What is Business?
Michael Fleisher, Back Business is Working with Cool Bands The Business of Music: Hip Hop Moguls

What tops rubbing elbows with rock legends, watching the Grammys from the audience, and snagging tickets to the most exclusive concerts in town? Getting paid for it. In terms of coolness, nothing surpasses a job in the record industry. Serious music enthusiasts can transform a basic desk job into an outlet for their passion and they amass a kicking CD collection.

Michael Fleisher, CFO of Warner Music Group, concurs. "I absolutely love my job," Michael says. With the music monolith since 2004, he describes the industry as one filled with dedicated employees who absolutely love music. The 1987 Wharton grad adds that it's an exciting time to be in the industry as it redefines itself in the digital age.

So how can you get to the top of the record heap? You don't need Mariah Carey's pipes or Paris Hilton's connections. Michael recommends hard work, good goals, and doing what you love.

At what age did you become
interested in business?

My grandfather owned a men's clothing store, and I started working there when I was 7 or 8 years old, so I knew early on that this is what I wanted to do. I always thought that I would run the family business, but my grandfather sold the business with two messages for me: Message number one was that he wanted me to do something bigger and better. Message number two was that he wanted to spend every penny he made before he died.

So why did you pick Wharton?

I knew that business was what I wanted to do, and the notion of an undergraduate business degree and the potential of never having to go back to get my MBA was very enticing. And Wharton was and still is the preeminent place. If you want to get an undergraduate business degree, and you know that it is going to be enough to carry you for the rest of your career, Wharton is the place to do it.

What did you like best about Wharton?

The real answer to that is cheese steaks! The best evenings were when you were able to do both Pat's and Geno's. Seriously, for me the best part of Wharton was the combination of the practical with the theoretical. I concentrated in Management, and I studied Entrepreneurial Management. I had all these great classes in Finance and Accounting and all these other disciplines, but I wanted the pragmatic. I wanted to see professors who had done it before. I got a tremendous amount out of people who were very pragmatic.

Did you know what you wanted
to do when you graduated?

No. I didn't know exactly what I wanted to do. I was pretty sure that I wanted to be an operator. If you think back to the spring of 1987, most people went into investment banking, but that turned out to be a bad decision because of the market crash in late '87. I chose to go into consulting because I had spent so many years in my family business telling them how they should run it. Everybody told me I'd be good at telling other people how to run businesses. Certainly the path to where I am today was not a straight line.

So how did you get to where you are today?

I went to Bain & Company and did consulting work for several years. After a few years, I went to Bain Capital, doing venture capital and buy-out investing. One of the first companies we invested in was a company called Gartner Group-they did technology and market research. About three years later, I joined Gartner to do business development work and M&A activity. I spent 11 years at Gartner and eventually became the CFO and then Chairman and CEO. I ran Gartner as a public company for about five years until August '04.

Then I decided it was time for a break after 11 years in the same place. The guys at Bain Capital, where I'd been before, introduced me to Edgar Bronfman here at Warner Music who was looking for a CFO. I was really intrigued by the opportunity to learn a whole new industry after a decade in the technology industry. To me, one of the best times to enter an industry is when everyone else thinks there's a problem with it. The music industry is like that. In the last few years, everybody's looked at it like, this technology thing is going to wipe out the music industry.

Has anything surprised you about it?

One is that, even though it has a very creative process to it, it's no different from any other business. The other thing, especially in the CFO role, was how many people in this industry have been in it their whole lives. Regardless of what job they do, they're passionate about music. We have accountants here who have spent 20 years in the music industry as an accountant because they are passionate about the music business. I think that is unique, that people have this personal passion that leads them to want to stay in a particular industry.

Do you have a background in music?

I don't. At all. I have a passion for music, but I don't think I have a passion for music that is different than the average person. What I will say is: now that I am here, I have a great passion for our artists and our music.

I'm sure you have a great CD collection.

