Will Dr. Dre Be the 'First Billionaire in Hip-Hop'? A Look at the Apple-Beats Deal

Dr. Dre, Timbaland Surprise Graduation Party
Getty Images

Dr. Dre

With news breaking yesterday evening of Apple's acquisition of Beats Electronics for a reported $3.2 billion, the question of whether Beats principle Dr. Dre (née Andre Young) -- who co-founded the company with Interscope boss Jimmy Iovine -- stands to become the wealthiest hip-hop artist or not is something many are wondering.

Put another way by Dre himself, he could be “The first billionaire in hip-hop, right here from the mother-f$%&*#$ West Coast, believe it!” (see Gif below)

(Gif: Matt Bardins)

Dre’s words are from the video (below) posted to Tyrese Gibson's Facebook and came within hours of the Apple-Beats news. In the video, featuring a group of "homies drunk off of Heineken,” Tyrese calls his crew the “billionaires boys club," saying "the Forbes list just changed” and needs to “updated,” before Dre makes his monetary boast.

The Forbes list in question came out last month and had Sean "Diddy" Combs topping annual survey with $700 million in earnings, due in large part to his deals with Ciroc and his recently-launched Revolt.tv. Second on the list is Dr. Dre at $550 million, thanks largely to his stake in Beats. The company controls two thirds of the premium headphone market, according to Forbes, and has annual sales reportedly in excess of $1 billion.

Beats Electronics is a privately held company and therefore does not have to make detailed financial information public. Companies only have to make that information available when they register for IPOs, according to SEC regulations.

Dre's stake in Beats is estimated to be in the 20-25% range. If he were to earn that amount directly from the $3.2 billion sale his take would be somewhere between $640 million and $800 million, before taxes. With that amount, combined with his earnings of $550 million last year as well as his other income streams (album sales, publishing royalties, his work with HP laptops) the hip-hop legend would be very close to a net worth of a billion dollars.

So: If the deal doesn't make Dre the first hip-hop billionaire, it definitely puts him close to it. It's a many Gs thang.