Just as he’s about to elaborate on his point, Serch is interrupted by the blare of a cell phone (the ringtone, fittingly, is Jay-Z’s “Empire State of Mind”). He quickly turns off the phone and apologizes. When I press him for more details about the Jay-Z vehicle, he tells me that it was going to be a “Jay-Z Jeep” painted “Jay-Z Blue.” Then he starts to say something else, but stops short, explaining that he can’t tell me exactly what happened to this vehicle. “That’s really a Marques McCammon question,” he says. “I haven’t spoken to Marques in a long time.”
Serch sighs.
“That Jay-Z vehicle, I never raised my voice to more people in my life,” he says. “I lost my mind, and I severed ties, all my ties, with the automobile business.”1
Jay-Z’s ability to make money by attaching his name to products is one of his greatest strengths as a businessman, and it’s especially important given the ever-declining numbers in the record industry. Jay-Z grossed $63 million in the twelve months before this book went to press,2 and only about onefifth of that came from album sales. Over the past few years, Jay-Z has shilled for Reebok, Hewlett-Packard, and Budweiser, to name a few. In the wake of my chat with Serch, it was clear that Jeep and its corporate parent, Chrysler, were slated to join that list until something went wrong.
Finding out what happened to the Jay-Z Jeep starts with Jay-Z Blue, an actual color dreamed up by Jay-Z and Steve Stoute, hip-hop’s premier marketing man. Stoute began to replace Damon Dash as Jay-Z’s primary business partner in 2001, after convincing Jay-Z to drop a line about Motorola in one of his songs. (The company did not return multiple phone and e-mail messages asking if Jay-Z was compensated for his services.)3
Regardless of whether Motorola paid Jay-Z, the shout-out signaled an awareness of the value of Jay-Z’s brand and served as an early example of the many business collaborations between Stoute and the rapper. “We’re pretty much joined at the hip,” said Jay-Z of Stoute in 2005.4 That same year, Stoute approached industrial designer Adrian Van Anz with the idea of creating a special shade of blue to trademark as Jay-Z’s own. Van Anz, creator of the vodka-cooled computer and jewel-encrusted iPod, happily obliged by creating a reflective, silvery medium-blue color called Jay-Z Blue.5 The unusual blend even contained a dash of platinum dust. “Gave it a little bit of my personality,” Jay-Z joked. “I’m known for platinum.”6
Meanwhile, Stoute was elated. “We invented a color!” he gushed to the New York Times. “There are no limits. There is no such thing as too far.”7 Resonant with Jay-Z’s Blueprint album and its sequels, the color could be splashed onto just about any product to create a Jay-Z edition. “Jay-Z Blue is a license for corporations to get Jay-Z in the building,” Stoute explained in 2005. “Cars, laptops, lots of different things. I got deals lined up like you don’t understand.”8
The car in question was likely the sport-utility vehicle that never saw the light of day. But after a few calls to the usual industry sources, it seemed that Serch was the only person willing to even mention the Jay-Z Jeep. Steve Stoute’s office never returned my messages; same for calls to Marques McCammon, who’d left Detroit for Aptera Motors, maker of bird-shaped plug-in electric vehicles. It was becoming clear that those who knew what happened to Jay-Z’s eponymous automobile were not interested in sharing the story. One last hope remained: old-fashioned journalistic persistence.
Two months after my initial conversation with Serch, I find myself in a rental car on a freeway somewhere between Los Angeles and San Diego, on my way to pay a surprise visit to Marques McCammon. It occurs to me that dropping by unannounced to interview someone who may well be ignoring my calls isn’t the wisest idea. Worse, I haven’t developed a plan to thwart a security guard, or even a prickly receptionist. But Serch’s words—“That’s really a Marques McCammon question”—still echo in my head.
Upon arrival, the picture gets a bit rosier. Aptera Motors, it turns out, is housed in the first floor of an unassuming office park. The front door is locked, but a bearded man in jeans and a sweater lets me in and leads me to the front desk.
“I’m here to see Marques McCammon,” I say brightly.
“Oh, he’ll be back any minute,” the receptionist responds.
“Great.”
“Is he expecting you?”
“Well, no.”
The receptionist pauses, raising her eyebrows slightly. I’ve blown it.
“No problem,” she blurts. “Can I get you a glass of water?”
