Jon Bon Jovi: Still Rockin’ — And Making A Killing
Forbes, 05.18.11
Over the past 12 months, Bon Jovi earned more than Justin Bieber, Kanye West and Katy Perry — combined. How did that happen?

The next time you play Rock Band, don’t invite Jon Bon Jovi. The 49- year-old singer’s wife and kids recently convinced him to give the popular videogame a try. So he picked up the microphone and launched into a rendition of his classic “Wanted Dead or Alive,” backed by family on virtual guitars and drums. He never made it through the song.

“I failed–it buzzed me down,” Bon Jovi admits over lunch in Manhattan. “So I stood up off the couch and I said, ‘All right, goddamn it, press play.’ They did it again, I failed again, and I said, ‘Everybody’s going to bed. That’s the end of this. Turn that shit off.’”

Fortunately for Bon Jovi, audiences in real arenas around the world are kinder. His eponymous band took home $125 million over the past 12 months by FORBES’ estimates, more than any other music act besides U2–and more than relative whippersnappers Justin Bieber, Katy Perry and Kanye West combined. In the past year the band has played 74 gigs in 15 nations, grossing $203 million in ticket sales and $20 million in merchandise; Bon Jovi ranks No. 8 on this year’s Celebrity 100.

In Pictures: The Celebrity 100

Surprised? Bon Jovi out-earns younger, glitzier acts thanks to a relatively affluent, aging fan base who turn out to hear the ballads of their youth and see a tightly run touring machine built on decades of experience.

“They’re one of the highest-grossing bands every year,” says veteran concert promoter Ron Delsener. “Jon is a workaholic, constantly touring, constantly making loads of money.”

Whereas Lady Gaga schleps dozens of dancers from town to town and needs 28 trucks to cart her equipment, Bon Jovi typically plays with six people. A dozen trucks carry the gear, including a circular stage and 192 double-sided LED video screens connected with a specially designed motion control system, which allows them to come together to form a screen 13 feet high and 40 feet wide. At arenas like Montreal’s 21,500-capacity Bell Center, the in-theround setup lets the band sell up to 5,500 more tickets than a traditional arena stage would. Wherever possible Bon Jovi plays consecutive nights at the same venue to cut back on setup and strike costs. By playing 12 shows in 19 days at London’s O2 arena the band saved $300,000.

“It wasn’t some conscious decision to be penny-pinching. I think it’s just wise to be efficient,” says Bon Jovi. “I know big bands where each of them has personal assistants on the road, each of them has a security guard. We don’t have a security guard. Take your own friggin’ bags!”

On the revenue side the band’s U.S. fans sport an average household income of $78,989, slightly higher than the mean for the 350 music groups tracked by research firm NPD’s Brand Link database. The economic difference between Bon Jovi’s fans and those of, say, Justin Bieber ($71,389) or Metallica ($71,089) is more than enough to cover a pricey special like the Crush Package, which comes with a grab bag of perks and tchotchkes, including souvenir lanyards, autographed lithographs and two front-row seats that you can fold up and take home after the show. The average cost for this VIP treatment is $2,550 per couple; lowend alternatives set you back $450. Bon Jovi sells an average of 600 individual special package tickets per arena show.

Though regular tickets start at $20, these packages push Bon Jovi’s average price to $95, about 50% higher than acts like the Dave Matthews Band ($59) and the Black Eyed Peas ($63). Bon Jovi shows have up to 20 different price points, including special packages; on a recent tour AC/DC offered only one.

Secret Agent

The battle over public pensions has recently led to walkouts, sleep-ins, tax hikes and layoffs of public employees as communities grapple with grim financial realities–including at least a $1.26 trillion shortfall in funds to pay for promised benefits (see “Mind the Gap”). One guy who doesn’t seem to be suffering is Glen Rodger Sergeon Jr.

Sergeon is a placement agent. His job is to convince officials at state and local pension funds to hand over slices of their $2.3 trillion in assets to his clients, who seek to manage them for a fee. In 2008 and 2009 Sergeon lined up such work with the $14.6 billion (assets) Kentucky Retirement System on behalf of seven money managers. One that paid Sergeon’s firm over $2 million was the Arrowhawk Durable Alpha Fund–an outfit that couldn’t have won over public officials with its track record because it was brand-new. Another startup, Crestview Partners II, paid Sergeon’s company $1.1 million.

Sergeon, contacted by phone, politely declared, “I don’t talk to reporters,” and hung up.

Such brush-offs are unlikely to end the questions about the $6 million that money managers paid Sergeon for lining up business with Kentucky’s pension fund. The figure represents nearly half the $13 million that investment funds paid placement agents for landing business with Kentucky between 2004 and 2009, according to a Kentucky auditor’s report released last summer.

Just what forms of persuasion Sergeon and the other agents apply has become a hot topic lately. Placement agents are used at one time or another by more than 90% of public funds, according to Edward Siedle, a former Securities & Exchange Commission attorney who runs Benchmark Financial Services (and contributes to Forbes.com) in Ocean Ridge, Fla.

Agents say they provide valuable screening for public funds that lack the resources to do the job. Critics charge they’re glorified bagmen in a pay-to-play world in which public officials hand assets to money managers willing to contribute to their political campaigns or otherwise enrich them.

“Regulators and law enforcement around the country have concluded that many arrangements involving placement agents and public funds amount to little more than influence peddling,” says Siedle.

Evidence of such activity has led to criminal convictions and new restrictions on placement agents. Yet the game goes on. In Kentucky, where no one has been accused of wrongdoing, even the state fund’s trustees were apparently kept in the dark for years about the $13 million in placement agent payments until last year’s release of the state auditor’s report. In typical fashion, Kentucky’s nine trustees are a mix of employee representatives–whose primary focus is benefits rather than investments–and political appointees. For several years, in fact, only one trustee, Christopher Tobe, had a background in investments.

In April the Kentucky board fired longtime director Michael Burnside amid concerns that he’d withheld information on placement agents from trustees. The state attorney general determined around the same time that Burnside had violated open-records laws by refusing to divulge staff salaries. Burnside did not respond to requests for comment. The SEC, meanwhile, has inquired into Kentucky’s use of placement agents, and the state auditor has launched a new investigation.

“Public pensions need placement agents like dogs need ticks,” says Kentucky trustee Tobe. “There’s no reason to pay agents when fund managers have their own salespeople anyway.”

Officials in a number of states appear to agree. California began in January requiring placement agents to register as lobbyists, attend ethics training and forsake finder’s fees from money managers–a move that has prompted some to declare they’ll leave the state. California’s move follows a scandal in which former directors of the $231 billion (assets) California Public Employees’ Retirement System earned $125 million as placement agents. They did so in part by enriching public officials with under-the-table payments, jobs, a Lake Tahoe condo and by hosting a wedding, a Calpers report states. Some former directors have denied wrongdoing.

New Mexico’s fund is the subject of SEC and FBI pay-to-play probes. State officials are seeking to recover potentially tens of millions of dollars lost to kickback schemes. In Illinois the Teachers’ Retirement System banned placement agents after three middlemen pleaded guilty in an extortion scheme that steered money from investment managers to public officials.

New York State banned placement agents in 2009 after then attorney general Andrew Cuomo discovered them arranging for money managers to receive state work in exchange for bribes to politicians. The case resulted in $170 million in fines and eight criminal guilty pleas. In April former pension boss and state comptroller Alan Hevesi was sentenced to one to four years in prison for accepting $1 million in gifts for committing $250 million to Markstone Capital Partners, LP.

“Gifts, favors and campaign contributions are not a legitimate basis for government contracts,” Cuomo said. “Lobbyists whose stock-in-trade is pay-to-play have no business appearing before government.”

