Jay-Z is not a businessman; he’s a business, man. After giving away one million downloads of Magna Carta Holy Grail through a Samsung promotion, Hov managed to sell an additional 527,000 copies in the first week. Some detractors still doubt his management of big business deals, but let’s not forget Hov has always been pretty savvy at it. With that in mind, we take you back to our 2005 cover story during “The Carter Administration.” Fresh off publicly announcing his retirement, former Features Editor Dave Bry picks the brain of Jay. They discuss everything from the success of Memphis Bleek and Beanie Sigel to his newly appointed position as CEO of Def Jam. Look at him now.


Since he last spoke with XXL, Jay-Z "retired" from rap, took complete control of Roc-A-Fella Records and became the president of Def Jam Records. Needless to say,we have a lot to catch up on, as the Black JFK explains his position on the pressing issues of the past and addresses the future of hip-hop music.

Written By: Dave Bry

Having retired a year-and-a-half ago from his day job as the greatest rapper alive (you can imagine how boring that could get), Shawn "Jay-Z" Carter has been putting his focus elsewhere of late. On top of his co-ownership of Roc-A-Fella Records, Rocawear clothing, the 40/40 Club and Armadale Vodka, he signed a major sneaker deal with Reebok and took a minority stake in an NBA franchise, the New Jersey Nets, which he plans to help relocate to his home borough of Brooklyn.

But early this year, the world got perhaps its best look yet at the intelligence that Jay-Z has. Folks have been predicting the dissolution of the Roc-A-Fella empire since 2002. That summer, while he was on a yacht in the Mediterranean—the first real vacation he'd ever taken, he said—his longtime partner Damon Dash fired a slew of staffers and announced the promotion of an old Harlem cohort, the rapper Cam'ron, to vice president. Jay vetoed the move when he got home, and the rift became public. Over the next year, rumors spread that Jay was leaving the Roc—and its joint venture agreement with Def Jam Records—to start a new label, S. Carter Records, under Warner Bros. Music (Warner Bros. having recently been taken over by Jay's friend and mentor, former Def Jam chief Lyor Cohen.

Last December, the gears went into motion. Jay, Dash and third Roc-A-Fella principal, Kareem "Biggs" Burke, sold the remaining interest in the company to Def Jam for $10 million. But in January, rather than joining Cohen at Warner Bros., Jay accepted a position as president and CEO of Def Jam. Reporting to Universal Music brass Doug Morris and L.A. Reid, Jay got an office at 825 Eighth Avenue, sole control of Roc-A-Fella—which would remain its own entity, in its own name—and, perhaps most importantly, the rights to the masters of the eight albums he released under Def Jam from 1997 to 2003. With this, he ushered in a new era. The Carter Administration, he calls it.

It was quite a coup. But did it come at the expense of Jay's former partners? While they've started a separate company, the Damon Dash Music Group, also under Universal, Dash and Biggs told XXL that they were disappointed that Jay had kept the Roc-A-Fella name, and that he'd tried to use it as a bargaining chip to win full ownership of the masters to Reasonable Doubt, the one album they'd put out before entering their deal with Def Jam.

When we meet Jay in his private office at the 40/40 Club, he's helping an excited employee choose tracks for a mixtape to introduce an artist he's in the process of signing. They wrap it up, the mixtape maker excuses himself, and the savvy prez is ready to talk. As cool and controlled as ever, measuring every word, he breaks it down—all this stuff. And why he invited Cleveland Cavaliers star LeBron James to be on XXL's cover with the rest of his, um... cabinet.

XXL: Who's your new artist?
Jay-Z: He's out of Houston.

What's his name?
I ain't ready to disclose all that information.

Okay, so I guess the first question a lot of people are wondering about is: Why the split with Dame and Biggs?
I knew that was going to be your first question. Like, I'm not in the business to talk about guys I did business with—I want you to print all this—been real tight with, for over 10 years. But since there's so much out there, so much has been said, I will say this one thing: I'ma just ask the people in the world to put themselves in my shoes. However the situation happened, whether we outgrew the situation or what have you, it was time for me to seek a new deal in the situation. While I was doing that, I was gonna leave Roc-A-Fella Records, and if anybody can imagine building something from nothing, and being the main driving force for that, and then having to leave all your legacy and everything behind, I know that'd be a tough situation for anyone. While I was seeking out another deal, whether it was with the S. Carter Records or what have you, there was a deal on the table to be the president of Def Jam, continue running Roc-A-Fella, CEO-president of Roc-A-Fella also, and get all my masters back. But since I was the one that wanted to leave, I was like, let me try to figure out some way where everyone can be happy. So I said, let me have Reasonable Doubt. It's not a money thing. Reasonable Doubt, if you look at it, it sells, whatever it sells in catalog. Maybe a hundred thousand a year.

