How the rapper found the balance between authenticity and enterprise, exclusivity and accessibility, gangster and CEO

From the February 2010 “People Who Matter” issue — on sale soon

Jay-Z walks into a gracious chamber at Manhattan’s Plaza Hotel. It’s the same room where, thousands of years ago, crown moldings were born. He walks in and already waiting for him is a tight litter of reporters with their recording de-vices and their notebooks. This is the sort of intimate press thing where the celebrity talks about whatever product he is endorsing, and they serve cold sandwiches and hummus dip. The product today is DJ Hero, a video game with which un-urban kids and guys in their mid-thirties with Costco memberships can scratch Jay-Z’s beats from the suburbanness of their own homes.

He sits down in his hard-backed chair and the reporters collect around him in a buttery little square. But Jay-Z doesn’t really sit. What he actually does is slalom down in his chair, real low like it’s a water slide. Seventy-three inches of all-black everything, laid out like a ramp. Black sunglasses, too, to block the hotel light.

“Hey, fuck shit,” he says, and he smiles so the whole room laughs.

He’s cool and tall and black. He’s witty and very cocky, but the cockiness is the unannoying kind you might admire.

He speaks differently, more warmly, to women than to men. He might be winking but you can never tell behind the sunglasses. At forty, he’s learned how to adjust for his audience, while the audience only notices that he’s pretty cool, and even kind of like them. An un-urban white guy says, “Oh, word,” after Jay-Z sublimely answers his question about an old-school gaming console. When Jay-Z charmingly says he’s so good at the game that he would destroy a female reporter at it, she laughs for too long.

A few years ago, President Clinton did the same thing. Jay was in the president’s ear at the Spotted Pig, the Manhattan restaurant he co-owns, and the president was doubled over, holding his belly, southern breathless, saying, “Stop. Stop it. You’re killing me!”

What’s different here is that Jay-Z is not Bruce Springsteen. Jay-Z is a half-dangerous rapper who grew up in the gat-happy projects of the Bedford-Stuyvesant section of Brooklyn. He sold crack on feral corners and shot his brother for stealing his ring. Badass, for real. So it’s a little weird, isn’t it, that he can make reporters and presidents alike giggle?

Two days from now, Jay-Z will perform the new New York anthem “Empire State of Mind” before a sellout crowd at Yankee Stadium. He will join U2 onstage in Berlin and get introduced by Bono to German screams as “the mayor of New York City.”

The very next morning, back in New York, Jay-Z will be introduced by the real mayor of New York as a “great New Yorker” to New York screams at the ticker-tape parade, before performing his anthem and riding atop one of the Yankees’ floats.

That same night, Jay-Z will enjoy an early dinner with A-Rod at Manhattan restaurant Nello’s before Maybaching down to Madison Square Garden to watch good friend and fellow superstar LeBron James crush the New York Knicks.

Around this time, the embattled governor of New York will call a reporter to confirm that Jay-Z has indeed been an inspiration during his recent rough patch. Governor Paterson says, “Jay tells me, ‘I’ve got your back.’ “

But it’s the other thing the governor brings up that’s more interesting. Paterson says that every time he sees a Yankee hat, he thinks it’s Jay, “because he understands branding. I would daresay there are few people who understand it better.”

Ah, branding! It’s how you make a product so dearly iconic that people say the brand name when they mean the item itself, like “Kleenex” for “tissue.” And Jay-Z, here at the rich old Plaza Hotel dressed darkly and sitting horizontally, understands it really well. In fact, he understands it so damn well that he’s doing it differently than anyone ever has before, which is making him more famous than any hip-hop artist ever, and making him more money, too. But it’s the unintentional part of what he’s doing that’s changing America forever.

It wasn’t always like this, the rapper mogul sitting at the conference-colored table, imprinting his brand upon the masses. In his first office, when he was hooked up with thirsty, stop-at-nothing Harlem manager Damon Dash — the sort of man who tells you how hot his hot new things are until you either believe him or convince him that you do — roaches dog-paddled in the water cooler. They paid for everything in cash, rolls of fives and tens. It was amateur hour at the gangland Apollo. Unprofessional as hell but gangster slick. During one show Jay-Z tossed stacks of bills into the crowd.