The ability of agents like Sergeon to continue operating says a lot about the porous nature of the pay-to-play crackdown. A New Yorker who lives in a penthouse apartment on Greenwich Village’s Bleecker Street, Sergeon appears to have entered the securities business around 1990 via Citibank, where he met H. Carl McCall. After McCall was elected state comptroller three years later, he appointed Sergeon as a trustee of the New York State Teachers’ Retirement System. Sergeon later moved to Merrill Lynch, where he sold investment products to pension funds.

McCall, Hevesi’s immediate predecessor as comptroller, had his own political career derailed in part by a controversy in which he was accused of using his oversight of the state pension fund to solicit campaign contributions and jobs for friends and relatives. Following an election defeat McCall set up his own firm, Convent Capital, in 2005 and began doing business with the state. A spokesman for McCall tells FORBES that the firm “is not a placement agency and [McCall] has not served as a placement agent.”

Diamond Edge Capital Partners is another firm that was paid–$6.8 million–by money managers for lining up work with New York. In 2008 Sergeon joined Diamond Edge, where he teamed up with Marvin Rosen, a company partner and the former Bill Clinton fundraiser who arranged Lincoln Bedroom sleepovers for big donors. Later that year Sergeon landed Diamond Edge its first business with Kentucky.

Sergeon himself appears to have segued into the state via Adam Tosh. The two formerly had done business together when Sergeon was a Merrill salesman and Tosh an investment staffer at the Pennsylvania State Employees Retirement System. Tosh left his state job for MDL Capital, a minority-owned money management firm whose principal, Mark D. Lay, was sentenced in 2008 to 12 years in prison for his role in an investment scam. Tosh, who now works at investment advisory Rogerscasey, did not respond to requests for comment. He has previously stated that Lay’s crimes occurred prior to his own arrival at MDL. Tosh has also said that in Kentucky he relied on Sergeon’s advice based on his solid track record.

Suspicious about the Kentucky fund’s management, trustee Tobe began pressing for information on use of placement agents in April 2009. Tobe says that in August of that year he was forced off the investment committee by Randy J. Overstreet, who’d chaired the board for 14 years; the following month Sergeon placed $200 million with Arrowhawk.

Investment chief Tosh resigned three weeks before it was revealed last year that Arrowhawk and other money managers had paid Sergeon millions; Tobe was later reinstated to the investment committee. Last month Overstreet was ousted from his position as fund-board chairman. He did not respond to requests for comment.

Sergeon, meanwhile, has kept busy beyond the Bluegrass State. Crestview Partners, the private equity firm that in 2008 paid his firm $1.1 million for arranging work in Kentucky, also landed a $100 million investment from North Carolina’s $72 billion (assets) pension fund the same year. Crestview denies working with Sergeon outside Kentucky but declined to say if it has worked with his employer, Diamond Edge.

The North Carolina treasurer’s office seems to keep as lax a grip on its public purse strings as Kentucky officials did. To educate fund fiduciaries, the SEC requires money managers that register with it to disclose use of placement agents and other conflicts of interest in a document known as an ADV II. Like many institutional funds, Crestview is not registered with the SEC or obliged to make such disclosures. The North Carolina treasurer’s office said in a written statement that it “obtains information about potential conflicts of interest prior to commitment.”

The year after North Carolina’s 2008 hiring of Crestview, Sergeon made a charitable donation of over $1,000 to the University of North Carolina Hospital in honor of Patricia Gerrick, the state’s chief investment officer. Gerrick was later fired from her post amid reports that she traveled abroad on trips funded by investment firms doing business with the state. She is currently a director of Busara Advisors along with Marx Cazenave II, founder of Cazenave & Co.–another firm that employed Sergeon in Kentucky. Gerrick did not respond to a request for comment made through Busara.

Disclosure is murky elsewhere, too. Arrowhawk, the firm that channeled $2 million to Sergeon for landing $200 million from Kentucky, also snagged $100 million from the San Joaquin County (Calif.) Employees’ Retirement Association. When FORBES contacted county officials seeking Arrowhawk’s disclosure form, the fund’s general counsel, Meg Jing, responded by stating that it is not registered with the SEC and that it does not produce a form.

Why, you might wonder, doesn’t the SEC follow New York’s lead and ban placement agents? It proposed as much in late 2009 but ran into fierce industry resistance. One agent leading that opposition was Park Hill, an outfit owned by Blackstone Group. (Park Hill itself received $2.35 million for lining up business in Kentucky–for Blackstone funds.) Blackstone’s billionaire founder, Stephen Schwarzman, personally sent a letter to the SEC opposing a placement agent ban.

The SEC settled for limiting investment advisers to paying placement fees to “regulated persons,” who are registered with the SEC and subject to pay-to-play restrictions. From July, money managers doing business with public funds will also have to issue ADV IIs.

“If the Commission determines that third party placement agents continue to inappropriately influence the selection of investment advisers for government clients–even under our enhanced rules–I expect that we would consider the imposition of a full ban on the use of these third parties,” said SEC Chairman Mary Schapiro.

So much for putting investors first.

Read the original story on Forbes.com

The Sommelier of Hip-Hop

On a ragged stretch of sidewalk in northwest Harlem across the street from a dingy bodega, a weathered wooden door separates the outside world from an oenophiles’ wonderland. A homemade bar dominates the room, backed by walls plastered with cutouts from wine publications. Empty bottles of Nicolas Feuillatte, Armand de Brignac and Cristal loom like a hunter’s trophies along the shelves.

On a torpid summer evening, Branson Belchie–better known as Branson B., hip-hop’s unofficial sommelier–hovers behind the bar in search of an acceptable champagne, every move punctuated by a slight flutter of his dreadlocks. Life is too short to struggle through a bad bottle of bubbly.

“I never particularly cared for Moet, personally,” Branson offers. “Moet has a tendency to give me a headache. Back in the day, we drank Clicquot. I turned a lot of people on to Clicquot.” He lowers his voice. “At the time, Clicquot was really good.”

Branson is the man who introduced Cristal, Dom Perignon and a number of other pricey brands to his friends Christopher “Notorious B.I.G.” Wallace and Sean “Diddy” Combs in the late 1980s. Within a few years, that suggestion sprouted into hip-hop’s full-fledged obsession with champagne. Branson is widely credited with starting the craze, and his name has been mentioned in more than 60 songs over the past two decades.

A self-described street entrepreneur, Branson, 52, got involved in the entertainment business during the early 1990s, serving as road manager for R&B singer Chris Williams and DeVante Swing of Jodeci. He also did consulting work for a number of other artists, and later for the producers of the film American Gangster. As Branson’s career blossomed, so did his taste in champagne. He bought Biggie a six-liter bottle of Taittinger brut one year for the rapper’s birthday; on another occasion, he provided bottles of Cristal and Dom Perignon to singers Faith Evans and Luther Vandross.

“You bust a bottle, pour a couple glasses, and just sip on it as they engage in the creative process,” says Branson. “Sometimes people acquire a taste for one or the other. Like, ‘Yo, I really like that Cristal.’ You go back through there, they’ve got their own bottle of Cristal and they’re offering you a drink now.”

By the turn of the century Branson was beginning to realize that he’d created a trusted brand–and that it was time to capitalize. So he teamed up with Guy Charlemagne champagne to create his own label, Guy Charlemagne Selected By Branson B. In 2004 Branson traveled to France’s Champagne region to handpick the grapes for a blanc de blancs, a brut rosé and a 2000 vintage Grand Cru.

A longtime patron of Guy Charlemagne, Branson used the winemaker’s existing offerings as a template and tweaked them to his satisfaction. The process was simple enough for someone with a palate as refined as his. “If you want a little more zest to it,” he says, “you add more pinot grapes.”

Branson launched his champagnes in 2005, starting with 100 cases distributed between a handful of stores in New York. All three earned high marks from Wine Spectator, which gave the blanc de blancs a coveted 91 rating, praising its “subtle length on the finish” and its “fine balance and intensity.” Branson’s products also caught the attention of J.R. Battipaglia, store manager of Garnet Wine and Spirits on Manhattan’s Upper East Side.

