He's worth an estimated $450 million and hobnobs with Bill Gates and Warren Buffett. How the Brooklyn-born performer has become the leading music impresario of his generation.
Rolling through New York City in the back seat of his black Maybach, Jay-Z touches a button to let more light through the translucent roof, then tugs back a window curtain to peek out at the rainy streets of his hometown. The rapper went from a Brooklyn housing project to a top corner office near Times Square, a path traced in "Empire State of Mind," his anthem to the city that has taken a place next to Sinatra's.
At age 40 and still rapping, Jay-Z inhabits the rare zone where cultural cachet and corporate power meet. He's had partnerships with Hewlett-Packard, Coca-Cola, Budweiser, Reebok and Microsoft. Forbes magazine put him on the cover of its current 400 "Richest People in America" issue, even though at $450 million he was only "on his way" to cracking the list ($1 billion was required this year). He's posted more No. 1 albums on the Billboard 200 list than anybody but the Beatles, has won 10 Grammy awards and sold 45 million albums.
He's using his clout to rewrite some industry rules. His music company hedges the unpredictable business of music sales against steadier revenues from music publishing, artist management and touring. The company, Roc Nation, was created out of a $150 million, 10-year, profit-sharing deal with concert giant Live Nation, which has made bets on acts such as U2 and Madonna that are similar, though narrower in scope.
Jay-Z's ventures include an ownership stake in the New Jersey Nets; a sports-bar chain called the 40/40 Club and a Greenwich Village bistro, the Spotted Pig; creative and operational control of the Rocawear clothing line that he sold in 2007 for $204 million; and the Carol's Daughter beauty line he co-owns.
In the early days of his entrepreneurship, there were awkward exchanges with white-collar guys trying to relate. "In the beginning it was ' 'Sup, man!' " he says in his soft speaking voice. "But at this point, it's pretty much accepted that I walk both worlds naturally."
And yet, he chafes at the lack of respect for a genre that some people still dismiss wholesale because of ugly words and violent imagery. When he shares strawberry malts with Warren Buffett, confers with the president, or even vacations in St. Tropez, he does so on behalf of "the culture," he says, by which he means hip-hop.
Now, to state his case more clearly, the rapper born Shawn Carter has turned to prose. His first book, "Decoded," to be published Nov. 16, is a hybrid of music history, social commentary and memoir, with an emphasis on his transition from the crack trade to the music business. The 336-page book is structured around the lyrics to 36 Jay-Z songs, each footnoted to unpack his allusions, slang and double entendres. This couplet, "No lie, just know I chose my own fate/I drove by the fork in the road and went straight," is explained in footnote 16 to the song "Renegade": "I went straight—stopped selling drugs—but I also didn't accept the false choice between poverty and breaking the law." Microsoft put up about $1 million for the marketing of the book.
He had rejected proposals to write a conventional business-strategy book. "Our ambition was never to just fit into the corporate mold, it was to take it over and remake that world in our image," he writes in a footnote to "Operation Corporate Takeover," a song that rhymes "reverse merger" with "no need to converse further.
The book deal follows his classic playbook. He maintains tight creative control of the project, but often connects with deep-pocketed corporate partners. Companies hope to borrow some of the rapper's glow, of course, but he has also used such deals to shape his own public image.
In 2005, Jay-Z completed an autobiography with writer Dream Hampton. But he felt that the memoir, tentatively titled "The Black Book," revealed too many personal details. "It was great, but I couldn't do it," he says. He shelved it, reimbursing publisher MTV Books for the advance paid to Ms. Hampton (who later helped with "Decoded").
Last year Jay-Z signed with Random House. Editor Christopher Jackson had some initial doubts about the proposed concept, an annotated book of lyrics, but in their first meeting, he says, the rapper fleshed out a broader context of rap as poetry and "a story of choices made." (That format allowed Jay-Z to dip into memoir while guarding intimate details, such as his marriage to singer Beyoncé Knowles, who is barely mentioned in "Decoded.") In meetings, Jay-Z also specified what the project would not involve, including a celebrity book-signing at a Barnes & Noble. "It's a very efficient way to sell a lot of books and it would have been a huge event, but he was completely uninterested in that," Mr. Jackson says.
Jay-Z is careful not to overexpose himself. "He'll decline something based on his gut, then he'll tell me, 'If that play's big, watch the bigger play that comes because I said no,' " says Kevin Liles, a marketing executive and friend. Last year, when influential radio station Hot 97 had new Jay-Z songs in heavy rotation, Jay-Z declined an invitation to headline the station's high-profile Summer Jam concert. He was clearing the decks for his own Madison Square Garden concert (and TV simulcast) on Sept. 11, which benefitted 9/11 charities.
On the cover of the book, the golden tentacles of a "Rorschach" print by Andy Warhol dwarf the rapper's name, tucked into a corner. He vetoed an early mock-up from his publisher that splashed "Jay-Z" across the cover in bold type. "It always starts like that," he says in the car, wearing jeans, a gold Rolex and loose-laced Timberlands. "I'm not trading on my name; I'm trading on the work."
