Two of Cash Money's biggest stars are leaving the record label, forcing Birdman to assess his strategy and ethics.
|Nov 2, 2018||Public post|
Lil’ Wayne, Nicki Minaj, and Drake at the 2017 Billboard Awards (via Kevin Mazur, Getty Images)
Cash Money Records is facing one of its biggest crossroads yet. After years of financial disputes, album delays, and legal drama, Drake and Lil’ Wayne have finally fulfilled their obligations to Birdman, the co-founder and CEO of Cash Money. Their inevitable departure leaves a gaping hole in a lineup that was once filled with megastars, XXL Freshman Class members, and everyone in between. With only Nicki Minaj and R&B singer Jacquees to rely on, Birdman has to go back to the drawing board.
Birdman AKA Baby AKA “#1 Stunna” started the record label with his brother Slim to escape from the streets. Cash Money’s goal was to create opportunities for themselves and the next generation—especially young Black men growing up in the projects. It’s why he signed a 15-year old Lil’ Wayne, a 17-year old Tyga, and just signed 17-year old GloKKNine three months ago.
While Cash Money has launched numerous rap careers, it has also kept artists in a problematic dependency cycle. The label finds budding rappers, sells them on Cash Money’s pedigree but refuses to pay many of them unless legal action is taken. It’s an exploitative business model that keeps the Birdman’s pockets fat at the expense of his business partners.
Now that Drake and Lil’ Wayne are gone, the future is uncertain. Any business that loses multiple cash cows needs to revisit its strategy. The uncertainty places yet another magnifying glass on Cash Money’s immoral business practices. When called into question for his ethics, Birdman rarely caves to social pressure. But now that the financial pressure is on, will he do something about it?
“When the party’s over we should be about 60 years old with $100 million, drunk, and chillin’ with our children.” - Birdman, 1998
When strengths become weaknesses
One of Cash Money’s tenets is its ability to make deals. Back in 1998, the label signed an epic $30 million distribution deal with Universal. Cash Money and its business partners held their cards close and negotiated the deal of a lifetime. At a time when most independent labels were lucky to get a 50/50 split on distribution deals, Cash Money got a remarkable 80% Cash Money / 20% Universal profit split. The three-year deal also included a $2 million annual advance, 85% share of royalties, and Cash Money kept all their masters. It was hip-hop’s Louisiana Purchase.
“I refused to give them anything,” said Birdman. “I can’t let nobody take nothing we work for. If they get something, it’s gonna have to be something we accomplish together.”
That quote was specific to the Universal deal, but Birdman has carried this same mentality with the artists he signed and the people he’s worked with. The same ruthless dealmaking skills that made him rich have wreaked havoc on dozens of rap careers. He famously told music industry veteran Wendy Day—who made Birdman rich from the Universal deal—to “sue me, when I have to pay you, you’ll get paid.” When Cash Money bested Universal, it was victorious. But when Cash Money bests its own people, it’s predatory.
In many cases, the artists were too inexperienced to push back. Former Cash Money artist Tyga, who is suing the label for $10 million, signed a deal when he was 17 that gave him a lawyer who also represented Cash Money. It was a conflict of interest designed to limit the “Rack City” rapper’s power.
And that’s just one story. The rap sheet on Cash Money’s disputes with rappers is longer than a CVS receipt. Unfortunately, Birdman’s business prowess still gets plenty of love. He’s celebrated annually in the Forbes’ Hip-Hop Cash Kings list. Four years ago, Russell Simmons called Cash Money, “the best company in the history of hip-hop.”
Cash Money has been an incredibly influential label with problematic practices. Both statements can be true, but the nuance can easily get lost—much to Birdman’s benefit. But now that the label is at a turning point, change might be unavoidable.
Lil’ Wayne and Birdman, back in the “Like Father, Like Son” era. (via Complex)
The challenge with cash cows
Drake’s Scorpion and Wayne’s Tha Carter V had the first and third highest opening week album sales of 2018, respectively. History is not kind to hip-hop record labels when their flagship artists part ways or run their course. Death Row Records was never the same after Tupac Shakur. Murder Inc. faded when Ja Rule and Ashanti stopped selling records. Even Derrty ENT, despite putting St. Louis on the map, couldn’t outlast Nelly’s forgettable Sweat/Suit double album.