“They’re really good wines, really top quality wines,” he says. “The grapes come from a village with very chalky soil. The whites tend to be very mineraly, with almost a hint of sea salt, very crisp. For the people in the champagne world who want to experience these things, it’s a unique experience.”

Battipaglia, who still carries Branson’s bubbly, says sales have slowed during the recession, but no more than other champagne labels. Meanwhile, Branson hasn’t gotten quite as much support from the hip-hop crowd as he’d expected–many artists are too busy shilling their own spirits to give him any publicity. Branson’s old friend Diddy plugs Ciroc vodka,Ludacris recently launched a cognac called Conjure, and T.I.inked an endorsement deal with Remy Martin.

Undaunted, Branson is pressing forward. Over the past few months he’s been wading through the paperwork needed to sell his wines in other states and online, hoping that a Web presence will help take sales to the next level.

“I’m just trying to solidify a market share,” he says. “I don’t want to be an overnight situation. I want to build a solid company, a solid brand, and I want people that aspire to this lifestyle to consider my product when they decide they want a glass of champagne.”

His blanc de blancs ($45), brut rosé ($50) and 2000 vintage Grand Cru ($75) are relative bargains for champagnes of their quality, according to independent wine buyer and critic Lyle Fass. But Branson may need to reconsider the cost of his champagne if he wants to make a big splash in the rap world. “No hip-hopper is going to buy those wines at that price,” says Fass. “He needs to mark them up.”

A $45 sticker price may not be glamorous enough for the average rapper, but back at his champagne speakeasy in Harlem, Branson seems unconcerned. Emerging from behind the bar, he softly pops open a bottle of his 2000 vintage and tips a trickle of champagne to the floor before filling two flutes. “To life.”

“You know,” he says, taking a long sip, “I think what makes a champagne great is that you enjoy it.”

Read the full story on Forbes.com

Wiz Khalifa’s High Earnings
Forbes, 08.09.11
By Zack O’Malley Greenburg
The Pittsburgh-bred rapper has transformed his affection for marijuana into a moneymaking marketing tool, and in the process, turned himself into a lucrative lifestyle brand.

The Camp Bisco music festival in upstate New York is a morass of sunburned teenagers stumbling around drunkenly in the mud–a distant echo of Woodstock, for better or worse. But when I knock on Wiz Khalifa’s trailer behind the main stage, I find myself tumbling down a slightly different rabbit hole.

The door opens, releasing a cloud of marijuana smoke that dissipates to reveal the rapper sitting by himself on a couch. His wispy, heavily tattooed frame is hunched over and he’s clutching a pair of scissors, cutting a white towel in half. “Arts and crafts,” he mutters. He’s the night’s headlining act, but his setup is minimal—just a skeleton crew entourage and a small table adorned by rolling papers, an iPad, two dozen baseball caps, and a football-sized Ziploc bag of marijuana.

“I’m not bougie where I need all of that other shit,” he explains with a grin, starting to roll a fresh joint. “I need some food, I need some weed, I need a place to smoke my weed.” He licks the joint to seal it and produces a lighter from his pocket. “It’s not my weed, it’s up-here weed,” he adds, almost apologetically. “It ain’t bad, though.”

Full Coverage: Hip-Hop Cash Kings 2011

For Wiz Khalifa, just 23 years old, marijuana is more than just an illicit hobby—it’s an identity. His latest album is called Rolling Papers; he appears on the cover in a cloud of green smoke. He releases YouTube videos of himself smoking up in his “Puff Bus” and once claimed he spends over $10,000 a month on weed. He might be the artist most closely associated with marijuana since Bob Marley. But Khalifa has transformed his affection for the plant into a moneymaking marketing tool, and in the process, turned himself into a lucrative lifestyle brand.

Khalifa raked in $11 million over the past year, enough to land him the No. 11 spot on our annualHip-Hop Cash Kings list. Millions of Americans first heard his music this winter when his smash single “Black and Yellow” became the unofficial theme song of his hometown Pittsburgh Steelers’ Super Bowl run; the single was certified triple-platinum. But FORBES estimates that the bulk of Khalifa’s earnings came from touring and merchandise, including 133 shows in a 12-month stretch from May 2010 to May 2011.

“We identify him at our company as one of the next potential superstars in the genre and as someone who will develop into a major hard ticket act,” says Randy Phillips, chief of concert promoter AEG. “You know it’s getting really big when it crosses over to suburban kids.”

Khalifa’s appeal as a so-called crossover act—evidenced by popularity on the college campus circuit and at festivals like Camp Bisco—is underscored by the startling success of his merchandise. Most hip-hop acts tend to gross $2-$3 per head per show; Khalifa’s take is typically north of $5 and sometimes soars as high as $15. That’s territory generally reserved for the likes of mom-approved pop acts like Justin Bieber and Taylor Swift.

But the merch peddled by Khalifa and his crew is far from PG. There’s his black-and-yellow hoodie with a dimebag-sized zipper pocket on the inside of a sleeve ($60); at every show, he sells 150-200 packs of Wiz Khalifa branded rolling papers ($10); for $42, he even hawks a limited edition “420 Kit” that comes with papers, a t-shirt, an herb grinder and baggie (online, a disclaimer: “Wiz Khalifa 420 Kits and Rolling Papers are for adult use and are not intended for use with illegal or controlled substances.”) The artist himself seems to not feel compelled to disclaim.

“Everybody smokes weed,” he says. “My music and my fan base is really built off of my lifestyle … and from older people to doctors, plenty of really successful people function off weed.”

Stoned or not, these people want to buy merchandise—at shows and beyond. Though he sells an average of 700 shirts a night on tour according to industry insiders, roughly one for every three attendees, Khalifa is also the all time top-grossing urban artist at teen-focused mall retailer Hot Topic.

“He built a fan base the way an old-school rock band would build a fan base—get in the van and go,” says Matt Young, Senior VP of Warner Music Group’s merchandising arm, which works in partnership with Khalifa and gets a cut of sales. “Merch is about wanting to identify and wanting to be part of something … I think the pot smoking thing is a big part of it. He’s proud of his lifestyle and people want to share this.”

Adds Hot Topic’s Robert Thomsen: “In the end, the biggest factor to his appeal is that his music speaks and relates to our teen fan.”

Despite his young age, Wiz Khalifa is already something of a hip-hop veteran. Born Cameron Jibril Thomaz to a pair of military parents, he moved from South Carolina to Germany to Japan before settling in Pittsburgh at age nine. He wrote his first song, a rap called “Kool Kats,” when he was in third grade (“It was just about, like, being cool as f*ck,” he explains)

His stage name is a nod to both past and present. “Khalifa is Arabic, it means successor, leader, shining light,” he says. “My granddad is Muslim and he gave me that name … ‘Wiz’ just came from me being the youngest guy around everybody. I was pretty good at anything I tried to do, so they called me a young wiz.”

Khalifa released his first mixtape, Prince of the City, in 2005; the next year, he launched his first album,Show and Prove, on an independent label. Hip-hop heads began to gravitate toward his lively flow and unique sound, which seemed to resist characterization in the genre’s hyper-regional classification system.

“I always feel like that gave me an advantage,” he says. “When you’re from the East Coast or you’re from the South, people expect you to sound a certain way. So if you don’t sound that way, people won’t label you as that type of artist. For me, I had a whole new lane to create for myself being from Pittsburgh and being a Midwest artist.”

In 2007, still a teenager, he signed with Warner Brothers Records but left after his planned album experienced numerous delays. He resurfaced on the indie scene, releasing Deal or No Deal and a series of popular mixtapes in 2009 before coming to a new agreement with Warner-backed Atlantic Records last summer.

