In an excerpt from a new book, early Def Jam Recordings Execs Lyor Cohen, Russel Simmons, Rick Rubin, Chris Lighty, Kevin Liles, Julie Greenwald and Todd Moscowitz tell it like it was--at the founding of perhaps "The Last Great Record Label."

THE PRELUDE

RICK RUBIN: The great experience that I had going to hip-hop clubs wasn't being equaled by the records I could buy. There were only three 12-inch singles released every week. I bought them all. Once in a while there'd be a couple of good ones. They'd be good dance records?a band making music and guys rapping?but they wouldn't be good hip-hop records. Where was the DJ?the thing that makes it special!? So that was the idea: to create records that made me feel what I felt when I went to a club and heard incredible DJs cutting it up and great MCs rocking the crowd. I didn't know anything about the record business. I didn't know what a producer was. I didn't know about contracts. I just thought that people made music 'cause they liked music. My favorite rap group was the Treacherous Three. They played at Negril, and that's where I met Kool Moe Dee. I invited him over to my dorm room for a meeting. Moe's like, "I'm under contract, but talk to Special K [his partner in the Treacherous Three], because he's got a brother who raps and isn't under contract."

RUSSELL SIMMONS: I had a lot of records on the radio?"Bubble Bunch" and "Dollar Bill" with Jimmy Spicer and "Action" by Alyson Williams, and other records I produced?but I didn't know "It's Yours," and it was the best one on the radio. So I called up Red Alert. [Fred "Red Alert" Crute hosted a pioneering rap radio radio-mix show in New York.] Red Alert gave me Jazzy Jay. Jazzy Jay gave me Rick Rubin. Rick and I were a good marriage because he had fresh ears and he affirmed that what I was doing had greater legs than even I thought . . . So there's Rick's brilliance: He came from another culture and brought more to broaden the ideas that we had.

THE UPSTREAM SWIMMER: LYOR COHEN

LYOR COHEN: I was a financial analyst for Bank Leumi, 21, 22 years old. It was just after the Shah's fall in Iran. The Persian Jewish community had left there for Beverly Hills and come to us with bagfuls of money. But the bank's decision-makers were in New York and Tel Aviv, not in our branch. So my bosses were like bozos to me. It was obvious that I could never grow up to become like them.

Driving around L.A. one day in '83 or '84 I see these bright, gigantic posters reading "Uncle Jamm's Army" and nothing else. Very strange. A week later they say "Uncle Jamm's Army at the Sports Arena" on such and such a date. I was curious. [Uncle Jamm's Army was a crew of Los Angeles-based DJs that evolved into a party promotion firm.]

I went by myself, the only white person there. I was fearful, but not alienated. I felt like something could happen to me, especially when the lights got switched on at 11 o'clock. In the dark, everything's cool. You flip on the lights, then all of a sudden you could see all of the different sets. ["Sets" is L.A. slang for "gangs."] Not that I knew anything about that?ignorance is bliss. But it was a magnificent vibe of music, I was completely enthralled, and my excitement overrode my fear.

Also, I don't like being on the veneer. I wanna get deep. I wanna understand why things happen. And I never want to swim where other fish swim. I'm an upstream swimmer. It's easier to swim downstream, but I don't want to be one of the many. I want to be one of the few. That's always been my whole approach to things.

So I keep going back to Uncle Jamm's Army, and now they're starting to bring some rappers and I'm thinking, "I could hire them for much cheaper as a second gig, take them somewhere else, and make it interesting and provocative for other people"?because other people won't go down to the Sports Arena.

Then I'm cruising around my neighborhood in Los Feliz, and I drive by the Stardust Ballroom on Sunset Boulevard, just west of Western. It was a famous place. All the hardcore punk shows had taken place there. But now it's an ugly building that's seen the Circle Jerks one too many times. I go into this venue in the middle of the day, and there's this very wealthy, prestigious South Korean guy, a prince of a guy with a terrible, rough wife. He's bought a Hollywood nightclub, sight unseen. They were angry because they obviously got sold a bad bill of goods.

I said, "Can I four-wall it?" [When a promoter intent on throwing a party rents a space generally used for another purpose, he is said to be four-?walling it. For the duration of the party, the promoter has rented the space's four walls and everything within them.] That's how I started the Mix Club. My first show was in the summer of '84: Run-DMC, the Red Hot Chili Peppers, Ice-T and some other bands. What gave me the confidence to start promoting shows when I'd never done it before? I always had chutzpah?and I knew that I needed to get away from my job at the bank.