It's very little money, but it meant everything to me because it was my baby. It was my first one. And it was also more of a principle thing: Just give me something, something to walk. Something to hold on to. I don't wanna walk away from Roc-A-Fella RecordsÐif you can imagine thatÐwith nothing... So I was like, let me get Reasonable Doubt and I'll give up [the rest of] my masters. I'll give up Roc-A-Fella, I'll give up president and CEO of Def Jam Records—everything. Just give me my baby to hold on to so 10 years down the line, I can look back and I got something—I'm not empty-handed. And I was the one being offered everything. I thought it was more than fair... And when that was turned down, I had to make a choice. I'll leave that for the people to say what choice they would've made. That's about it. I don't really wanna talk about Dame or Biggs. I don't have nothing negative to say about them.


A lot of people look at the Summer 2002—when you were away on vacation and Dame brought Cam'ron into Roc-A-Fella and gave him the VP position—as the moment. Everyone went, "Uh-oh, here comes the split." Is that legitimate? To see that as the moment when things crystallized?
Um...I would guess yes and no. I'm not a petty person, but I can say maybe it was one of those things. Just ask the question back: If you're on vacation and you own a record company and someone makes, or says they're making, a move like that... 'Cause if you ask Dame, I think he'd regret that. And I think what he was trying to say was—and I don't really want to speak forhim, he has to speak for himself—but what I think he was trying to say was, he wants everyone to be vice presidents. And then people ran with it and took it that way, and it really got outta hand for the most part. But for that to happen when you're on vacation, you'll feel a way. But to say that's the direct reason for us going and doing different things? I just think that was inevitable. We all bosses. I like the analogy, although it's petty, but it's real: We all bosses, but there's only one presidential suite. If we in a hotel, somebody gotta move to another hotel. It ain't as simple as that, but it's sorta like that. We all bosses. We have a lot of things to do. In the beginning it was one common thing. It was Roc-A-Fella. Now it's so many different things. Rocawear. Armadale, It was so many different things that we had to focus on that it would naturally draw us apart to do different things.

You're a boss, but you're an artist, too. If you had to choose, how would you want to be remembered, as artist or businessman?
If I had to choose, that's an easy choice: I'm an artist in my heart. I'm an artist first. Without my artistry, none of this would be current right now. No Reebok deals, no ownership of the Nets. It was all because of my artistry. I'm not a sneakermaker by trade. I don't love that. I mean, I love being fresh, but I'm an artist by trade.

So when's the next Jay-Z album? Are you going to make another one?
Naah. Hell nah.

So, you're still retired? Just from making albums.
Just from making albums. I still make songs. It bugs me when people say, "I thought you was retired." I clearly said—and I also said that I'm human. So maybe one day if I'm on the corner and it's calling me—I don't wanna just box myself in where I can't make another album—I'll do it anyway. But it bothers me when people say, "I thought you was retired," if I make a song or if I do a verse on somebody's joint. I never said I wasn't making anymore music. I should've shut up. That's what I should've did. Me and my big mouth.

You said you wanted to find a different situation from Roc-A-Fella. What were you looking to find in a new situation?
I guess it's a fresh start. Just a fresh start. To start all over without any complications, without anything. I'll just say a fresh start.

Was it a matter of being unhappy with the way Roc-A-Fella was going?
I just wanna say we outgrew the situation. We all bosses. And as all bosses, we like different things. And it's nothing wrong with that. Everyone's doing wonderful, great. No one's kicked out on the streets. No one's starving, you know what I'm saying?

Was it a matter of wanting to get more into things like sneakers and basketball? Get away from music?
Nah. If it was to get away from the music, I would've just stepped away from the music. I'm not here...this isn't paying my bills. It's great money, but it's not... I'll probably, from what I do, I'll probably lose more money here, 'cause it takes a lot of my time that I could be out doing other things. It was more so about... I don't know. It's just the next chapter. This insures the success of an artist through music—through not being able to get a deal, to having your own label, to running a major like Def Jam. Who knows what's next.