Along the way, Khalifa adopted the term “Taylor Gang” to refer to himself and his entourage; the name adorns much of his merchandise and has become synonymous with his music.

“Taylor really just came from me wearing Chuck Taylors,” he says. “A lot of people in Pittsburgh didn’t really wear them, that was sort of my thing. Then it became less of a Chuck Taylor thing and more about if something’s tailored, it’s for you, you’re an individual. It became that individuality thing.”

Expressing one’s individuality sometimes involves breaking the rules, and that’s certainly the case with Khalifa and his love for marijuana. But so far, he says, he hasn’t had any trouble with the law at his concerts (one exception: a November arrest for marijuana possession between gigs; charges have since been dropped). Some venues are “420-friendly,” others aren’t—and he and his fans deal with it either way.

“When they’re not, we respect it and the fans respect it. And when it is friendly, then people know,” explains Khalifa. “The high, I don’t think that ruins anything, it makes people chill out. And then when you tell them they can’t smoke weed, they find other creative ways to get high that’s less constructive.”

He laughs. “It’s just weed!”

By this point, Khalifa has polished off two joints since I joined his trailer party; he’ll blaze up another on stage in an hour, and who knows how many in between. And although he’s shown an (endearingly) goofy side—at one point rolling up his sweatpants to ask my opinion of a new tattoo on his ankle, just above an older one depicting the Teenage Mutant Ninja Turtles—he’s more coherent than many people are sober as he explains his plans for the future.

“I just want to expand the brand organically and naturally, like people are used to seeing from me, and I don’t want to move too fast,” he says. “The work I put in five years ago got me where I am now … Every day I wake up is a work day, and I don’t plan on chilling out anytime soon.”

With the clock ticking away toward his headlining performance, he tells me it’s time to bid each other adieu.

“This has been an awesome interview,” he declares, showing me to the door. “All right, man, I’ll see you out there, foo!”

Read the original story on Forbes.com

James Young: Full steam ahead.

Saving The Union (Pacific)
Forbes, 10.13.09
Despite a billion-dollar government mandate and the worst recession in memory, chief James Young is putting the country’s oldest railroad back on track.

On the fringe of Council Bluffs, Iowa, where the windows are cracked and rust clings to the hubcaps of dilapidated Cadillacs, the future of American railroading thrums at idle, part of a billion-dollar shotgun wedding between Union Pacific and the world’s most advanced train-control system.

At 200 tons and 4,400 horsepower, the $2 million General Electric ( GE - news - people )-built locomotive sitting in an oversized garage represents the consummation of that relationship, thanks to its gleaming, GPS-enabled guts. Chief Executive James Young has spent the past year revving up a GPS refit of his company’s 6,000 locomotives at a cost of $60,000 apiece. Concurrently, the company is beefing up signal capacity along 32,000 miles of track as part of a $1.4 billion total outlay. The vast new system will pinpoint a locomotive’s location within one yard, improving safety and fuel efficiency.

It’s an expensive job–especially in lean times–but Young didn’t have a choice. After a Los Angeles commuter train collided head-on with a Union Pacific ( UNP - news- people ) locomotive in September 2008, killing 26 people, Congress passed the Rail Safety Improvement Act of 2008, which required Union Pacific and the other major railroads to implement a new train control system by December 31, 2015. For Union Pacific, the world’s largest railroad, that means refitting an average of 2.5 locomotives, 10 wayside interfaces and 10 miles of track every day for the next seven years.

Last fall, as diesel prices approached $5 per gallon, the mandate didn’t look so onerous. Union Pacific consumed 1.2 billion gallons of diesel in 2008, second only to the U.S. Navy. Initial estimates of the new system suggested it could cut the company’s fuel consumption by as much as 8%, which would translate to half a billion dollars in annual savings, in addition to the important safety improvements.

Then the global trade bonanza ground to a halt, customers dried up and diesel dipped toward $2 a gallon. “I now have a billion-dollar unfunded mandate–that bothers me,” says Young. “Everything has to be right for this project to make financial sense.” Based on current fuel prices, the opposite is happening. The Federal Railroad Administration estimates that the new system will cost the railroad industry $10 billion and return just $650 million.

Union Pacific reported a 22% decline in carloadings in the second quarter; revenues fell 28% to $3.3 billion, slightly worse than Burlington Northern’s 26% decline. Young has mothballed 1,900 locomotives and furloughed 4,400 employees to compensate. Starting in September 2008, Union Pacific’s stock plunged 60% over six months, and now trades at 14 times earnings. It’s bad, but on par with sector peers.

Still, says Kevin Kirkeby, a railroad analyst at Standard & Poor’s, “he seems to have been more willing than other rail managers to really take out costs. It sets the stage for what we expect would be some major efficiency gains as volumes come back on the rails.”

Some of that’s happened already, with average train speed up 20% to 27.4 miles per hour in the second quarter. Young is also hoarding cash: his company holds $1.7 billion on its balance sheet, nearly double the $611 million year it had a year ago.

What’s more, Young has been aggressively wooing customers, especially in the lucrative premium cargo category. This includes hauling new autos, hazardous chemicals, and other high-margin products in specialty train cars. In June, Union Pacific lured logistics outfit Hub Group ( HUBG - news -people ) away from Burlington Northern. Union Pacific now gets an average of $1,755 per carloading, 11% more than Burlington Northern’s $1,576. That should put Union Pacific in the engineer’s seat when things turn around, says Kirkeby.

Young is used to tough gigs. The oldest of six children from a working-class Omaha family, he spent seven years getting through college, working odd jobs to pay tuition. He joined Union Pacific in 1978, accepting the offer just days before a position opened up at his first choice, Northern Natural Gas. (The company later went on to become part of Enron.)

After working his way through the ranks at Union Pacific, Young was elected chief in November 2005. He inherited a lumbering giant plagued by overcapacity, sloppy service and an unwieldy acquisition–six years earlier, Union Pacific had finally succeeded in buying rival Southern Pacific, a deal the company had originally completed in 1901, only to see it reversed by a monopoly-fearing Supreme Court in 1913. When the deal was reconstituted almost a century later, the troubled remnants of Southern Pacific weighed down Union Pacific’s balance sheet for years. The year Young took over, earnings were down 29% to $600 million, while profit margins had fallen to an industry-worst 6%.

Young also got tough with customers. When one factory lagged unloading a 130-car coal train, he pushed its managers to work Saturdays so that his trains wouldn’t sit unused all weekend. Young told foreign shippers making deliveries at West Coast ports that his trains would leave without them if shipments didn’t arrive on time. Margins now stand at 22.7%.

“Jim Young is one of the best managers that I’ve met with,” says Tom Marsico, owner of Marsico Capital. “In the past, people were afraid to say no to customers.”

Young demurs. “I’m no Attila the Hun,” he says. “But we did demand a culture of service, which was not always at the top of the list.”

In addition to standing up to deadbeat customers, Young championed Union Pacific’s Fuel Masters Program, an employee-driven initiative that rewards the most efficient engineers with debit cards they can use to fill up their own vehicles.

Indeed, Union Pacific has a few trends working in its favor. Trucking companies’ market share of domestic shipping has been stalled at 30% for the past decade, while rail shipping is up from 38% to 43%. Manufacturers have taken note that, based on gross ton miles, trains can carry a ton of freight 830 miles on a single gallon of fuel; trucks stretch a gallon only 200 miles.

With diesel prices up 30% from five-year lows in March, it seems cheap fuel may not be around much longer. If it ever returns to last summer’s levels, the mandate–now just a year old–could still pay off.

Akon: A Cash King for any economic climate.

Akon’s Recession-Proof Tune
Forbes, 07.09.09
By Zack O’Malley Greenburg
One sweet-singing impresario is thriving amid rap’s recession.

Ten minutes before the start of a benefit concert at Harlem’s Apollo Theater, and rapper-singer-songwriter Akon is brawling with his deejay over how to hook a stodgy crowd of Manhattan philanthropists at the 2009 Do Something Awards.