The Microsoft-funded marketing campaign for "Decoded" is markedly ambitious. The company's Bing search engine is used in a kind of treasure hunt: Some 50 outside partners were recruited to help place book excerpts on everything from billboards to hamburger wrappers in about 300 locations cited in the text, including Miami and London.
Jay-Z has had an informal relationship with Microsoft going back to 2006, when he joined Bill Gates and Steve Ballmer at a conference, discussing the future direction of entertainment. Bing specifically has co-sponsored two of the most recent "Two Kings" dinners that Jay-Z hosts with LeBron James during the NBA's All-Star festivities.
Jay-Z's music career began in 1996, when no major labels wanted to sign the 26-year-old local rapper. He and two partners formed an independent label, Roc-A-Fella Records, by necessity. That move eventually strengthened his bargaining position. Mr. Liles, who was an executive at the iconic rap label Def Jam, recalls Jay-Z declining an offer of a traditional signing deal. "He looked at me and said 'I own the company I rap for.' " Instead, Roc-A-Fella entered a joint venture with Def Jam.
In 2005, Jay-Z took the job of president and CEO of Def Jam while rival labels courted him. What clinched the deal with the label—by then owned by Universal Music Group—was a contract clause giving the rapper full ownership of his past recordings for Def Jam. These rights revert to him starting in 2014.
"I'm happy about it," he says now. "But when I think about it, it's something I shouldn't even have to ask for. It's mine, I created it."
By the time he left Def Jam in 2007, he had begun quiet negotiations with Live Nation for his next move. To diversify its concert promotions business and compete more directly with record labels, the company had previously signed U2 and Madonna to long-term contracts that cut Live Nation in on revenue sources such as merchandise and music licensing, in addition to touring.
Jay-Z's deal goes further. With financing from Live Nation that included about $25 million up front and $5 million annually in overhead, the rapper started Roc Nation, an umbrella for his own output and an incubator for new talent. In exchange, Live Nation shares in all new business done by Roc Nation. That ranges from a percentage of potential "Decoded" earnings to publishing revenue from the songwriter Philip Lawrence, a Roc Nation signee who has had two No. 1 songs this year, including "Just the Way You Are" by Bruno Mars.
Like many in the industry, Jay-Z is trying to wean himself off a reliance on selling recorded music. His company has released only one album, his own "The Blueprint 3" in 2009. "It's been two years since the Live Nation deal and I haven't put out one artist," he says. "But right now Roc Nation is profitable because we manage [artists] and we have a publishing company." He says such ancillaries buy the company to time to shape the musicians on its roster, including rapper J. Cole and singer Willow Smith (the 9-year-old daughter of actors Will and Jada Pinkett Smith). "We don't have to rush out records that don't work for the sake of making money," he says.
Even as he represents hip-hop, his Live Nation deal compels him to move beyond that genre. In the last two years, he crossed over to headlining major rock festivals, including England's Glastonbury and Coachella in Southern California. Among the artists that Roc Nation manages are U.K. rock band the Ting Tings, producer Mark Ronson and, as of this week, Rihanna.
Many of Jay-Z's brand partnerships, including with Reebok and H-P, have been funneled through the marketing firm he co-owns, Translation. "It allows him to circumvent the agency process in most instances with someone he can trust," says Translation founder Steve Stoute.
Jay-Z typically bargains for a degree of creative control and long-term partnerships rather than one-offs: his deal with Reebok, when he became the first non-athlete to have a sneaker line with the company, lasted about four years. He has used such deals to shape his own public image. In 2006, he was hired to star in and help craft the campaign for Budweiser Select. Earlier that year he had lashed out at the makers of Cristal Champagne after an executive made remarks about rappers drinking Cristal that Jay-Z interpreted as racist. Through the Budweiser deal, he was "shattering that Champagne myth." He says it wasn't uncommon for radio stations to serve him chilled bottles of bubbly during morning promotional visits. "It's 10 in the morning! I don't drink champagne all day, every day." Looking back, however, he says Budweiser might not have been the best match. "A beer commercial? That was pretty much on the line for me."
In his office, by a coffee table stacked with art books (Damien Hirst, Ed Ruscha), his Forbes magazine and a humidor, he perches on the edge of a chair with his fingers tucked into his pockets. He says he'll always rap about variations on the same themes: drug hustling, business boasts, luxury hopscotching from Gucci to Louis Vuitton to the new Dior suit he says is a perfect fit. They're all narrative devices:
"I'm just describing a scene, but the crux of the story is the message. Almost like a movie. Setting: South of France. This is what's happening. This guy from out the projects who didn't graduate from high school is now living this sort of life. And this is how he got here."
Read Excerpt From Book After Jump
One of the biggest stars in the world -- Beyonce -- has turned to Madison Avenue to offer up some branding help, Ad Age has learned. 