For the Run-DMC show, I sold very few tickets in advance because I was dealing with young punk kids who scrounge until the last minute before they make a commitment to a show. I had worked so hard. I handed out more fucking flyers than there were trees in San Francisco. Now I was standing out in front of the club, terrified, thinking, "This is a disaster. I'm embarrassed. I'm letting down these Korean people. I'm not going to be able to repay the money that I borrowed from my mother. What do I tell the band?" Then there was an explosion?3,000 people bought tickets in a 45-minute period?and it became one of the great L.A. nights.

Run told Russell what a remarkable show they'd had in L.A. and that's when Russell encouraged me to come to New York. Russell tells it in an entirely wrong way. But he offered me a piece of the company. I'd never met him.

So I say to my parents, "I've been offered an opportunity in New York and this is the situation: It's in a new music?they talk instead of sing." And my dad says, "If you're going to uproot your life in such a dramatic way, son, there's this thing called a contract . . ." Then my mother cut in and said, "Son, right now, you have no obligations. Contract or no contract, my recommendation is go for it. What's the worst thing that could happen? You'll come home and stay with us."

And can you imagine me trying to get a contract from Russell? It would've never happened. Instead, I fly to New York, and I come into the offices, and I thought there was going to be a marching band! Someone to greet the new partner! And everybody looked depressed. Obviously, Russell never mentioned I was coming. Typical Russell.

SIMMONS: You know I have no memory. I smoked a lot of dust. But I know for fucking sure that Lyor came to work as an intern and a kick-around. He worked for fucking Andre. "A piece of the company!?" For what? He was a promoter who loved rap, and he came for the music. He did all the work Andre was supposed to do as vice president of Rush and did it so well that Andre said, "Keep him." He might've told his parents that we offered him a piece. Nobody offered him anything . . . That's what he did. Lyor came to New York, then went on the road with Run-DMC and became their road manager. That was the first thing he did, and he did it very, very well. He was happy to be a road manager.

COHEN: Run-DMC were so big and powerful that by virtue of their endorsing me?and by virtue of the fact that people could see I was not playing around?no one ever questioned the fact that I had no experience or that I was white. It gave me an incredible amount of flexibility to build my career.

SIMMONS AND COHEN:BECOMING MORE THAN VELVET-ROPE RICH

Simmons: Lyor was very focused on the business end and a great deal-maker. He represented the artists so professionally that other artists wanted him to represent them.

Cohen: In the spring of 1985 I went out with the Fresh Fest. [The Original New York City Fresh Festival II, aka the Fresh Fest, was a 50-date national tour of rappers and DJs that commenced on May 31, 1985. It followed the Swatch Watch NYC Fresh Festival, the first national tour of rappers and DJs, which ran for 26 dates in the fall of 1984.] The bill was Run-DMC, Whodini, LL Cool J and Grandmaster Flash. I showed Russell the amount of money we got and I think that's when he picked up his head from his cranberry vodka and realized that we could be more than velvet-rope rich.

At that time, our whole mind-set was getting high, going out, getting past the velvet rope and being respected. If we made a good booking, we ate at Indochine. If we didn't, we ate $2 Chinese food. On both ends we were fed, and ended up getting high at the Roxy or Danceteria or someplace else. We had no money, but there wasn't a VIP room that didn't let us in. But when you start talking about 20% of tens of thousands of dollars, suddenly you have flexibility, and a switch happens: "Wow! Maybe, just maybe, we can make a real living at this." I always give credit to Russell for dreaming up the possibilities.

SIMMONS: One day I went to Lyor and said, "You know what? I'm starting a record company, and you're now half of the management company?you'll be a partner in it." He worked his way to that point and did an excellent job as a manager.

COHEN: Here's how I got my hard reputation: There were many times when we had to say no, and Russell doesn't want to disappoint anybody, so he loved that I would be the one to say it. But truthfully, I'm so bad at it. I get anxious and don't like disappointing. I'm a caretaker. I don't want to say no. But Russell would say something, then contradict himself. So I had to be the one. Naturally, it made me more and more powerful.

EXIT RICK RUBIN

BILL STEPHNEY: By 1988 Def Jam was suffering from a personality disorder. Was it the label of the Beastie Boys, Slick Rick, LL Cool J, Public Enemy, Slayer and Andrew Dice Clay?as cool, new music-y and hip-hop as it could be? Or was it the label that also boasted Alyson Williams, who should be right up there with Gwen Guthrie and Anita Baker? You could think of them as two separate entities: Def Records and Jam Records. Def was Rick's. Jam was Russell's. Def was hip-hop. Jam was R&B?except that Def was the part that paid all the bills.