I have a growing, great music collection, though most of it's digital. Most of it is on my digital device and CDs.

Do you have an iPod?

I do have an iPod.

The big one?

Yeah, I have the big one.

So what music are you
uploading these days?

I have a broad cross-section of music that I love around here. Some of my favorites? We have a new artist. His name is James Blunt. James is probably my favorite of our new artists. I tend to be a traditional rock and roll guy.so Jet, Simple Plan, Green Day's our big hit over the last year, so I have that. You know there is some stuff for me on the urban side that I like a lot. The new Missy Elliot I think is pretty great. Those are probably the things I am listening to right now. Oh, there's a brand new CD we released last week by Death Cab for Cutie that's phenomenal.

They were pretty underground for a while.

They were an underground, indie band. This is their first major label release. It’s a great record.

Besides the music hook-up,
what’s it like working in the music
business as compared to Gartner?

The music business has a lot higher public exposure. When you are in a more consumer-oriented business, everything we do ends up on the front page of the newspaper. I think that’s probably the greatest real difference in what I do everyday. Everything is out there front and center. Everybody cares. And you have artists who are incredibly talented, but are also out there living in the world, and their personal lives have an impact on how your business operates. And so that is different, that I can read about some artist and what they’re doing and that can affect our company.

Do you find people know who you are more?

Yes and no. Now instead of going to big tech conferences, I get to go to great concerts and shows and interesting parties, so that part of it has been a huge plus. I have two boys who are just about to turn six and eight, so I got to take them to their first concert at Madison Square Garden. That was really fun.

Who was it?

I took them to see Jet, who was actually performing as an opening act. It was great because I needed to take them to something that would end reasonably early. It was way past their bedtime, but it was very cool to go to a show.

I’m sure they think your job is really cool.

Yeah, they haven’t quite figured it out yet. They’ll get there. You know, they’re still at that age where they haven’t quite figured out what I do. They definitely think this job is more interesting than my last.

Is there more pressure
on you since it’s so visible?

You’re definitely under a higher-powered microscope because it’s the music business and you’re dealing with personalities. But you’re also under that microscope because people are trying to understand the opportunity for the music in the digital world. So I think people watch that very closely.

Do you run into rock
stars? Who was the best?

I think the best for me—and it really shows my age—was meeting Jimmy Page. I got to stand next to Jimmy Page while he played on the podium at the New York Stock Exchange. He was right there next to me, and that was pretty cool. The other person I got to meet that was pretty cool was a guy named Ahmet Ertegun who was the founder of Atlantic Records. Ahmet was the person who discovered Ray Charles and helped him early in his career, as well as so many other incredible artists. He’s in his 80s and he comes to work here every day. He’s a living legend. One of my first experiences with Ahmet was flying to Los Angeles on the weekend of the Grammys. We arrived in Los Angeles at 8:00 at night, 11:00 east coast time. And I’m pretty exhausted, you know, calling it a night. I dropped Ahmet off at his hotel and he said, oh, I’m going out. And he’s in his 80s. I thought: this is somebody I should emulate in my life. 

Do you think it’s youth or experience
that helps you in the music world?

I think it’s probably both. I think that the trick to being successful when you’re young is having respect for the people who have experience around you. And that’s been tremendous for my career. When I first became the CEO at Gartner, I was 34 years old. To run a public company at 34 was a fantastic experience, but it never would have happened if I didn’t have a tremendous amount of respect for the people who were mentors in my life—whether it’s my grandfather, my father, or a guy named Manny Fernandez who ran Gartner for many years.

You’ve got to have respect for those folks, and you’ve got to be able to admit what you don’t know. I think too many people, when they are young, think they’re supposed to know everything and tend to be a little brash because of that. If you can get the most experienced people to help you be successful, that’s always a winning strategy.

What’s your advice for business students interested in the music business?