And with Dame starting his own label, also under Universal—you're cool with that?
I think that's great. Like I said, no one's kicked out on the streets.

I think there's a perception that, at Roc-A-Fella, you were the artist, you handled the music, and Dame handled the business stuff. Is it a matter of trying to prove—
I don't really have to prove anything. Dame is a great businessman. That doesn't mean that I'm not a businessman because I'm a great artist, or perceived as a great artist. That's for the people to say [Laughs]. I mean, I've been through a lot worse things in my life. I think I can sell CDs [Laughs]. I think I can do that. I think I know how to do that.

You've spoken in the past about how difficult it was for some of the artists that were under you at Roc-A-Fella to sell records. Guys like Memphis Bleek and Beanie Sigel.
I mean, relatively, 'cause they've all sold records. People think that having a gold album is a failure nowadays. I remember before, it was like the greatest thing in the world. A gold album, that's 500,000 people. People fail to realize Bleek's highest-selling album was 900,000. He was right at the door of platinum. Beans too: seven, 800,000, his highest-selling album. So, they doing great numbers. Not nowhere near Vol. 2, which was my highest-selling CD, like 5 million records. I think that it was a gift and a curse. They was getting the recognition of my celebrity, but it was also the weight of my celebrity. Like, "That's not a Jay-Z album."

At a certain level, especially at the corporate level that Def Jam is at, there seems to be less and less room for artists that sell 350 or 400,000 albums. Like, everyone needs to be going platinum or artists get dropped. Isn't that the way the music business is nowadays?
Only because we push the cost of doing business up so high. The making of albums, I've seen budgets over $3 million. That's just outrageous. I made Vol. 2 for $350,000, sold 5 million records. So, spending more money doesn't mean—people get excited about getting million dollar deals. But like, you just really putting yourself up against the 8-ball. Because what happens is, you get a million-dollar deal, and then you get a video, 750, whatever the video cost. That money's coming back. And now you have to make that money up. So when you don't hit that first-week SoundScan, the project gets shut down. 'Cause the marketing was set up too high. The cost of doing business is so high that companies gotta tuck and run when it's getting too hot. "Oh, that's it. We can't keep spending money on this. We don't know...we gotta leave." So we have to bring the cost of doing business back down. It's too hot.

Are you going to try to scale back at Def Jam? Is that possible in this environment?
It's tough, because artists are spoiled. But they gotta know the reality of the situation. Just because you don't get a million-dollar deal doesn't mean you're not worth a million dollars. Let's work together. Let's spend less on an album so we can make a artist out of you, instead of one video and you gone. A case like a Joe Budden last year. If the money spent was low and the videos were low, they would've been able to go further in that project.

With you controlling both Roc-A-Fella and Def Jam, do you think there's gonna be any problems with people thinking that you're not working as hard on the Def Jam-

Yeah, favoritism.
Well, anyone that knows me knows that I'm a very prideful person. And my reputation's on the line at both places. If I'm successful at Roc-A-Fella and not successful at Def Jam, it's like it's a failure for me. I want everybody to be successful equally. I've just never been that type of person. Guys had that faith in me to bestow that type of position on me. I'm not gonna take... I believe in Def Jam and the culture. I grew up watching Russell Simmons and these guys. I wouldn't take that for granted.

The longtime Def Jam artists, have any of them expressed concerns to you about that?
It was never said in words, but it's only natural to feel that way. But I'm not here to play those types of games. I didn't take the job to play with their careers. This is how they feed they kids. I'm not playing with them like that. I wouldn't want nobody playing with me like that.

What are some of the things you've done in the first couple of months on the job?


I mean, the first thing I did was reach out to the artists that were on the label. I had some type of dialogue with them. I'm a person that they can relate to more, 'cause I've been through the things they've been through. I wanted to get a deal, couldn't get a deal. I wanted to hear my record on the radio. I jumped up and down when my record first got played on the radio. So, I'm really there to just really share my experiences with them, you know what I'm saying. I'm not there to be anybody's "boss." I'm really there to move the culture forward, make great music and show that we, as artists, can ascend to an executive level. My man called me and said, "The inmates are running the asylum now." I love that saying. Maybe you should put that in the tag line or something.