“We gotta get it poppin’ from the giddyup,” Akon argues. His pick: Open with “Beautiful,” a synthesizer-drenched ballad whose upbeat chords make you feel like you’re falling in love at a beachside club in Dakar, where Akon grew up. Performing the song minutes later, he sprints and hurls himself headfirst into the audience, landing the arms of his waiting entourage–and a few surprised-looking yuppies. “When he does that in Senegal,” his publicist whispers, “they rip his clothes off.”

Here they just give him money. Akon is one of the only artists to increase his income in a year that’s been almost as cruel to hip-hop as it’s been to Wall Street. Rap record sales fell 20% in 2008, steeper than the 15% industry-wide decline. Worse, the corporate appetite has all but dried up for “360 deals” like last year’s $150 million pact between Jay-Z and concert promoter Live Nation ( LYV - news - people ). The 20 top earners in hip-hop combined to make $300 million from June 2008 to June 2009–40% less than last year’s half-billion.

Yet Akon’s earnings have nearly doubled. He’s tied with 50 Cent for fourth place on Forbes’ latest list of Hip-Hop’s Cash Kings with an estimated $20 million in pretax earnings over the last 12 months, up from $12 million over the prior year. His camp insists he’s made even more, thanks in part to his new album Freedom, on its way to platinum status despite the slow market.

“I think people lean more to music when they’re going through the hard times,” Akon says, lounging in a midtown Manhattan hotel the day after his Apollo appearance. “The recession is really impacting everyday people, and they want to try to get away from the troubles they’re dealing. Music is always a crutch.”

Selling albums–Akon has moved 9 million in his young career–is just one part of the business. Akon performed a staggering 100 concerts from Antwerp to Vancouver during the past 12 months. According to Pollstar, he grossed $230,000 per show on average, plus merchandise sales. Factor in declining record sales, and it’s not hard to see why touring is such a crucial moneymaker for artists like Akon–especially because they don’t have to split concert proceeds with record labels as they do on albums. “They just try to rape you,” says Akon. “You don’t see money till your second or third album because you’re so busy recouping.” He makes nearly half his money touring.

In addition to writing, singing, producing and rapping his own songs, Akon offers the same services to other artists–sometimes for a six-figure upfront fee, plus as much as half the royalties. He’s logged more than 160 guest appearances, working with acts from Gwen Stefani to fellow cash king T-Pain.

It’s paying off. “At the beginning of his career, like many artists, he did not have the infrastructure in place to handle everything that was coming at him,” says David Bolno, a co-director at Nigro Karlin Segal & Feldstein, which Akon hired to represent him last year. “Together we put a business plan in place in order to manage his current business ventures, the back-end administrative functions on invoicing and collections for his producing and songwriting.”

Akon also launched his own record label Konvict Musik, which includes KonLive Distribution, a 50/50 venture with Interscope. He gets half the profits from album sales and still keeps his own touring revenues, merchandising rights and ringtones. Last year Akon co-produced Lady Gaga’s debut The Fame, which sold more than 1 million copies and collaborated on the multiplatinum single “Just Dance.”

“He’s one of the most prolific producers around, period,” says Ryan Schinman, chief of Platinum Rye, the world’s largest buyer of music and talent for corporations. “Akon is one of the savviest businessmen in the industry. He’s not going anywhere.”

Akon got noticed five years ago with the release of “Locked Up,” a song about the time he spent jailed for auto-theft charges in Georgia and New Jersey. The multiplatinum single is one of many recognizable hits from his first album, Trouble. But the details of Akon’s life prior to 2004 remain murky.

New York State court records show that Aliaune Damala Thiam was born on April 30, 1973. Wikipedia lists his full name as Aliaune Damala Bouga Time Puru Nacka Lu Lu Lu Badara Akon Thiam. Asked if this is correct, Akon grins. “It might be,” he says. Age? “Twenty-young.” Marital status? “I’m very loved.”

What’s fairly certain is that Akon was born in St. Louis, Mo., sometime in the past 40 years and spent much of his childhood in the West African country of Senegal, which he describes as his “hometown.” The child of a dancer mother and a renowned percussionist father, Mor Thiam, Akon learned to play five instruments, including drums and guitar.

Akon spent his school years in the states and summers in Senegal. He moved to the U.S. full time for high school, settling in Jersey City, N.J., and later, Atlanta. After spending a semester at Clark Atlanta University, Akon says he dropped out to lead a Gone in 60 Seconds-esque car-theft outfit. “I was just the biggest hustler ever,” he says. “I just wanted to be rich, I didn’t care how. However I could get a break, or an opportunity to make money, my hands were involved in it.”

The law caught up with him in Atlanta in the late 1990s, when he claims cohorts ratted him out. Akon says he spent three years in and out of jail as penance for his car-related kleptomania.

The story took a hit last year when The Smoking Gun reported that much of Akon’s criminal background was exaggerated or completely fabricated, citing court documents that show his only automotive offense as a 1998 bust for possession of a stolen BMW in New Jersey. The report indicates that Akon served several months in Georgia’s DeKalb County Jail before prosecutors dropped all charges. He claims his criminal record was expunged as part of a settlement because it had been making it difficult for him to obtain visas when performing abroad.

Whatever his past, the future looks good for Akon. He’s collaborating with Lady Gaga and Lionel Richie and finishing a new album, due out this fall. He was also one of the last artists to work with Michael Jackson–last year the duo recorded the song “Hold My Hand,” which has since been leaked on the Internet. Akon says the song and other material recorded with Jackson will not be released without the consent of Jackson’s family.

Beyond music, Akon is producing a reality show–for a major network, he says–where members from different Los Angeles-area gangs are selected to be in a band together. He’s also putting the finishing touches on Aliaune, the more expensive counterpart of his Konvict Clothing line.

Perhaps his most ambitious project is Hitlab.com, launched last September, an online community where aspiring artists can promote and sell their music outside record-label auspices. The site offers proprietary technology that promises to predict whether or not a song has the potential to be a hit. “I call it the industry killer,” he says. “That’s going to be the future for music.”

If anyone would know, it’s probably Akon.

Video: Akon’s Business Empire

Video: Akon’s Forbes Remix Exclusive

In Pictures: Backstage With Akon At The Apollo

Forbes magazine, 01.16.12
Mac Miller: Indie Music’s Savior?
The 19 year-old rap sensation is creating a new blueprint for mainstream musical success — without the help of a major record label.

Forbes magazine, 01.16.12
30 Under 30 in Music
Mac Miller, Justin Bieber, Lady Gaga — and a handful of entrepreneurs whose names you’ll need to know — lead Forbes’ first-ever list of the music industry’s best and brightest youngsters.

Forbes.com, 01.11.12
Michael Jackson Vs. Elvis: The Rise And Fall of Two Kings
In Las Vegas, the gloves are coming off in the battle for posthumous supremacy.

Forbes.com, 12.22.11
The Best Jewish Rapper of All Time
In honor of Hanukkah, three Hebrew hip-hop heads (including yours truly) select The Tribe’s top rhymesters.

Forbes.com, 12.14.11
David Archuleta Headlines First-Ever Forbes Holiday Concert
The former American Idol contestant talks about the business of music — and brings some holiday cheer to the newsroom.

Forbes.com, 12.14.11
Why Nickelback Isn’t Getting Paid For Thanksgiving Day Gig
Hint: It’s the same reason the Black Eyed Peas didn’t get paid for their Super Bowl gig.

Forbes.com, 11.22.11
Defending the Jay-Z Class at Georgetown
Who says hip-hop doesn’t measure up to Homer?

Forbes.com, 11.08.11
Watching Jay-Z and Kanye’s Throne at MSG
A front-row seat to what might be one of the more ambitious undertakings in live hip-hop history.