But four years ago, Dash went the way of those bills. And now, today, on the amber floor of Jay’s clothing line, Rocawear, the lack of gangster is glaring. Lots of pretty black females padding around on high heels, professionally greeting visitors, professionally lauding their boss. This is corporate, carpeted America, bright and federated, a glass warren of office spaces with several small but cool concept showrooms and gallons of clear, roachless water.

Look up, left, and listen. Jay-Z’s vamping scowl is paraded everywhere, his presence vibrates from sound systems and is woven into the fabrics. You can smell Jay-Z in the rich notes of his new fragrance. A few blocks away, the CEO of the New Jersey Nets (of which Jay-Z owns a small stake) says he asks him for advice on how to better appeal to VIPs. More high-end stuff! says Jay. What kind? you ask the CEO. Just high-end stuff! he says. There is a hotel line with Jay’s name on it in the works. There are meetings about signing new talent, designing more shoes.

What Jay-Z actually does in those meetings is mythical, and irrelevant. Because what matters most deeply to every colleague, partner, and acolyte is the gift of saying that Jay-Z helped them arrive at a look, a sound, a smell, a decision. The jewel Jay-Z brings to every boardroom — the shining VVS diamond — is his name, his brand, his Jay-Z-ness, the glory of which is as unspecific as it is iconic.

Outside of the music and advertising industries, not many people know of the guy who cut and set the Jay-Z jewel. Damon Dash, in fact, is far better known. But you utter this other name in the music or ad worlds and there’s a queer little nod, an “Oh, yeah, Steve Stoute.” Not the fox that was spotted in the chicken coop, but the slippery one that picked the latch.

Short and bald with a body type that plugs his surname, Steve Stoute is the underfamous but ubiquitous guy in all the celebrity pictures. Steve Stoute and Jay-Z. Steve Stoute and P. Diddy. Steve Stoute and Mary J. Blige. Steve Stoute and Jay-Z again. Cock your head, wink, reach up and wrap your arm around your moneymaker, and … cheese!

He’s black and also liquid-shiny like the mimetic shape-shifting bad guy in Terminator 2. He’s real deal-eyed, and what first comes off as arrogance you realize later is sentience, with an extra side of arrogance. He’s wily as hell, plus hyper-protective and defensive of his products, both intellectual and carbon-based.

A former executive at Sony, where he first met Jay-Z over a game of Madden, Stoute eventually slithered over to the advertising world and worked his way up the ranks, learning how to sell street gear to white America. Authenticity is Stoute’s psalm. It is a religion that he sells best and preaches savagely. He knows that’s how you make it big in white corporate America without getting ripped for being a total sellout in the hood. I’ll take this money, I’ll shill Budweiser, but only because I always drank Budweiser.

“Jay-Z is the CEO of authenticity,” proclaims Stoute, who himself was willed an epithet by BusinessWeek — the McKinsey of Pop Culture. “Jay,” he says intensely, “was saying no to things he didn’t believe in when he first started, when he had no money. He never changed himself.”

But just as much as Stoute can lecture companies on how they can attract black and Latino consumers, he can also school black and Latino artists on how to appeal to corporate America. He is the swami of the crossover illusion — helping minority artists maintain their edge, their authenticity, while ensuring they appear unthreatening to the tennis-and-linen set.

Stoute’s worldview is both oracular and pretend color-blind. He talks a lot about the “tanning of America.” He means all those demographic boxes of black and white and Latino and eighteen to thirty-four, how the country has always been conveniently but ignorantly grouped by age and color into those debilitating provincial boxes, with no attention paid to the like mind-sets that bleed across them — the so-called tanning.

His bag is pairing hot musicians with the brands he claims make sense for them: Beyoncé for Tommy Hilfiger’s True Star fragrance, Chris Brown for Wrigley’s Doublemint gum. Stoute’s the guy responsible for taking a mediocre Justin Timberlake song and iconicizing it into the “I’m Lovin’ It” campaign.

But perhaps Stoute’s greatest success is the one that really tucked him and Jay in together: Reebok. Which was also Jay-Z’s first real endorsement gig, and his own line within a bigger line — the S. Carter collection. He and 50 Cent, rapping in loud shirts, selling a sneaker that hadn’t enjoyed any cultural relevance since the 1980s. It was Jay’s idea to get 50 in there but Stoute’s idea to make Reebok an urban brand. Why did Jay do Reebok and not Nike? Because, you see, the swami was hired by Reebok, and the swami had spoken. “It wasn’t ‘Jigga and Nike,’ because Jay-Z and I have a relationship that’s really strong,” he told a reporter at the time.

