Sir with Love. Now Simmons is after his next target.

"I need Maria's number," Simmons barks into the phone. "Not the office--the number at home. Did we get anything back from her or Arnold for the auction? The least we should be able to get is a signed Terminator poster." These days, the BE 100s CEO can not only make such demands on Hollywood's elite but also expect a prompt response. (Schwarzenegger ultimately donates a leather Planet Hollywood jacket autographed by himself and wife Maria Shriver.) If nothing else, it is a testament to the prestige Simmons wields among Hollywood's upper echelon.

If Simmons is considered influential by those within the urban music industry, it's not only because of these accomplishments; it is also because he is the forerunner of the "Hip-Hopprenuer." Many in the industry credit Simmons for setting the standard for rap artists and executives who've risen through the urban music ranks to realize that the key to sustained success and wealth doesn't end after making a few hit singles. Far from your stereotypical Brooks Brothers-wearing corporate executives, a swelling group of artists, including such top selling acts as The Wu-Tang Clan and Spindarella of Salt N' Pepa, are leveraging their celebrity in the music industry to spin into different business enterprises. Their concerns run the gamut from down-low street fashion to high-comfort spas. These Gen Xers have propelled themselves onto a different stage by realizing that name branding and business ownership is the real secret to success.

Although a corporate executive and not an artist, Simmons is the perennial example of a true player in the hip-hop industry. Since founding Def Jam Recordings in 1985--the largest subsidiary of Rush Communications--Simmons has methodically spread his reach from hip-hop across the entertainment arena into fashion, film and advertising. In 1997, Phat Farm--Rush Communications' wholesale and retail clothing company--is projected to gross sales of $10 million. With the success of films like the late Tupac Shakur's Gridlock'd and Def Jam s How To Be a Player (starring Bill Bellamy), Def Pictures will tout gross box office sales of over $25 million this year. And, with prized accounts from Coca-Cola and other clients, newly formed Rush Media projects gross billings of over $1 million in this, its first full year.

Second only to BET Holdings Inc., Rush Communications (No. 54 on the BE INDUSTRIAL/SERVICE 100 list) is now the second largest black-owned entertainment company in the United States. But there's a host of young, hungry hip-hoppers eager to follow in Simmons' entrepreneurial tracks. Whether they succeed will not depend on how well they rap or rhyme, but how well they manage the bottom line.

WU-TANG TREKS THE ENTREPRENEURIAL PATH

The midtown Manhattan office of Razor Sharp Records is used to a frenetic pace. It's where the Wu-Tang Clan work. Earlier this year, the multi-platinum-selling act released their sophomore album, Wu-Tang Forever. Despite weak radio airplay, album sales had topped $4 million by late September.

This particular evening the group will introduce several acts at Radio City Music Hall for the MTV Music Awards. Various members of the nine-member Clan are rushing in and out of Razor Sharp getting their artist credentials for the evening and going over last-minute routines. In the midst of the confusion, Clan member Lamont Hawkins, a.k.a. U-God, says while Wu-Tang may be the flavor of the moment among rap music fans, each member is very aware of the need to think beyond the moment.

"Everyone here is concerned with getting into something more than rhyming because we realize that what we have here is a vehicle that gets you from one step to the next," says Hawkins. "This is a business where one day you might be in and the next day you're out. So it's up to you to take it to the next level."

The first sign that Wu-Tang wasn't your run-of-the-mill rap group came in the innovative way the Clan structured its individual projects on separate music labels. Spearheaded by group member Robert Diggs/RZA, most members have distinct solo deals including Clifford Smith/Method Man (Def Jam), Russell Jones/Ol' Dirty Bastard (Elektra), Corey Woods/Raekwon (Loud Records), Gary Grice/GZA (Geffen) and Dennis Coles/Ghostface Killah (Razor Sharp/ Epic). Each has a 50% partnership deal with Wu-Tang Productions, and a solo deal also contributes 20% of their earnings to Wu-Tang Productions. Their arrangement is a feat nearly unprecedented because it gives the group ties to nearly every major label in the music industry.