Forbes.com, 11.02.11
2 Chainz And The “Forbes Effect”
The rapper speaks out on what compelled him to make “Forbes Muzik.”

Forbes.com, 10.25.11
Michael Jackson and the Economics of Touring After Death
The King of Pop may end up earning more on the road posthumously than he did alive.

Forbes.com, 10.11.11
Less Money, More Problems
Financial lessons from rapper Ace Hood.

Forbes.com, 10.06.11
Why Steve Jobs Was The Most Important Man In Music
Hint: It’s a lot more than just inventing the iPod.

Forbes.com, 09.27.11
Steve Stoute on the Tanning of America
The entertainment marketing guru talks Jay-Z, Brooklyn, and the difference between good and bad advertising.

Forbes.com, 09.22.11
Who Will Be Hip-Hop’s First Billionaire?
A look at rap’s wealthiest.

Forbes.com, 09.20.11
Get Rich, Or Feed The Poor Trying
50 Cent’s latest move.

Forbes.com, 09.19.11
Richard Branson On Being A Rockstar Billionaire
A chat with the founder of the Virgin empire.

Forbes.com, 09.14.11
Hip-Hop’s Cash Kings On Canvas
New York artist Borbet offers a visual take on rap’s top earners.

Forbes.com, 08.31.11
The Price of Fame in Ireland
On the Emerald Isle, footballers play for free.

Forbes.com, 08.26.11
The Rolling Stone Who Gathers Moss
Keyboardist and musical director Chuck Leavell might be the greenest man in rock and roll.

Forbes.com, 08.09.11
Hip-Hop Cash Kings 2011: Full Coverage
Jay-Z tops this year’s list. Who else made the cut?

Forbes.com, 08.09.11
Wiz Khalifa’s High Earnings
The pride of Pittsburgh banked $11 million this year, thanks in part to a smokin’ hot merch business.

Forbes.com, 08.09.11
Birdman’s Billion Dollar Dreams
The Cash Money chief talks business with FORBES.

Forbes.com, 08.09.11
Hip-Hop’s Favorite DJ
The incredible business of DJ Cassidy.

Forbes magazine, 07.18.11
The Tables Are Turning
Vinyl has been on the rebound for years. Will LPs outlast CDs?

Forbes.com, 06.29.11
Michael Jackson’s $400 Million Afterlife
The King of Pop continues to rake it in from beyond the grave.

Forbes.com, 06.09.11
Red Dillard: Musical Gangster
The Harlem legend once labeled as “the most dangerous man in America” did have a soft spot.

Forbes magazine, 05.18.11
Mars Attacks!
Bruno Mars isn’t on the cover of FORBES, but he’s getting closer.

Forbes magazine, 05.18.11
Still Rocking
Bon Jovi earned more than Justin Bieber, Katy Perry and Kanye West — combined. How’d that happen?

Forbes.com, 05.17.11
Without Me
Why Eminem Isn’t Getting Anything From That Universal Suit (Yet)

Forbes.com, 04.20.11
Lady Gaga’s Meaty Tax Deduction
Sometimes it pays to be weird.

Forbes.com, 04.05.11
Jay-Z, Beyonce and April Fools’ Day
In which I accidentally convince hundreds of people that music’s royal couple bought EMI.

Forbes.com, 03.31.11
The (Grateful) Dead’s Lifesaving Device
A roadie, a keyboardist and a real estate mogul walk into a bar…

Forbes.com, 03.17.11
St. Patrick’s Day: A Pot of Gold For Irish Bands
The busy business of blarney.

Forbes.com, 03.16.11
Why Diddy Will Be Hip-Hop’s First Billionaire
The main reason starts with “C” and ends with “iroc.”

Forbes.com, 03.01.11
Justin Bieber: Business or Businessman?
A surprise encounter with the teen heartthrob yields questions about his business savvy.

Forbes.com, 03.14.11
Grammy Bounce
The financial aftermath of an award.

Forbes.com, 02.08.11
Insuring the World’s Fastest Fingers
Why Oliver Lewis sleeps easy.

Forbes.com, 02.04.11
Shutout
Why the Black Eyed Peas didn’t get paid for their Super Bowl gig.

Forbes.com, 02.03.11
The Decemberists’ Business Model
Just don’t call it a ukulele.

Forbes.com, 01.28.11
A Visit To The Rolling Stones’ Morocco
Tangier has really let itself go.

Forbes.com, 12.23.10
Paul McCartney Continues to Have a Wonderful (Financial) Christmas Time
The former Beatle has given himself a gift that keeps on giving.

Forbes.com, 12.14.10
Fab 5 Freddy Goes to Las Vegas
One of hip-hop’s most influential trailblazers opens up about his latest work.

Forbes.com, 12.14.10
Jay-Z, 50 Cent and Diddy’s Billion-Dollar Remix (“I Get Money: Forbes 1-2-3″)
The original cash king anthem, inspired in part by the work of yours truly.

Forbes.com, 12.08.10
11 Musicians To Watch In 2011
Justin Bieber leads a list of stars ready to take the next big step up–both musically and financially–in the year ahead.

Forbes.com, 12.08.10
Flo Rida Vows He’ll Return to FORBES List
Fortunately for Flo, FORBES’ Cash Kings list is determined by gross income, not net profits after car payments.

Forbes.com, 11.16.10
What Jay-Z’s Book Doesn’t Decode
The rapper’s memoir leaves plenty of questions about his life unanswered.

Forbes.vom, 11.05.10
Names You Need to Know For 2011: SoundExchange
Hey, dirt-ay, SoundExchange got your money!

Forbes.com, 11.01.10
Tupac Shakur’s Ghastly Halloween
For the first time in his very lucrative life after death, Tupac Shakur’s earnings aren’t enough to place him among hip-hop’s living Cash Kings.

Forbes.com, 10.28.10
George W. Bush’s Gift to Hip-Hop
John Forté would still be sitting in jail, were it not for a last-minute pardon from a president not known for his love of rap.

Forbes.com, 10.25.10
The Rich Afterlife Of Michael Jackson
Smart deals by his estate have the King of Pop set to be one of the top earners in music for years to come.

Forbes.com, 10.22.10
Usher’s Favorite Music Rejection Service
Great news for up-and-coming musicians: Now you can pay to have your music rejected by industry executives!

Forbes.com, 10.14.10
T.I. Saved Someone’s Life Last Night, And Perhaps His Own Career
A life-saving gesture this fall may have saved T.I. a few years of jail time.

Forbes.com, 10.15.10
Mr. T Wants to Buy Your Gold — Time to Sell?
Mr. T has signed on to hawk a mail-in gold buying service. But, he assures us, it’s no sign of a bubble (Bonus: a video of me interviewing the big guy).

Forbes.com, 10.08.10
The Recording Industry’s Piracy-Proof Business Plan
With illegal file sharing contributing to a 50% drop in revenues across the recording industry over the past decade, many artists and record labels are turning to paid product placement in songs and videos to scare up funds.

Forbes.com, 10.06.10
Swizz Beatz’s Uncle Relaunching Ruff Ryders With Unusual Business Plan
Joaquin Dean is revamping the label that helped launch the careers of Swizz Beatz, The Lox and DMX.

Forbes.com, 11.04.10
Mariah Carey and Lil Jon’s Favorite Jeweler
From diamond-encrusted fish tanks to the largest diamond pendant in recorded history, Jason Arasheben is making some of the world’s most outlandish pieces for some of the world’s mos celebrated stars.

Forbes.com, 09.22.10
Jay-Z’s $50 Million Music Box
Jay-Z is already worth $450 million, by our estimates. Here are a few reasons he’s well on his way to becoming a billionaire.

Forbes.com, 08.17.10
Special Report: Hip-Hop Cash Kings
(Edited by Zack O’Malley Greenburg)
Even in a shaky economy, rap’s richest keep finding ways to thrive.