First and foremost, you have to have passion about music. You have to have passion about what you do. It’s not enough to say, I’m an accountant or I’m a marketing person. It’s more like, here are my experiences and here are my capabilities and I want to apply them in a place where I have great passion. It’s marrying those two things.

The other thing is, a lot of younger people see the end goal and want to get there quickly. It’s really about doing a good job and putting in the time to do the hard work. When you’re not actually trying to get to that end is when you get there.

Paying your dues?

It’s paying your dues, but not in a drudgery way. Find stuff you enjoy doing. So many people have an end game in mind but don’t think about, “what do I love doing every day?” Every single person that I have ever interviewed for a job, the most important question that I ask is what do you love to do every day. Because at the end of the day, if they don’t love doing the job, they aren’t going to be happy and they aren’t going to do it well.

Hip hop artists may tout their thugged-out lives in their rhymes. But when the back beats stop, these rappers often act like Donald Trumps and not Tony Montanas. Today, what separates a one-hit wonder from a rap superstar is the latter’s ability to transform himself or herself into a hip hop mogul. Without a clothing line, a restaurant, an energy drink, a sponsorship deal, a movie contract and a video game—oh, and don’t forget several multi-platinum albums—you’re no one in the rap world. Here are five of the top business stars in the hip hop world:

The Founding Father: Russell Simmons

A.K.A.: The Godfather of Hip Hop

Why he’s on top: If hip hop mogul were in the dictionary, you’d find Russell Simmons’s picture right next to the entry. Sure, he isn’t a rapper, but this music tycoon earned his props by bringing hip hop to the rest of the world. From his NYU dorm room, he and partner Rick Rubin launched Def Jam Records in 1984, signing such artists as L.L. Cool J. and Run-D.M.C. Simmons wrote the book on hip hop  moguldom, with strategies like: forge corporate partnerships, keep partial ownership of ventures, secure royalties and fees, and explore new markets. In 1999, the master of the game sold his share of Def Jam in 1999 to Seagram Universal Music Group for $100 million. Today, he’s the CEO of the multi-million dollar media company Rush Communications and the producer of “Def Comedy Jam,” “Def Poetry Jam,” and “The Nutty Professor.” He also has an energy drink, a cell phone line, and a luxury watch line. In 2004, he sold his Phat Farm clothing line to apparel giant Kellwood for $140 million—chump change for a man who owns a marble toilet with a gold-plated seat.

What’s Next: A yoga series called “Russell Simmons Presents Yoga Live” and UniRush Financial Services, which will assist minorities who want to climb out of financial debt.

The Apprentice: Shawn Carter

A.K.A.: Jay-Z, Beyonce’s Boyfriend

Big Man on Campus: For a man who claims he’s retired, Shawn Carter sure works hard. He’s already dropped two collaborative albums since he called it quits: “Collision Course” with Linkin Park and “Unfinished Business” with R. Kelly. Music-making aside, Carter appears to be following in Russell Simmon’s footsteps. He built the record label Roc-a-Fella from the ground up with partner Damon Dash, and, in late 2004, Carter became President and CEO of Def Jam. Like Simmons, he’s diversified his interests, with the upscale Manhattan sports club 40/40, a stake in the new Nets arena, the Rocawear clothing line and ownership of Armadale Vodka. And his shoe collaboration with Reebok, S. Carter, was the company’s fastest-selling shoe.

99 Problems?:  Jay-Z’s rise from street thug to corporate king hasn’t been easy.Trouble follows this rapper everywhere he goes. The former drug dealer from the projects was put on probation after the 1999 stabbing of fellow rap mogul Lance Rivera at the Kit Kat Klub in New York. He also narrowly escaped gun possession charges in 2001. These days his problems are more civil. R. Kelly threatened him with a hefty lawsuit after their joint concert tour ended abruptly in October 2004.

What’s Next: Word on the street is that Jay-Z will do the music for the much-anticipated video game based on the movie Scarface. He also teamed with New York Knicks star Jamal Crawford on the new S. Carter basketball shoe for Reebok. Maybe they can call them Air Jay-Zs.