SIMMONS: As a creative person, I had to make an Oran "Juice" Jones record. I had to make an Alyson Williams record. Chuck Stanley's "Day by Day" was a "big hit" for us. Of course, by today's standards, the sale of a couple hundred thousand albums is a failure, but at that time in the R&B business, it was a hit. These were records that sounded like my childhood. I made the Blue Magic record that I had in me and got it out. I betcha it's as good as any album the group made in their prime, but it was 10 years too late [laughs]. Still, I made records I enjoyed making. I had fun. So that's why it was perfect. [Blue Magic was a sweet-soul harmony group out of Philadelphia. Its biggest hit, "Sideshow," went to No. 1 on the R&B charts in the spring of 1974. Blue Magic's From Out of the Blue was released by a subsidiary of Def Jam called Original Black Records in 1989.] Rick wanted to make Slayer and his loud rock records. Meanwhile, he lost the Beasties and here's his hardcore rapper, LL Cool J, making "I Need Love." It was a fucking mess.

COHEN: I'm not quite sure that Rick and Russell really worked that well together. I think the reason they were a good team is because Russell wasn't interested in anything Rick was doing and vice versa. I rarely saw them together.

SIMMONS: Rick and Lyor didn't match. But Lyor didn't push Rick out. Rick just left.

COHEN: I didn't fuck with Rick all that much. I didn't get what he was doing at the time. I was close to the artists. He was not. I thought I had the power, and I was happy being with the artists. His life and my life didn't intersect very much.

RICK RUBIN: Russell and I were at the NoHo Star restaurant, where we ate all the time. I said, "Do you want to leave the company?" He said no. I was surprised that he cared, and I was also surprised that he didn't say, "What's the problem? Let's fix it." In retrospect, I guess I could've asked him the same question. The whole thing is that neither of us had that skill. So I said, "Then I guess I have to leave the company."

SIMMONS: If I was just a businessman, I would've begged Rick to stay and made it work. If I was just a businessman, I would've kept the Beasties. But for my own path it was perfect. Everything is perfect. And Rick needed the freedom to do all the things he wanted to do.

RUBIN: It's interesting how our lives played out because we both got what we wanted. My goals were always related to creating great art. Russell's goal, I think, was always to get a check. Had we stuck together with the idea that "we're gonna make great art and someday get a check," it would have been fine. But I felt that, sometimes, the "get a check" choices were made over the "great art" choices.

STEPHNEY: In my opinion, it was Rick who built Def Jam. Without question. In terms of its musical vision, its attitude, the logo?that all came from Rick. But if Rick built Def Jam, it's still subordinate to Russell's building hip-hop. Russell built the culture. There would be no hip Def Jam, or the success of Rick with Def Jam, without the magic of Russell Simmons, who essentially carried the culture on his shoulders and moved it all along.

COHEN: Was I surprised when Rick left? Yes, but necessity's a motherfucker, so what else was supposed to happen? There was no other way it could've played out.

GROWING RUSH: THE COMING OF CHRIS LIGHTY, THE FOUNDING OF RUSH ASSOCIATED LABELS

COHEN: Rush was growing. I was dominating rap music. We had 30-plus artists, and I needed help. Chris Lighty had an incredible pedigree, going back to Boogie Down Productions, and a working relationship with De La Soul, the Jungle Brothers and A Tribe Called Quest. He came from the same kind of community that all these kids came from, and he had a passion for hip-hop as a business as well as for protecting his artists.

CHRIS LIGHTY: By August of 1988 Shakim and I had formed Violator/Flavor Unit Management when Lyor says, "Come, give me your commissions, and I'll pay you $40,000 a year." I was like, "I'm making $40,000 a month now. Why would I want to??" "I could teach you stuff that you just don't know. Look at what we are. It's Def Jam. It's Rush. You want to be down with Rush." Lyor was persistent and, a couple of weeks later I said, "You know what? I want to learn." And I took him up on his offer.

COHEN: Very quickly, Rush was his company as much as mine. I wasn't, like, his boss. We worked together.

LIGHTY: But before I jumped into bed with Lyor, I met Russell. We're at Nell's and it's fucking bananas. [Nell's was a popular nightclub on West 14th Street named after its hostess, Nell Campbell, a former actress and dancer from London.] People were walking around with snakes, coke was everywhere, there were too many white girls, and this guy Russell's talking real fast and making no sense. I was like, "The curtain's pulled back on the Wizard of Oz?this guy must really run Def Jam." Plus, I had never been in a club with white people. It was probably five black people and otherwise nothing but white people.

COHEN: Chris has a hair trigger, a trigger with no safety. So the key is never to walk out of the house with it.

SIMMONS: Lyor kept Lighty when Lighty would start a fight in the street, when Lighty was a thug who didn't really know how to operate as an executive.