Forbes.com, 08.17.10
Hip-Hop’s Unofficial Sommelier
Branson B. has provided rap’s royalty with fine champagne. Now he’s trying to make his own brand of bubbly pop in a crowded marketplace.

Forbes.com, 08.17.10
Hip-Hop Cash Kings 2010
Rap’s richest are finding ways to thrive during the recession — especially these top 20 earners.

AOL Daily Finance, 05.14.10
The Crunk Life
Lil Jon explains how he’s creating a diversified portfolio (on video!)

AOL Daily Finance, 02.04.10
The Roots Grow Their New Hip-Hop Business Model, a Year Into NBC’s ‘Late Night’
A year after the eclectic Philly ensemble became Late Night with Jimmy Fallon’s house band, it has a new strategy. Drummer Ahmir “Questlove” Thompson discusses the network salary, late-night jams, and less touring.

AOL Daily Finance, 02.01.10
A Grammy-Winning Producer Explains How an Award Turns into Cash
Grammy-winning producer Jim Jonsin discusses the economics of winning an award: the ability to demand $75,000 per song from a music label, and the potential to demand $150,000.

Forbes.com, 07.09.09
Akon’s Recession-Proof Tune
One sweet-singing impresario is thriving amid the rap recession.

Forbes.com, 07.09.09
The Man Who Invented Hip Hop
Afrika Bambaataa is credited with creating a musical movement, but he’s no cash king. That’s fine by him.

Forbes.com, 07.09.09
Hip-Hop’s Cash Kings 2009
Rap’s richest aren’t immune to the worldwide downturn, but top stars still find ways to rake in millions.

Forbes.com, 06.27.09
Michael Jackson’s Estate Sale
Jackson’s debt may force a quick sale of his prized asset: rights to the Beatles catalog.

Forbes.com, 08.18.08
The 50 Cent Machine
Curtis ”50 Cent” Jackson is hedging against the whims of the music industry–with the help of an African billionaire.

Forbes special issue, 08.18.08
The Beatz Goes On
Records produced by Swizz Beatz have sold over 100 million copies. Now he wants to become an industry.

Forbes.com, 08.18.08
Hip-Hop’s Cash Kings 2008
Behind the thumping beats and aggressive stage personas are some very savvy businessmen. These 20 top the list.

Forbes magazine, 08.16.07
Money From Heaven
Think you have estate problems? Take a look at the fighting over slain rapper Tupac Shakur and other hip-hoppers.

Praise for Empire State of Mind

“Fascinating, well-done biography of one of the most extraordinary entrepreneurs of our era.” – Steve Forbes

“Zack O’Malley Greenburg has become one of the rare reporters to bring dignified coverage of the hip-hop business into the mainstream. Empire State of Mind is a pure product of Greenburg’s care and insight, an exploration of hip-hop’s most enigmatic mogul, Jay-Z.” – Dan Charnas, author of The Big Payback: The History of the Business of Hip-Hop

“Empire State Of Mind follows the money and key pieces of the Jay-Z puzzle in this insightful, savvy read. From Jay’s humble Bed-Stuy Brooklyn roots as Shawn Carter into street crime and the drug game, to his rocket rise to the heights of hip-hop and the music business as one of entertainments most successful players…this book is like a GPS leading us through the modern urban reality of how Jay-Z’s empire was built.” – Fred “Fab 5 Freddy” Brathwaite, hip-hop pioneer, artist, and longtime host of Yo! MTV Raps

“Lively and often surprising, Empire State Of Mind analyzes one of the greatest assets of the hip-hop generation: the business mind of Jay-Z. In capturing Jay-Z’s refuse to lose mentality, Zack O’Malley Greenburg tells an important, instructive American story of our time.” – Jeff Chang, author of Can’t Stop Won’t Stop: A History of the Hip-Hop Generation

About Empire State of Mind

You can wake up to the local radio station playing Jay-Z’s latest hit, spritz yourself with his 9IX cologne, slip on a pair of his Rocawear jeans, lace up your Reebok S. Carter sneakers, catch a Nets basketball game in the afternoon, and grab dinner at The Spotted Pig before heading to an evening performance of the Jay-Z-backed Broadway musical Fela! and a nightcap at his 40/40 Club. He’ll profit at every turn of your day.

Empire State of Mind tells the story behind Jay-Z’s rise to the top as told by the people who lived it with him–from classmates at Brooklyn’s George Westinghouse High School; to the childhood friend who got him into the drug trade; to the DJ who convinced him to stop dealing and focus on music. This book explains just how Jay-Z propelled himself from the bleak streets of Brooklyn to the heights of the business world.

Zack O’Malley Greenburg draws on his one-on-one interviews with hip-hop luminaries such as DJ Clark Kent, Questlove of The Roots, Damon Dash, Fred “Fab 5 Freddy” Brathwaite, MC Serch; NBA stars Jamal Crawford and Sebastian Telfair; and recording industry executives including Craig Kallman, CEO of Atlantic Records, to paint a tantalizing portrait of a very private mogul. Greenburg also reveals new information on Jay-Z’s various business dealings, such as:

* The feature movie about Jay-Z and his first basketball team that was filmed by Fab 5 Freddy in 2003 but never released.
* The Jay-Z branded Jeep that was scrapped just before going into production.
* The real story behind his association with Armand de Brignac champagne.
* The financial ramifications of his marriage to Beyonce.

Jay-Z’s tale is compelling not just because of his celebrity, but because it embodies the rags-to-riches American dream and is a model for any entrepreneur looking to build a commercial empire.

Reviews

“Jay-Z’s rise to fame has as many lessons for would-be moguls as for budding rappers … All these lessons are clear from Empire State of Mind: How Jay-Z Went From Street Corner to Corner Office, by Zack O’Malley Greenburg (Portfolio, $25.95), one of the year’s best rock books.” –Bloomberg News

“Well told … the heart of Empire State of Mind is its depiction, helped by some good shoe-leather reporting, of the commercial deals that have enabled Jay-Z to profit from exploiting his prestige and personality.” - The Financial Times

“In his debut book, Greenburg hits the mark. Empire State of Mind is an easy read that packs an informative, motivational punch for anyone who is trying to improve their situation, land a job, or advance their career.” - AOL/Huffington Post

“Business savvy is really what sets Jay-Z apart, and that’s the subject of Zack O’Malley Greenburg’s enlightening, engaging, and excellent new book … Greenburg zeroes in on Jay-Z’s ability to hustle in the studio and in the boardroom, creating a fascinating look at the businessman behind the man. In addition, he writes with a rapid-fire prose that makes Empire State of Mind flow like an novel or film.” - ArtistDirect

“Every person with an iota of entrepreneurial inclination should read Empire State of Mind … [Greenburg's] understanding of hip-hop and his familiarity with the world of high finance make him uniquely suited to pen such a smart, informative and entertaining work. Excellence!” – Hip-Hop Weekly

“Before Diddy and his missing Mercedes-Benz S-Class, before Eminem and his imported-from-Detroit Chrysler 200, even before Funkmaster Flex and his special-edition Ford Expedition, there was the Jay-Z Jeep Commander. You would be forgiven, however, for not remembering the commercials … the Jay-Z Jeep never rolled deep. Mr. Greenburg dissects how the collaboration went awry.” – New York Times

“Greenburg writes of Jay-Z’s rocky beginnings in the Brooklyn projects and his detour into street-corner dealing, but mainly focuses on Jay-Z the mogul, whose reach extends beyond music to the NBA, apparel, restaurants, endorsements and Broadway. Check it out.” - USA Today

“O’Malley Greenburg is easily the world’s foremost authority on the subject of the finance of hip-hop … Acting often as investigative reporter, he travels thousands of miles to hunt down insider information on Jay’s various ventures, from the Jay-Z Jeep that never came to be, to the hush-hush details of the rapper’s partnership with champagne Armand de Brignac … Greenburg does a great job of unpacking the rapper’s business mentality, and the steps he’s taken to earn his half-billion.” – Crawdaddy