She leads me to a small conference room filled with chairs and tables that look like they’re from IKEA. Five minutes later, a stocky black man who seems to be in his late thirties ambles in and introduces himself. It’s Marques McCammon.
I explain that I’m writing a book on Jay-Z and that Serch said Marques was the man to talk to about the elusive Jay-Z Jeep. Much to my surprise, he nods and starts talking.
“The skinny,” he says, “is this.”
He lowers himself into a seat across the table from me.
“I was in the process of having some discussions with Jeep about how they were trying to recommission their brand. They were trying to skew a little bit younger, they were getting ready to launch the Jeep Commander, the first seven-passenger Jeep to hit their portfolio. It was supposed to be the granddaddy of the Jeeps, the most luxurious.”9
The first conversations with Jeep and parent Chrysler took place in late 2004, around the time Jay-Z was preparing to ascend to the presidency of Def Jam. The initial negotiations were part of McCammon’s job at American Specialty Cars, a company often hired by Detroit automakers to make quirky-looking models like the throwback pickup Chevy SSR. Hoping to secure a contract from Chrysler to produce a souped-up version of the Jeep Commander, McCammon asked the well-connected Serch what it would take to get Jay-Z to lend his name to a special-edition Jeep Commander. “Serch was like, ‘Yeah, it’s gotta be the top of the line, it has to be the best of the best,’ ” McCammon recalls. “And that’s the way Jeep was selling this truck.”
So McCammon took the idea back to the executives at Mopar (short for “Motor Parts”), the automobile parts and services arm of Chrysler. With their blessing, he would have Serch reach out to Jay-Z and start the process of agreeing on terms and picking specs for the vehicle. But getting approval from the Chrysler brass proved to be a little tougher than McCammon had anticipated. “I probably went to four different executive level meetings with directors and VPs inside of marketing at Chrysler explaining [the Jay-Z Jeep concept] to them,” he says. “First, one guy was like, ‘Oh, Jay-Z, that’s cool, but we don’t want to do anything with that Puffy guy, didn’t Puffy get arrested? We don’t deal with anybody who got arrested.’ Then somebody else found out that Jay-Z used to be a drug dealer. ‘Oh, we can’t do anything with that.’ And I spent most of the time just trying to break down the stereotypes or the misconceptions of Jay’s evolution as a person.”
McCammon persisted, arguing that a Jay-Z edition Commander would be the best way to rejuvenate the brand’s image. After all, Jeep had once enjoyed tremendous credibility as an urban brand in the mid-to-late 1980s. In the 1989 hit “Big Ole Butt,” rapper LL Cool J dropped a reference to his “homeboy’s Jeep,”10 and he wasn’t the only artist to associate himself with the brand. “Look at New Jack City, when that blew up, they bought themselves a Wrangler and ran it through Harlem,” says McCammon. “Back in the day, Jeeps were the thing, but they kind of lost their flair after a while. So we thought we had a chance to bring it back.”
Jay-Z seemed to be a perfect candidate to aid that effort. Fresh off the multiplatinum Black Album and a muchballyhooed retirement party at Madison Square Garden, he was riding a wave of popularity that was high even by his own lofty standards. By the beginning of 2005, McCammon had prevailed upon Chrysler’s executives to move forward with the Jay-Z project. Serch convinced Jay-Z’s camp to get on board, and he and McCammon started brainstorming the vehicle’s specs: butter-cream leather seats, twenty-two-inch chrome whe
els, and a digital entertainment system preloaded with all of Jay-Z’s songs. The color? Jay-Z Blue. “It was real sweet, but it wasn’t gaudy,” McCammon remembers. “It was really classy, kind of like the way we thought Jay would want to rep his brand.”
The Jay-Z Jeep was also going to represent the interests of the rapper’s bank account. According to McCammon, negotiations for his up-front fee were to start at $1 million, plus up to 5 percent of every Jay-Z Jeep sold. With its impressive list of specs, the vehicle would have retailed for about $50,000, in the neighborhood of what a normal Jeep Commander would cost with all options included. The initial run of one thousand vehicles was projected to earn Jay-Z a royalty rate of $2,500 per vehicle, or $2,500,000 in total—and exponentially more if it enjoyed the mainstream success that McCammon and Serch expected—all for simply lending his name to what was, quite literally, a cross-promotional vehicle. Says Serch: “It would have been a home run.”11
The week before Jay-Z was set to fly to Detroit to seal the deal, McCammon called Chrysler to confirm. But in the days after McCammon convinced the company’s executives of Jay-Z’s legitimacy, there had been a reshuffling of management. The new boss at Mopar, the Chrysler division responsible for the deal, didn’t want anything to do with Jay-Z, despite appeals from McCammon.