Like an endorsement-gathering snowball tumbling down the great white slopes, that relationship grew bigger and stronger with each partnership. Next came the HP campaign, in which Jay-Z is presented as the CEO of hip-hop, in which he is charming, funny, suited, and tie-clipped, discussing how he uses the computer to make his music, to manage his tour, his investments, the Nets stadium blueprints. He is powerful and iconic and corporate and safe — and he is headless, appearing from just the well-appointed neck down.

Then Budweiser, Heineken. Recently DJ Hero, Jaguar. Along the way, Damon Dash’s influence began to wave its tired arms from a lifeboat somewhere off the coast of Jay-Zion. And with each deal, another rough edge of Jay’s raw diamond was sanded down, as with each endorsement and appearance he was being furtively but surely groomed into a mainstream brand even a president could love. (Stoute likes telling the story of when Obama called Jay early in the presidential campaign and asked him what’s going on in America.)

Today, according to executives in the music industry and a sulky Dash, Stoute is pretty much involved in every aspect of Jay’s business. “Stoute was one of the first to realize that [African-Americans] had to diversify,” says one high-level executive familiar with the relationship. “And he’s taught that to Jay and is showing him how to stretch it across the spectrum of his brand.”

He has also taught Jay that friends invest in their friends. Together, they have founded and funded Stoute’s baby, Translation Advertising.

A little more on the sycophantic side, and like all Jay’s colleagues, Stoute loves relating stories about Jay’s insightful ideas. Stoute says that Jay, in his role as chief ideation officer at Translation, came up with some strategies for Johnson & Johnson. Baby oil, Jay suggested, should be marketed for its other uses, to remove makeup or to mix with suntan lotion so it glides on smoother. Those are its outside-the-box applications, and Jay-Z, with Stoute highlighting the blueprint, has learned to translate the niche into the mainstream.

And thickly those blueprints paper the walls of Jay-Z’s world. When asked how he approached Jay about starting up Translation Advertising, Stoute says that they’ve known each other for fourteen years and they’ve done a lot of things together. So, he says, a little irately, “It wasn’t an approach. It was just, ‘This is what we’re doing.’ “

Inside a large and empty belly of a building in the TriBeCa neighborhood of New York, Damon Dash roosts and inflates. These are his new offices and he’s barely moved in, but his aspirations seem to have leased this space forever. There is something of an art gallery on the first floor and a control center of video and audio on the second floor, with projection screens projecting budding talent on the blank walls before you. Lap-topping on a beanbag chair in one of Dash’s nuclei of work spaces is Curren$y, one of Dash’s hot new things, his wrist moored by a five-hundred-pound Tiret watch, one of Dash’s hot new accessories. Dash brands, too, but more brazenly.

“I’m indie, and Jay went corporate.” Dash says this so many times in the space of an evening that it’s likely what he employs at bedtime instead of counting sheep.

He is a whole human skinnier than he was in his Jay days. But even as he’s leading you through the office, he passes some sort of confusing fritter on a table, doubles back, palms it, and demystifies it all the way down to his intestines.

Here, in one of his most special idea rooms, after you’ve listened to several hours of the new things he’s working on that are bigger and better than anything or anyone (read: Jay-Z) that he’s managed before, he will get unstoppably reflective. He settles deeper into his own beanbag. A campfire flickers in his widowed eyes. Time to tell the story about the day he knew he’d lost Jay-Z:

It was about the time Jay had been offered the CEO gig at music label Def Jam, a job that Dash thought should rightfully have been his. Nonetheless, they were still partners in Rocawear, which was successful and growing. But their relationship had lately Paris-and-Nicoled. They were no longer congenital, “two brothers in the afterlife,” as they’d once been tagged by other close friends. But they were still on the same page in the business. Says Dash, “It was me and Jay and the two Russians voting on every decision, and I controlled the vote, because I always had Jay’s vote.” The two Russians were Alex Bize and Norton Cher, old-school clothing slingers from Manhattan’s garment district who ran the day-to-day operations.