The Over-Achiever: Sean Combs

Alias: Puff Daddy; P. Diddy; Diddy; J. Lo’s ex.

He ain’t goin’ nowhere: Why does Diddy wear so much bling? Because he can. The rapper/designer/actor/producer/ restaurateur may be the hardest working man in show business. These days you can’t turn around without finding this entrepreneur. The founder/head of Bad Boy World Entertainment pumped up voter support with his “Vote or Die” campaign, starred on Broadway in “A Raisin in the Sun” and hosted the 2005 VMAs in Miami. And he still has time to be the boss of a multimillion dollar conglomerate that includes the Sean John clothing line, Bad Boy Records, two restaurants, and Blue Flame Marketing and Advertising. In his spare time, he also produces Making the Band for MTV and stars in the occasional movie. How does he do it all? Drive and an eye for talent. In less than 10 years, he went from being an unpaid intern to the head of a record label that discovered Notorious B.I.G. And his visibility keeps him a household name. Let’s hope he stops before the opening of Diddy World and McDiddys.

Bad boy for life: Like Jay-Z, P. Diddy’s street ways almost cost him his career. In 2000, he was acquitted of gun possession and bribery charges stemming from a 1999 shooting at a Manhattan night club. He also had to take anger management classes for the 1999 beating of record executive Steve Stoute.

What’s next: Combs has a knack for staying one step ahead of everyone else. Just as industry analysts announced another slow year for urban clothing lines, Combs announced that his Sean John line would go more conservative and expand into men’s suits. And he’s eyeing a West End theater in London, which he hopes to turn into a night club. And he’s Making the Band 3 on MTV. And he’s considering opening a hotel in Atlantic City. And…

The Medicine Man: Andre Romel Young

A.K.A.: Dr. Dre

Chronic success: Back before gangsta music was mainstream, it was an anthem for struggling areas like Compton and East L.A. These mean streets gave birth to the controversial group N.W.A, with Dr. Dre at its helm, which rocked the music world with its anti-police, drug-laden lyrics. Dre left the group in 1991 to form the notorious Death Row Records with Suge Knight. He later launched the record label Aftermath Entertainment after a rift with Knight. The rapper/producer had a talent for finding talent and launched the careers of hot shots like Snoop Dogg, Eminem, and Tupac Shakur. Dre also found success on the big screen, with roles in Set It Off, The Wash, and Training Day

Chronic problems: The road to success hasn’t been easy for Dre. He left N.W.A. because of a rift with co-rapper Eazy-E, who became a punch line in many of Dre’s solo videos. He later split with Death Row partner Suge Knight after Knight was brought up on racketeering charges and Death Row artist Tupac was gunned down in a drive-by shooting. Dre was a key player in the East Coast/West Coast rap battle of the early ‘90s.

What’s Next: Dre will reunite with his protégé Snoop Dogg for the album “The Blue Carpet Treatment,” to be released in 2006, and rumors suggest that he will also release another solo album.

The Freshman: Curtis Jackson

Alias: 50 Cent

What’s hot: One of the hottest young rappers out there, 50 Cent dominated the scene with his smash debut “Get Rich or Die Trying.” This quick study quickly parlayed his rap success into business ventures outside the music industry, including the G-Unit clothing line, a sneaker deal with Reebok, and Formula 50 Vitamin Water. And he’s always on the prowl for new talent to mentor.

What’s not: 50 has more feuds than, well, Jay-Z. His most recent is with the Game, a member of his G-Unit posse. 50 Cent showed a lack of class—and smarts—when he announced the Game’s dismissal on live radio (a shooting ensued outside the station that day). 50 and the Game called a truce shortly after, shaking hands in public to show their love. Smells like a publicity stunt. Hey 50, is this how you do it?

What’s Next: A film about his life in which he stars and “Bulletproof,” a gangsta-style video game.

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