“The biography by journalist Zack O’Malley Greenburg, out this month, provides a colorful reminder of the rapper’s dark roots.” – New York Post

“After reading Greenburg’s book, I have to admit I understand why [Jay-Z] makes a superb guide for your career, even if you are looking to be an investment banker or grocery store manager instead of a hip hop legend.” – Anthony Balderrama, CNN.com

“[Empire State of Mind] has some interesting sources and revelations that may shock even the biggest super-fan.” – HipHopDX

“The new biography of the rap mogul lavishes praise on Jay-Z but also depicts a businessman with Antarctica for a heart.” – Bloomberg BusinessWeek

“Empire State of Mind tells the story of rapper Jay-Z (aka Shawn Carter) and his rise from drug slinger to tape slinger and, later, to corporation runner.” – NPR

“Zack O’Malley Greenburg’s book take us comfortably through the story of Jay-Z’s background, hard start, challenges, opportunities, talents, success, and choices. This is an easy and comfortable read.” – New York Journal of Books

“If Jay-Z’s collective body of work was ‘Food For Thought’ … Greenburg does this dishes in his literary debut. Greenburg uses his extensive resources (perhaps garnered as the crafter of the famous “Forbes Hip-Hop Cash Kings” list) to unravel the business acumen Jay-Z has used to catapult himself to financial prosperity.” - Mog.com

“To learn more about how Jay-Z changed many people’s taste in Champagne and so many other things, be sure to check out Empire State of Mind … Until now, all those interested begrudgingly had to buy into the story spun by Jay-Z’s camp that Armand de Brignac was just a bubbly that HOVA discovered in a New York wine shop.” – Bottlenotes

“[Empire State of Mind] … fill(s) in many of the blanks surrounding the rapper’s business dealings, pulling from interviews with some of Hov’s colleagues and business partners willing to dish the dirt on how he rose to fame and fortune.” – The Boombox

“A fascinating, unauthorized story, which decodes the Jay-Z myth as much as it reinforces it.”– ABCDrDuson

Multimedia

Zack O’Malley Greenburg talks about Empire State of Mind — and why Jay-Z refused to cooperate — on Good Day New York (Video)

Zack chats about his book with Gregg Greenberg (no relation!) on TheStreet.com (Audio) |(Video)

Zack discusses Jay-Z’s humble origins and rise to fame with Michael Noer on Forbes.com (Video)

Zack talks about the rise of Jay-Z on Bloomberg Game Changers (Video)

Zack chats about Jay-Z’s half-billion dollar fortune with The Daily Ticker’s Dan Gross on Yahoo! Finance (Video)

Zack discusses Jay-Z’s business, man, on Canada’s Urban Rush (Video)

Zack talks Jay-Z with Fanny Kiefer live from Vancouver on Studio4 (Video)

Other Mentions & Interviews

- The New York Times

- Sports Illustrated

- New York Magazine

- Reuters

- The Sun

- CBS Bnet

- BET

- Flying With Da Fishes

- Grind & Thrive

- Guest of a Guest

- Baller Status

The Nets aren't Jay-Z's first basketball team.

Selected stories about the business of sports.

Sports Illustrated, 03.22.11
Jay-Z’s First Basketball Team (book excerpt)
By Zack O’Malley Greenburg
Long before the Nets, LeBron James signed up for Jay-Z’s Rucker Park dream team.

AOL Daily Finance, 07.09.10
Feeling the Heat
By Zack O’Malley Greenburg
Why LeBron’s Choice Could Cost Jay-Z Over $5 Million.

Forbes, 03.27.10
Observations from Fantasy Baseball’s Mecca
By Zack O’Malley Greenburg
Inside the 2010 Tout Wars AL-only rotisserie auction.

Forbes, 03.19.10
Forbes Fantasy Baseball Investment Guide
By Zack O’Malley Greenburg
Everything you ever wanted to know about roto in 2010, featuring guest analysis from experts including Scott Pianowski and Ron Shandler.
C | 1B | 2B | SS | 3B | OF | SP | RP

Forbes, 01.06.10
Fantasy Football: The Year That Was
By Zack O’Malley Greenburg
The final installment of my 2009 fantasy football column.

Forbes Magazine, 10.19.09
Inside The Sport Of Segway Polo
By Zack O’Malley Greenburg
Steve Wozniak and a roving band of superstar geeks are challenging the notion that polo should be played on horseback.

Forbes, 09.08.09
Baseball’s Future Stars
By Zack O’Malley Greenburg
Why are prospects like Jason Heyward still languishing in the minor leagues?

Forbes, 06.18.09
Reporter’s Notebook: A Yankee Fan In Enemy Territory
By Zack O’Malley Greenburg
The Fenway Faithful are getting soft. Check out my photo-essay for proof.

Forbes, 04.14.09
Spotlight: Oriole Park At Camden Yards
By Zack O’Malley Greenburg
Attendance may be down, but Baltimore’s ballpark is about more than just baseball.

Forbes, 04.14.09
Who Framed Walter O’Malley?
By Zack O’Malley Greenburg
New York blamed the wrong villain for killing the Brooklyn Dodgers.

Forbes Asia Magazine, 03.16.09
Global Couch Potatoes
By Zack O’Malley Greenburg
Thanks to an entrepreneur who channeled boredom into a lucrative idea, fantasy sports are coming to China.

Recent stories on my travels, from Big Sur to Morocco, Dubai to Sierra Leone (above: snake charmers in Tangier).

Forbes, 01.28.11
A Visit to The Rolling Stones’ Morocco
By Zack O’Malley Greenburg
What does Tangier have in common with the music business? Lots.

Luxist.com, 08.05.10
A Visit to Chigny-Les-Roses
By Zack O’Malley Greenburg
Ever wonder about the origin of those gold bottles that keep popping up in Jay-Z’s videos? This is it.

Luxist.com, 05.09.10
Ma(i)sonry in Napa Valley
By Zack O’Malley Greenburg
The world’s only steam-punk wine tasting room.

Luxist.com, 05.08.10
Nepenthe in Big Sur
By Zack O’Malley Greenburg
The quintessential Big Sur experience.

Forbes, 09.01.09
Canada’s Hidden Travel Gems
By Zack O’Malley Greenburg
Natural wonders and scenic views are close by — or spectacular enough to warrant making the tough trek.

Forbes, 06.16.09
Pan Am’s Second Life
By Zack O’Malley Greenburg
The defunct international airline lives on through collectors like Kelly Cusack.

Forbes, 05.29.09
Reporter’s Notebook: The Merritt Parkway In A Porsche
By Zack O’Malley Greenburg
Let me put you behind the wheel of a brand-new Porsche.

Forbes, 05.22.09
America’s Hidden Travel Gems
By Zack O’Malley Greenburg
You don’t need to leave the U.S. to find exotic or quirky treasures.

Forbes, 04.24.09
The Lost Characters Of New Orleans
By Zack O’Malley Greenburg
Many of the city’s strangest residents left after Hurricane Katrina. Will they ever return?

Forbes, 03.04.09
World’s Most Dangerous Countries
By Zack O’Malley Greenburg
Avoid visiting these places if you value your safety.

Forbes, 03.04.09
Diamond In The Rough
By Zack O’Malley Greenburg
Restaurateur Faysal Debeis is banking on an uptick in tourism to boost his beachside business in Sierra Leone.

Forbes, 03.04.09
Honeymoon In Sierra Leone
By Zack O’Malley Greenburg
Can the former war zone reinvent itself as a tourist destination?

Forbes, 03.04.09
In Pictures: Roaming Sierra Leone
By Zack O’Malley Greenburg
This small African nation is the second-most dangerous spot for journalists. What better place for a Forbes reporter to spend his vacation?