“But one day,” Dash says, “they brought me to a hotel.” He takes his time with the story, replays it daintily. It’s clear that reliving the scene is as painful as it is ebulliently cathartic. “I said, ‘Why are we meeting at a hotel?’ and it was because they didn’t want anyone to hear me yelling. That was the day they told me they didn’t want [celebrity photographer] Mario Testino to shoot the ads.” Instead, they were going with someone cheaper, and they were going in a different direction altogether.”Here the Russians were telling me how to cater to my people! I wanted [Rocawear] to be sold at Bergdorf Goodman’s, not Dr. Jay’s!” says Dash.

“In the end, Steve Stoute was making money off them. Jay stopped listening to me and started listening to him.” Shortly thereafter, Jay-Z made their separation formal when he bought out Dash’s stake in Rocawear for $30 million. Dash shakes his animated bobblehead at all of it. It just doesn’t make sense — Jay trashed Rocawear, their baby.

Dash has a point. Despite Jay-Z’s pub-lic exhortations that Rocawear is a luxury line that belongs in the same mass-market luxury league as Ralph Lauren or Calvin Klein, it limps synthetically off Macy’s racks and headlines discount urban shops like Dr. Jay’s and Against All Odds. Pick up a couple shirts, you’ll notice the stitching looks cheap, the graphics are undercool. They similarly besmirched the Artful Dodger brand, which Rocawear acquired for $15 million in cash in 2007. Once known for its uniquely British street sense and rich details, Artful Dodger’s look changed when chief designer Scott Langton left soon after Jay became his boss, because, as he tells it, “I wanted to do something more tailored, more luxury, more classic, less … throwaway.”

But there is a brilliance underfoot that Dash is either not keen enough or too jealous to envision. See, it’s no accident that Jay-Z is marketing his clothing brand as luxury and then selling it on the cheap. What it is is a magnificent business decision: Rocawear brings in $650 million annually. And when Jay sold it to Iconix, the company that distributes Candies and Rampage, in 2007, he swaggered away with $204 million. Dash missed out on that fritter and lost some weight.

Effectively, Jay-Z has made a fortune by telling people who buy Rocawear that they can have it all. This is a supercool, exclusive T-shirt. Jay-Z wears it to bed with Beyoncé. It should sell for eighty dollars. But here, son, you can take it for twenty dollars. And millions of sons take it for twenty dollars because Jay-Z wears it, because Jay-Z says it’s a tuxedo even if it looks and feels more like one of those tuxedo T-shirts.

This coexisting as two things at once — luxury yet cheap, exclusive yet accessible, edgy yet mainstream — is Jay-Z in a nutshell: the gangster from the hood and the CEO in the boardroom. It is how Jay-Z has transformed himself from just another rapper with a gat to a celebrity-mogul-angel who hums advice into the loving ears of sitting governors and presidents.

It’s Jay-Z alone who owns that power in hip-hop; 50 Cent or Nas would not look good at President Clinton’s ear. If one of them had walked into that chamber at the Plaza and said, “Hey, fuck shit,” the laughter that reverberated off the golden tassels would not have rung so loud and so careless. It would have dribbled out a little bit nervously, more like an accidental peeing in one’s pants than a sure and expected stream. 50 Cent, with his infamous “How to Rob” single — which details exactly how he is going to rip off and/or assault every successful person in his path — is a little freaking scary.

But then ask any of Jay-Z’s fans what they like about him and the first thing they will tell you is that he didn’t sell out, because they feel a little uncool for liking someone who’s so huge. They don’t think Jay-Z sold out because he and Stoute have expertly eased his brand into Big Lot America, and even though he games with Don Shula in a Budweiser spot, here he also appears in his “Run This Town” video, thugged out in a black gladiator underworld of which he is patently the dark lord. But now remove these undone Timberlands and add a pair of Louis Vuitton yacht shoes and look again — the Jay-Z Transformer doll! — he just as easily morphs back into the boardroom cutout, the Cannes weekender.