Do you feel pressure from the executives at the parent company?
The great thing about that, Doug Morris was an artist. I think he wrote songs and was a drummer back in the day. So it's all art. Jimmy Iovine is a producer. L.A. Reid is a producer. So it's all music guys. I'm here to be smart and be prudent about the budget and shit like that, but at the same time, to not compromise the art because of it. I'm an artist. I'm artist-friendly. There's no way I can be boss there and be expected to be a corporate guy. They might as well kick me out the building now. You know what you're getting. So, if in three years I've lost the company $100 million, I'll have made some great records. Just know that.

What if you're put in a position where an artist's making great music that you like, doing everything that they can to sell, and it still doesn't sell. What if you were put in a position where you had to cut an artist?
I mean, as with anything, I believe an open and honest conversation is the best way to go. I can only be honest with them. If there's something, and we're throwing money at it and we're losing money and losing money, then it is what it is. I'm not manipulating the numbers or anything like that. It's in black and white. It is what it is. It's just the reality of the business. I find those conversations very easy usually, because it is what it is. It's math.

A guy like Bleek—would you give him more leeway due to the personal connection?
Bleek, of course. Because I took him out of his house when he was 15 years old and put him on the road. That's natural. Outside of that, it's the business. Even with Bleek, I can't be foolish because it wouldn't be fair to everybody else. I'm not gonna spend a million dollars on Bleek and $500,000 on the Young Gunz. I gotta do the same thing for Bleek that I do for the Young Gunz, that I do for Ghostface, that I do for whoever.

It seems like that sort of rational thinking has been a key to your success-making decisions based on logic rather than emotions. You've spoken about certain mistakes you've made in the past, moments when you've let that get away from you. Like you said, "Wow. Three seconds could have changed my life..."
Right, and I'm a person that's aware of it. So, it shows you how important being logical about situations is. So absolutely, I try to think about every situation logically and devoid of emotions. That doesn't mean that I'm a robot or anything. I'm a human being. But even if I'm upset, I try to calm myself and look at the situation. Because like I said, I'm a person that's aware of it and it can still get outta hand at times. So, imagine people just running around off the hook. That's how some people get locked up, and get dead.

The music business has a reputation for hyper-competitiveness. Like, you need to screw somebody else over to make money. Or, you can only make money at the expense of somebody else losing money. Does that come into play with you?
Well, I came from the streets. That's the same game, but with peril included. I've never been that type of person to do that type of business. I just believe in doing your best work, and that's it. I don't worry about outsiders. I honestly believe that if we do the best job that we can do, nobody can touch us. We don't have to spend our energy trying to backstab the next boutique label, trying to block the other major. We just worry about ourselves. As long as we have the best product, it speaks for itself [Laughs].

Have you seen that kind of backstabbing in your years in the business?
Of course. I mean, but that's anything. It's a table full of money and people are fighting for the same money at the same table. That's how it goes. Some people take unethical approaches and some people are gentlemen about it. This is the saying that will tell you about me and my approach to it: I love to win, I don't hate to lose. There's a difference. When you love to win, you wanna beat the other team when everyone's at their best. Some people be like, "Damn, I want Michael Jordan to be injured so the Knicks can win." That's terrible. I don't even want that win. That's just me. I love to win. I don't want a game by forfeit. I don't want none of that. I wanna beat your best team. That's loving to win. Hating to lose is when you cheat, you want someone to be injured. Anything other than winning when the other person is at their best is hating to lose.

Now that we're talking about basketball—
Don't cut that out, that's a very important mantra in my life right there. That's a key point. That's a big thing right there.

What's happening with LeBron James? Are you trying to get into business with him?
No, he's a friend of mine. That's it, nothing more. A young guy coming up, grew up looking up to me, and that's it. I give him advice like I would give anybody else. I can't do nothing with him. I have a stake in the Nets. I can't do nothing with LeBron James, nothing. It's silly to even say. It's silly. There's no such thing as Def Sports Management. There's no such thing.

With your stake in the Nets, though, it'd be great to get him to Brooklyn, right?
Of course. I mean, I would love to get him to Brooklyn. I'm an NBA owner. I would love to have LeBron James. But like I said, I love to win. I don't have nothing behind the scenes. I'll pay my money like anybody else. That's it. If we got a great deal and he wants to come to Brooklyn, great. If we don't have enough money—or a team in place where he can win a championship, 'cause that's important too—he'll go somewhere else. He'll still be my friend... It is what it is. Life is very simple if you pay attention. It is what it is. It's not complicated. People make it more complicated than what it is.