Russel Simmons is negotiating to sell Def Jam to Universal Music Group
Russell Simmons, of Def Jam record label fame, is negotiating to sell his Def Jam hip-hop music empire to Universal Music Group, music sources said yesterday.Insiders say that Simmons is seeking $90 million and $110 million for his 40% stake in the label which housed many of the greatest hip-hop artists to touch vinyl, including Run DMC, LL Cool J, Public Enemy, Jay-Z, and Redman.
The Def Jam talks are part of a broad corporate restructuring at Seagram-owned Universal, which is merging with music giant PolyGram, to create the world's largest music company.
PolyGram owns a 60% stake in Def Jam and distributes the rap label. The company previously was in negotiations to buy out Simmons and his long-time partner, Lyor Cohen, for $60 million — but the deal fell apart last March.
By snapping up Def Jam, Universal would lock in its position as a dominant force in rap, the fastest growing segment in the music business.
As part of the deal, Universal also has offered Cohen the president's post at the company's Universal Records label, music insiders said.
Simmons, 41, denied discussing a sale of Def Jam with Universal. "Right now we are focused on selling records," he said.
A spokesman for Universal declined to discuss the matter.
Simmons — who founded Def Jam 15 years ago and went on to create a multimedia hip hop empire with interests in fashion, magazines, films and TV — would likely remain with the company if he sold his stake.
"Def Jam is my life's work; I would never leave," Simmons told the News.
The hip-hop mogul is poised to cash out at a high point.
The label, which has a 1.5% share of the album market, is on a hot streak with three CDs among the top 30 in the country, including the No. 1 album from rap artist Jay-Z. According to Def Jam execs, the label is expected to post sales of $180 million this year.
"They are probably hotter than they've ever been," said Cory Robbins, president of independent record label Robbins Entertainment.
For Cohen, the hot streak and possible sale of Def Jam mark a sharp reversal of fortune. Just months ago, the rap executive was on the verge of being forced out by Def Jam's prospective new owners, PolyGram.
-- Midknight - 11/10/98