Despite His Lengthy Career, Dr. Dre’s Fortune Comes From A Few Massive Deals

Although rapper/producer Dr. Dre has been famous for almost 40 years, it’s only in the last decade that he’s truly seen his wealth soar, pushing him to a net worth that is estimated to be between $500-850 million.

Dre, (Andre Romelle Young, born February 18, 1965) famously was one of the pioneers of West Coast Rap in the late eighties through the seminal N.W.A. (after getting his start with the World Class Wreckin’ Crew).

Hits At Death Row Made Him World Famous But He Left With Nothing

It’s been widely reported that Dre left N.W.A. without much money (Ruthless Records’ head Jerry Heller told Rolling Stone that Dr. Dre made $86,000 from the record label in 1992, at the height of the group). Partnering with notorious label head/manager Suge Knight, known for his underworld connection, Dr. Drew formed Death Row Records in 1991 and promptly released hip hop classics ‘The Chronic’ (which sold 5.2 million copies), and Snoop Dogg’s ‘Doggystyle’ (which has sold over 5.5 million copies). However, Dr. Dre’s profits from these records are unclear because he chose to leave Death Row Records in 1996 after an untenable relationship with his partner Knight. Although Dre was a 50/50 partner in the label, which sold 18 million records on artists such as Dre, Snoop Dogg, and Tupac Shakur - Dre chose to leave the label without taking a penny. "You can’t put a price on a peaceful state of mind” he said at the time.

Aftermath Records Was Phenomenally Successful

If Dre’s first experience as a label head with Death Row ended acrimoniously, his next experience as a label boss heading Interscope imprint ‘Aftermath Records’, was much more successful. The label got off to a slow start with Dre’s multi-artist compilation debut album, ‘The Aftermath’ his fortunes changed.

By 1999 Dr. Dre released his follow-up to The Chronic ‘2001,’ which sold 6 million copies. In 2001 Dr. Dre sold part of his share of Aftermath Records to Interscope Records for $52 million. Sales and royalties included proceeds from Mary J. Blige’s break-out smash, ‘Family Affair.’ In 2002 50 Cent was signed to a JV with Aftermath and Emnimen’s imprint Shady Records, and the first album to be released was ‘Get Rich Or Die Trying,’ featuring the Dre-produced hit single ‘In da Club’. The album sold 12 million copies. By now, the floundering Death Row Records was just a distant memory.

One Deal Changed Dr. Dre's Financial Future

Flush with cash, as turmoil in the music business swirled from streaming depleting revenue for songwriters and producers, Dre’s productions slowed down as he and the Interscope Records head explored other entrepreneurial ventures. Jimmy Iovine suggested Dr. Dre launch a sneaker brand that was popular with rappers at the time. Dre famously responded, “F**k sneakers, let’s do speakers.”

Beats Electronics LLC was formed in Santa Monica in 2006, specialising in headphones and speakers. In August 2010, mobile phone manufacturer HTC acquired a 50.1% majority share in Beats for $309 million. Beats headphones became a phenomenon, transforming the way people listened to music. By 2012 the company's revenues were at $1 Billion. In July 2012 HTC sold back half its stake in Beats for $150 million, making the company more attractive for other investors. However, on September 2013, HTC confirmed it would sell its remaining stake in Beats for $265 million.

Investment firm the Carlyle Group concurrently invested $500 million in the company. On May 8th, 2014 the Financial Times reported that Apple was in negotiations with Beats to purchase the company for $3.2 billion—the largest purchase in Apple's history. Dre and Iovine both earned a pre-tax profit from the deal of $750 million.

A Hit Movie and Painful Divorce

Dr. Dre has made the headlines for two widely different reasons in the last few years. In 2015 a musical bio-pic of NWA, “Straight Outta Compton,” the movie was released. It had a production budget of $28 million, but earned $60.2 million at the box office during its debut weekend and amassed a total of $201 million worldwide, according to Box Office Mojo. Although Dre’s take is unknown, it is fair to assume that after the movie’s success, he could claim to be one of hip-hop’s first billionaires.

That, however, was put into jeopardy when Dre’s wife of 24 years, Nicole Young filed for divorce. 18 months later, a settlement was reached for his former spouse to receive $100 million of his fortune. The settlement includes Nicole Young’s jewellery and four vehicles: a Rolls Royce, Range Rover, Escalade limousine, and Spyder motorcycle. Over the years, the couple had amassed a lot of valuable real estate in the LA area. As part of the settlement, Dre got to keep six vehicles and seven of the couple's properties. According to Rolling Stone, Dre was ‘delighted’ his ex-wife got to walk with just one-fifth of his liquid assets. Dre got to keep his valuable master recordings, trademarks, and interests in various partnerships and trusts. He also retained all Apple stocks, which includes proceeds from his sale of Beats by Dre.

Conclusion

Dr. Dre was one of the first examples of a hip-hop icon embraced by Silicon Valley and becoming a billionaire. The key to his fortune is his deal with Apple for Beats. While other hip-hop heavyweights such as P. Diddy and Jay-Z can also claim billionaire status, their wealth is amassed from a disparate consortium of business ventures.

If Dr. Dre's net worth took a hit due to his divorce, it looks like it is set to rebound dramatically. Recent reports indicate that Dre is about to sell his music catalog for $200 million to Universal Music and Shamrock. It will ensure that long after he stops making music, there’s no chance that anyone will forget about Dre.