“I’m like, ‘Dude, I’ve got Jay-Z flying into town,’” McCammon recounts. “ ‘It took us a month to get on his schedule.’ And I don’t know if he didn’t believe that we’d delivered Jay, but we kind of got brushed off. We found out later that they shifted the whole organization around, and the first guy we were talking to got moved over and moved out, and this other guy came into play. We ended up having to call Jay and renege on the meeting. Serch, of course, blew a gasket, and I came off looking like a schmuck.”
McCammon and Serch have slightly different opinions on why the deal fell apart, but both agree that one of the root causes was the reluctance of Chrysler’s brass—particularly, the new leadership of its Mopar division—to embrace an artist who happened to be a former drug dealer. Even in early 2005, as Jay-Z was ascending to the presidency of Def Jam, Detroit’s focus wasn’t on his present and future, but on his checkered past. “A lot of big corporations don’t understand popular culture,” says McCammon. “And they don’t understand, necessarily, the story of a guy who works his way up from the street to become a prominent business person. They hear the street piece, and they get stuck on that. So I think it was a combination of the two things that really broke it down.”
Serch, who is white, puts it less diplomatically. “The automobile business is run by elitist white men who are very scared of losing their power, who would rather see the whole thing crumble and fall apart than to give up their power,” says Serch. “The white elitist arrogance in the automobile business is pretty much the main reason why the business has fallen apart . . . I’ll stand behind that until the day I die.”12
While McCammon pondered and Serch seethed, Jay-Z went back to business as usual. If he was upset about the downfall of his namesake Jeep, or if he shared Serch’s anger toward the Detroit establishment, he didn’t make a lot of noise about it. At any rate, there were plenty of other corporate suitors lining up for his endorsement services, and a few of his own deals to be made.
In 2006, the year after the Chrysler debacle, Jay-Z scored a deal to shill Hewlett-Packard. The pact included a sixty-second spot where he shows off all the things he can do with an HP Pavilion notebook. Decked in a navy suit complete with Windsor-knotted tie, he ticks through his projects, including the latest campaign for his clothing line Rocawear, plans for his upcoming world tour, and just for good measure, an online chess game. Jay-Z’s association with Hewlett-Packard—and, in 2006, Armand de Brignac champagne—proved he didn’t need an ailing automaker to boost his fortunes. Those deals also underscored Chrysler’s myopia: Jay-Z’s drug-dealing past was enough to scare a major car company into abandoning a project, yet purveyors of pricey consumer electronics and gilded bottles of French champagne were elated to receive his support. (In what was perhaps a conciliatory gesture to the hip-hop world, Chrysler featured Snoop Dogg in a series of commercials with former CEO Lee Iacocca in late 2005.13)
Jay-Z also had deals brewing beyond the endorsement market. In the autumn of 2005, Jay-Z and two Rocawear partners paid $22 million to buy former partner Damon Dash’s share of the clothing line they cofounded.14 Barely a year later, Jay-Z and his partners made good on their investment by selling the brand to licensor Iconix for $204 million, with the potential to earn up to $35 million if the clothing line met certain sales goals.15 As a licensor, Iconix’s business plan was to scoop up valuable smaller brands and produce their goods at a lower cost than the original owners could. “They purchase the trademarks of a particular brand, which is typically the most valuable asset of a clothing company,” explains Greg Weisman, a fashion industry lawyer at the firm Silver & Friedman in Los Angeles. “They believe that through their licensee network, they will be able to sell a variety of products and take it through their distribution network, which is usually wider and deeper, especially internationally, than what the original company was doing.”16
With all the exposure it had gained through frequent mentions in Jay-Z’s songs, Rocawear was a perfect acquisition target. What made this deal unique for Iconix was the level to which the former co-owner, Jay-Z, remained involved. As part of its purchase, Iconix entered into an agreement to have Jay-Z endorse, promote, and manage Rocawear and to establish a new joint venture to identify and buy new brands.17 So even though Jay-Z was selling his equity stake, he assured himself a steady revenue stream from the company he’d just technically sold. Though Jay-Z’s annual take for staying on at Rocawear wasn’t specified in the SEC documents that accompanied the sale, industry sources say he receives $5 million per year for his efforts.
