Did Dr. Dre’s boastfulness cost him hundreds of millions in Apple-Beats deal?


CoM - Beats

After Beats co-founder Dr. Dre made an exuberant video post on Vine boasting about becoming the first rap billionaire, many worried that Apple’s deal with the audio and streaming music service — once rumored to be worth as much as $3.2 billion — was scuttled. But a new report suggests it’s still on track for being announced this week, although Dre’s boastfulness may have cost him two hundred million dollars.

Citing unnamed sources party to the ongoing discussions between Cupertino and Beats, The New York Post says that Apple has lowered its offer for Beats to just $3 billion, citing “due diligence” as a key factor.

“Apple hadn’t even begun its due diligence process when news of the number came out,” a source said. Although the Beats deal looks good to Apple — Beats earned $1.3 billion in sales in 2013 alone — it doesn’t look $3.2 billion good, apparently.

Although rumors have suggested that Apple’s primary interest in Beats wasn’t their audio technology, but the company’s streaming music service, The New York Post’s source says that isn’t the case. “Apple doesn’t have a streaming music business so it would be a nice instant get, but the hardware is the profitable business,” they said.

The New York Post also suggests that the real reason that Apple is buying beats isn’t, as previously rumored, to make an acqui-hire of Beats co-founders Dr. Dre or Jimmy Iovine, whose connections in the music industry are famous. Rather, Apple’s major interest is the Beats brand itself: it’s a billion dollar hardware business with major fashion appeal, exactly the kind of business Apple tries to create for itself.

If the deal goes through, Iovine and Dre are expected to be at Apple’s Worldwide Developer’s Conference on June 2 significantly richer: Dre will earn $750 million on the deal, pre-tax, while Iovine is expected to earn hundreds of millions himself.

Source: New York Post

  • Adrayven

    What I find funny.. is were ‘following’ this deal step-by-step through negotiations.. Doesn’t that sound.. odd… like they wouldn’t be keeping this silent?

    Apple is skittish as it is about leaks.. I think Beats (Dr Dre) is just milking the rumor for all it’s worth.. and there is nothing real to it.. These ‘sources’ smell fishy… I mean.. hell, Beats is getting great media attention out of this.. regardless of truth..

    anyone? Bueller? Bueller? Bueller?

  • GadgetCanada1

    I would love for Dre to walk on stage at WWDC and the crowd goes completely and awkwardly silent. No clapping, not a single sound.

    • Marcus Winchester

      Laugh if they boo him off the stage and Phil Schiller says “Apple buying Beats audio my ass”

      • Anthony

        What’s funny is now that its official, both Dr. Dre and Jimmy Iovine have hundreds of millions more reasons not to give a crap about what people in online forums think of them.

  • Charismatron

    It’s a great story: surprise bids, bad moves, money (lots of money!), fame, intrigue–and of course the potential future of Apple and the music business. Fine fodder for the crowds!

  • williambaranowski

    Apple Beat Down.

  • When it’s $3 billion then $200 miliion is an irrelevance to the man.

  • “The New York Post’s source says that isn’t the case. “Apple doesn’t have a streaming music business so it would be a nice instant get…” Yeah, just ignore iTunes Radio to make your point.