COHEN: Also, Chris was there when Scott La Rock was murdered. [Scott "La Rock" Sterling formed Boogie Down Productions with KRS-One and D-Nice in the Bronx in 1986. A social worker by profession, La Rock was shot and killed on Aug. 27, 1987, in an effort to defuse a dispute between D-Nice and some local hoodlums from the South Bronx. He was twenty-five years old and left an infant son.] So Chris is very conscious of how fragile life is. He had to make a conscious decision every day to stand above the fray. It's not about being soft. It's about knowing, "I have bigger, more important goals than to put a hole in you." It takes a lot of courage to step out and transform yourself. But that's what Chris did.

LIGHTY: I get this question a lot from other black executives in the music business: "Why do you fuck with Lyor? He's a fuckin' Israeli." And I go, "I love this guy!" Lyor is probably the most colorless person to me. He's never used the N-word. He's always been culturally relevant. So when he walked in the room, I never looked at him as a white guy. I looked at him like, "This guy's my father. This guy's my guy."

BILL ADLER: In 1989 Russell created Rush Associated Labels [or RAL] with Lyor because Lyor was always encountering new talent. Like Def Jam, RAL was funded and distributed by Sony, which was now the parent company of Columbia Records. Lyor used RAL to give boutique label deals to a lot of the Rush artists and producers, including Prince Paul from De La Soul, who created Dew Doo Man, and Jam Master Jay, who set up JMJ. Around the same time?not long after Rick left?Russell wanted to reconfigure Def Jam's deal with Sony. And Sony said sure because most of the artists were staying with Def Jam.

SIMMONS: But RAL complicated the Sony deal. Def Jam was paying all the bills, and RAL was draining them. Def Jam had some hits?LL Cool J would come along, Public Enemy would come along?but Lyor had a bad period. The only RAL label with any validity was JMJ.

COHEN: I signed the worst artists, one worse than the next.

THE EXECUTIVE TEAM

The new joint venture with PolyGram in 1994 ushered in the second age of Def Jam, and the coalescing of Cohen's power.

COHEN: When PolyGram bought half of Def Jam, they immediately sent me to the London School of Economics with 13 other presidents. It was an extremely valuable three-and-a-half-week course. In one exercise, they broke us into groups and gave us a scenario: We're flying over the Australian desert, the plane sputters, then crash-lands. I became the leader of my group and promptly marched us to our death. I was so distraught because I'm a paternal leader. I want people to believe that it's not about my getting out, it's about our getting out. I'm your leader because we are getting out together or dying together. So I stayed after class and asked the teacher to help me understand where I went wrong. And we reviewed the tapes over and over again.

The instructor pointed out the moment it all went wrong for me. There was a woman in our group who had the clue to everyone's survival. But she was dour and doubting, so I dismissed her. And the instructor explained to me that if you surround yourself with different types of problem solvers, not reflections of yourself, you will be a champion.

That's when I flew back home and created my team: Julie, my taste; Kevin, my action; Todd Moscowitz, my brain. My business exploded the moment I put that team together. And it was all because they problem-solved in different ways and we came to the right conclusion more times than not.

KEVIN LILES: When you become the president of an organization, it just can't be, um, "Run everybody over." You have to have some kind of finesse. That happened for Lyor at the start of the PolyGram era.

JULIE GREENWALD: I am a definitive student of the Lyor Cohen school of thought. He wanted us to super-serve the artist. He wanted us to make sure that wherever the artists were, the event was hot and sexy. And he was so in it and on top of us, that it was easy to see what was or wasn't working. Once Kevin and I were together in New York City, the two of us came to the office early in the morning and left late at night?and we were probably making the least amount of money of anybody. Finally, we put two and two together, like, "This is crazy. Why are we killing ourselves?" And one by one, we started to pick off all the dead weight. I'd be like, "This one's gotta go," and Kevin would be like, "That one's gotta go." And Lyor started letting us bring in great young hungry people. We were "home-growing" the staff at Def Jam. They'd start out as my assistant or Kevin's assistant, and then they'd get promoted to video or to press or whatever.

TODD MOSCOWITZ: I was 26 and didn't have a life. I'm one year out of law school. I'd never been trained to do business affairs. I worked 14 to 18 hours a day. I had a knot in my stomach the whole time. It was terrifying. The first thing I did was to go head to head with [attorney] Paul Marshall on LL Cool J. He was the meanest, toughest, most ornery guy. But I was very aggressive with him in the negotiations. And it allowed Lyor not to be the bad guy anymore. The chemistry between the two of us was awesome. It was classic good cop . . . [reconsiders]. It was bad cop, less bad cop.

Def Jam: The First 25 Years of the Last Great Record Label (Rizzoli), by Bill Adler and Dan Charnas, with prefaces by Rick Rubin and Russell Simmons, will be published Sept. 20.

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