Trading an ownership stake for a more traditional endorsement structure plus some stock options turned out to be quite shrewd. The Iconix deal closed in March of 2007, toward the peak of the market. Did Jay-Z flip Rocawear near its highest value, on a hunch that there may have never been a better time to sell? “It sure sounds like it,” says Weisman. “Most apparel [mergers and acquisitions] deals halted in somewhere between late 2008 and the beginning of 2010. . . . If you weren’t set up well to absorb a 20 to 40 percent dip in your sales, you were out of business by the end of 2009.”
Even with all his other business interests clicking, Jay-Z didn’t forget about the auto industry. In January of 2007, just two years after the collapse of the Jay-Z Jeep deal, General Motors hosted a gaudy gala on the eve of the North American International Auto Show in a gigantic tent on the shores of the Detroit River. A procession of celebrities, including Carmen Electra and Christian Slater, escorted new vehicles down a brightly lit runway. But the star of the show was the man who emerged from a GMC Yukon—none other than Jay-Z.
The vehicle, glazed in a resplendent coat of Jay-Z Blue paint, was billed as the product of a partnership between the rapper and General Motors. Reporters on the scene were told that Jay-Z had been working closely with the company to develop the concept over the past two years. “Hopefully I’ll be able to drive one of them out of here tonight,” Jay-Z quipped.18
McCammon and Serch were livid when they heard what happened at the show. “It was the exact same thing that we’d worked up,” McCammon recalls. “Jay-Z Blue, twenty-two-inch chromies. They rolled it out, and Serch sent me this note like, ‘What the fuck, this is absolute bullshit.’ He was completely blown.”19 To be fair, Jay-Z had every right to attach his name to any vehicle he wanted, especially since the Jay-Z Jeep fell through by no fault of his own. What frustrated Serch the most was the nature of the GM deal—though the vehicle was presented as a concept car that might hit showrooms within a couple of years, GM never had any intention of making a Jay-Z edition Yukon. “He got a really large check for coming out of that vehicle, but there was no other plan besides that,” says Serch. “They didn’t e
ven show it at the auto show. That was literally just for posturing and just for the big walkout.”
GM wanted Jay-Z to hop out of the Yukon for two reasons: to promote Jay-Z Blue as an option on other cars and to give their brand credibility with the millions of people who respected Jay-Z. Unlike Chrysler in 2005, GM in 2007 recognized Jay-Z’s value as a marketer, past exploits and all. “The head guy at GM, he got it,” says McCammon. What he didn’t get, according to Serch, was that nobody would go out and buy a car based on its color. “[GM believed] that they were going to get clamors of people, of African American buyers, to go into automobile stores and ask for Jay-Z Blue—‘Can I get this vehicle in Jay-Z Blue?’—but that’s not how an automobile buyer buys a vehicle,” says Serch. “You have to see it. Has to be a tangible. Any real automobile guy knows this. They set it up for failure.”
Sure enough, GM never produced a street-ready line of Jay-Z Yukons, and by 2008, the Jay-Z Blue idea had gone the way of Armadale Vodka. (At press time, the U.S. Patent and Trademark Office still listed “Jay-Z Blue” as a live trademark, but it often takes at least three years after a brand’s demise before the department declares it dead.)20
Even so, that doesn’t mean Jay-Z’s dealings with Detroit were a failure. Yes, Chrysler backed out of the Jeep deal—thereby killing the Jay-Z Jeep—and GM never intended to see the special-edition Yukon hit the showroom floors. But in the end, Jay-Z was paid a heap of money to walk out of an SUV (Serch says the rumor in the industry was that he received a seven-figure fee).21 Perhaps by that point, he and Steve Stoute had decided there wasn’t a future for Jay-Z Blue anyway, and the Yukon deal was the best they could get. As Warren Buffett says, “Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks.”22 Jay-Z was wise not to spend too much time on the latter.
Empire State of Mind Page 14
