The back story of how Dr. Dre and Jimmy Iovine sold Beats to Apple back in 2014 is fascinating, and a lot of it comes to life in the new book by Tripp Mickle called “After Steve: How Apple Became a Trillion-Dollar Company and Lost Its Soul.”
It turns out Apple CEO Tim Cook fell in love with Beats and wanted to acquire them for Apple, primarily to solve the problems they were having entering the music streaming game.
Legendary music executive Jimmy Iovine was Dr. Dre’s partner, and he is an innovative, seasoned, and tough businessman and negotiator, and after much work, a deal was struck for Apple to purchase both Beats Music and Beats Electronics.
Once the key players agreed on the deal, they concluded the only thing that could get in the way of blowing it up would be if word of the agreement leaked publicly. Iovine was so insistent on the parties being quiet that, according to the book, he quoted lines from Goodfellas where he tells Dre, “Don’t buy any furs. Don’t buy any cars. Don’t get showy.”
Around 2 a.m. the next morning, Iovine talked with Puff Daddy on a call, and Iovine was told that a video was posted on Facebook that featured Dr. Dre and Tyrese celebrating the deal with Apple.
In that video, Dre said Forbes would have to update their billionaire list because Dre was about to enter it as the only hip hop star.
Iovine panicked, freaking out, thinking the deal was dead. Dr. Dre felt guilty, worried he may have blown the whole thing up. But Cook remained calm, despite being perturbed. He told Iovine and Dre to immediately fly to Apple headquarters, where they discussed the situation privately in a conference room.
Mickle’s book said if Jobs were still CEO, he would have gone nuts and cursed out the duo from Los Angeles, but Cook still felt acquiring Beats was the right move for Apple, so he played it cool.
While the deal did go through, Cook made Dr. Dre pay a price, demanding the terms be adjusted, and $200 million was shaved off the final sale price. In other words, it was just enough to make sure that Dre would not enter billionaire status as he wanted.