If you look for them, Jay’s world is lousy with these two-faced examples: He waged a war against Oasis’s Noel Gallagher after the latter said a hip-hop artist had no business headlining the traditional rock festival Glastonbury. But soon after Jay-Z publicly mocked him onstage, he said he would collaborate with Gallagher. Or how about when Jay “spoke out” against Kanye West’s anti — Taylor Swift, pro-Beyoncé outburst during the VMAs, gently admitting it was “rude,” but then in the same sentence he defended that rudeness as passion. Appeasing the Taylor Swift crowd with an “apology” whilst simultaneously branding his line-crossing friend as a passionate soul. Politically foxy! Then listen to his “Death of Auto-Tune” single, in which he lambastes artists for using the pitch changer to hide their inability to sing, and yet the song is on an album largely produced by the king of Auto-Tune, Kanye.

But wait. Here is a subtler scene and yet a more carnal example: Back during the 2008 primaries, Ken Friedman, the primary owner of the Spotted Pig, had a big dilemma. Chelsea Clinton had come from her apartment down the street and said her mom wanted to do a fundraiser at the Pig, a sort of town-hall meeting. Awesome, thought Friedman. He said, Yeah, of course. But then a few days later Obama’s people called, said they also wanted to do a benefit at the Pig.

“I spent four days agonizing,” he says. “Then I e-mailed Jay: Who should we choose?”

Jay said, “How do you feel?” And Friedman told him, “Well, I like them both.” Jay said, “I like them both, too. You don’t have to choose.” His answer, a fortune-cookie slip from an oracle: “Do both.”

There’s a gorgeous genius in the magnanimity. Jay had already flopped to the Obama team, but he was still a little in bed with the Clintons. A big part of being authentic is being open and large enough to keep your tailbone at the dinner table and your eyes on the television in the next room, unapologetic and charming in your duality. Yes, I’m watching the game, but God I love your lamb!

Jay-Z’s duality has been purposeful.
It has been as plotted as a graph. If you think that to live so doubly is disingenuous, then you may feel hoodwinked. But like penicillin out of blighted bread, there is a greater good.

Back at the authenticity plant, Stoute is not only defending his and Jay-Z’s work but indeed celebrating its quiet upheaval.

“African-Americans were very rarely considered pop culture,” he says from behind one of his color-blind podiums. “When Whitney became pop, she did a lot of things that were not necessarily her. Look at her first album” — she looks like an African goddess — “versus her second” — a black Olivia Newton-John — “and you’ll see what she did. Michael Jackson, same thing. He put Jheri curls in his hair. Those were the things they had to do to be loved by the masses.”

But Jay-Z didn’t do anything but keep being himself, he says. “The masses came to him.”

Someone who was not trying so rabidly to enforce the law of authenticity might be more accurate in saying that those masses came to a side B of him. Unquestionably, Stoute heaps large loads.

But there is a deeper significance — a racial philanthropy — that perhaps neither man intended. Jay-Z is black black. He is old-school double-dark-chocolate-chunk black. He is black the way Labatt is blue. He is not white black, Barack black, like our president. Or the kind of black that doesn’t curse and deplores the n-word, the genteel black, like Oprah. He is, arguably, the first black-black guy to cross over into Oprah-land and Bill Clintonworld without making the Oprah-sized no-look-back forward flip that means you’re selling not necessarily your soul but perhaps something fleshier, a little more external.

This late-October evening, high up in the heavens of the Dunkin’ Donuts Center in Providence, two clocks — one to the west and one to the east — are set at the ten-minute mark, counting down to the moment when the man who has branded himself as an authentically black god will deck the stage.

The lights, heralding his presence like a thrilling circus, are not the lights one might associate with rap music. They are not dark and pulsing but bright like Barnum & Bailey sunshine, and frequently they drench the whole audience in auroral exposure so the faces of his fans are on vivid display. And the colors of those faces! The crowd is white and black and Latino and other, its measurements are nearly 33, 33, 33, and 1 percent.

There is a brass band backing Jay-Z. There is bar-mitzvah-flavored audience participation. There are children with their parents, and there are older kids smoking joints. There are ironies nearly as dramatic as the distance between Bed-Stuy and Fifth Avenue. The inky, rogue heart of hip-hop is bleeding somewhere out in Brooklyn, but here in Providence, white guys in Timberlands are passing peace pipes to black kids in Lacoste, and everyone’s enjoying the show.

Jay-Z thanks both the east and the west sides of the audience for coming. He smiles a lot and self-congratulates. “That shit was aight,” he says after a song, and doggedly his sunglasses block the darkness.-Esquire