Record label success is predicated on rising stars that mature into cash cows. These stable artists are like core business units that provide security and allow a company to explore new ideas. But like other businesses, cash cows can preclude a company from pursuing ideas that are in its best interest. Here’s an excerpt from Business Insider on the “cash cow disease”:
“When you have a cash cow, you lose the discipline of having to make a good product and pay attention to your customers. Sure, Google and Microsoft can hire the smartest minds in the business -- but cash cow disease keeps that brainpower derailed into projects that don't have to stand the test of the marketplace.”
For Cash Money, the success of Drake, Wayne, and Nicki in the early 2010s made it easier for other “projects”—like Tyga’s career—to get neglected. It also paved the way for Cash Money’s laughable long-shot deals—like signing rock group Limp Bizkit in 2012 and reality star Paris Hilton in 2013. Would Birdman have taken a risk on these “MTV Spring Break”-era acts without bankable stars to lean on? Probably not.
Without the Young Money Militia frontmen, Birdman and Slim are now forced to apply discipline that they haven’t needed to do since the 90s. They need to learn how business is run in the streaming era, which the label didn’t understand the full benefits of according to a 2016 interview with Lil’ Wayne’s manager Cortez Bryant.
Drake’s massive success offered Cash Money the luxury of not worrying about its streaming strategy. The “Mob Ties” rapper breaks streaming records effortlessly with each release. Without Drake, who has a Walmart-Procter & Gamble type relationship with the streaming companies, Cash Money will now face the same pressure that other labels do to claim prime real estate on playlists and exposure across all platforms.
The cashmoney-records.com front page is still pushing Drake’s Views… which came out April 2016! What’s are we doing here?
What the future could look like
From an outsider’s perspective, Cash Money Records current strategy has three objectives: expand its footprint with moves like Cash Money West, develop rising stars like Jacquees (who has already pledged lifelong allegiance to the label), and still profit off its Young Money Entertainment artists like Nicki Minaj. It’s a fairly pragmatic approach but won’t offset the loss of Drake and Wayne.
First, Cash Money West should be focused elsewhere. Tyga is the only recent west coast Cash Money artist that has attained any mainstream success. Why would a rising star from Compton join “CMW” before trying to get in with Top Dawg Entertainment, YG’s 4Hunnid label, Nipsey Hussle’s All Money In, or another label that is closer to the action?
A targeted expansion would be more successful in Miami, where Cash Money is currently headquartered. South Florida is home to four of the 10 XXL 2018 Freshman Class members. Their success has likely influenced a number of SoundCloud rappers in the area to follow in their footsteps. The regional hip-hop scene has less mainstream attention since Miami native Rick Ross is pursuing other business interests. There’s plenty of talent and opportunity in Cash Money’s own backyard.
The harder and more critical goal is repairing Cash Money’s brand image. Birdman clearly cares more about this than he lets on. That’s why he confronted Charlamagne Tha God on The Breakfast Club. That’s why he executive produced a Cash Money documentary to present the label in a positive light. Birdman wants redemption without the humility needed to reap the benefits.
Ironically, Drake has shown how redemptions are done. This summer he brought out former foes Chris Brown and Meek Mill to perform alongside him on stage during his concerts. It showed that all the past beef is now water under the bridge.
Birdman should take a page from that book and launch a Cash Money redemption music festival in New Orleans. He should invite all the artists he’s had ever had disputes with to perform. And yes, it should be a festival, not a concert. He’s had issues with enough artists to fill a day’s lineup at Bonnaroo.
Birdman can release a simple promo video that says, “I know I haven’t always been right by my artists, but I’ve learned a lot. I want to invite every past artist that made our label one of the most influential in hip-hop history. Come join us.” The ‘apology festival’ would generate buzz, bring in millions, and help improve Cash Money’s poor brand image.
For the past twenty years, the success of Juvenile, Lil’ Wayne, Drake, and Nicki Minaj has overpowered the criticism that Cash Money has received. Now more than ever, redemption is necessary for the label to prove it can outlast its stars and convince any artist with star potential to join Birdman and Slim. The odds are clearly stacked against them, but they have no other choice.
But even if Cash Money ran a lucrative, brand-reviving, image-lifting ‘redemption’ music festival, are we sure the artists would even get paid?
If you enjoyed this story, forward to your friends and tell them to sign up for the newsletter!
Trapital is written by Dan Runcie. Contact me at email@example.com