'Big Payback': How Hip-Hop Became A Cash Machine

The Big Payback

Thirty years ago, hip-hop was background noise at small house parties in Harlem and the South Bronx. Now, it's a multibillion-dollar empire. A new book, The Big Payback: The History of the Business of Hip-Hop, tells the story of the genre's humble beginnings — from one person behind a few turntables and a microphone — and how it morphed into a way of life, with designer clothing lines, political movements and vast wealth.

"Sometime in the middle to the end of the last decade," author Dan Charnas tells NPR's Guy Raz, "BusinessWeek estimated that the hip-hop business had grown to, on the music side, about $1 billion a year, and on the fashion side, $2 billion a year."

But in the early days of rap, a lot of the money stayed with the label owners, not with the musicians. Charnas notes that some hip-hop dignitaries railed against "how onerous recording contracts were and how tilted the relationship was between artists and record companies."

One of the key figures in hip-hop's shift in wealth was a most unlikely hero: Wendy Day. In his book, Charnas writes: "Few on first glance would have taken Wendy Day for a rap fanatic. She was white, overweight, and, at the age of 30, old for a hip-hop head."

Day took a personal fortune of about $500,000, and working with a team of lawyers, extricated some of her favorite hip-hop performers from their imbalanced contracts. But she went even further than that.

The Big Payback: The History of the Business of Hip-Hop
By Dan Charnas
Hardcover, 672 pages
NAL Hardcover
List Price: $24.95

Read an Excerpt

"She becomes instrumental in the landmark deals that Master P landed in the 1990s, Eminem, a label called Creator's Way got a deal with Atlantic Records that The Source called the best deal in the history of black music," Charnas says. "The biggest deal she ever did was for a label that has a lot of currency right now called Cash Money. They did an unheard-of deal with Universal for 80 percent of the wholesale price and a $3 million advance against records that they haven't even sold yet."

Day's efforts signified a shift not only in the business of hip-hop, Charnas says, but in the very balance between the races.

"For the first time," he says, "black artists were really not only embracing but insisting on their own self-worth."

Excerpt: 'The Big Payback'

The Big Payback
The Big Payback: The History of the Business of Hip-Hop
By Dan Charnas
Hardcover, 672 pages
NAL Hardcover
List Price: $24.95

In 1979, Sugar Hill Records, a small, Black-owned company, became the first to release a hugely successful rap record, "Rapper's Delight" by the Sugar Hill Gang; and would over the next few years record many more rap hits. In the early 1980s, most major music companies paid hip-hop no attention, leaving the field to small-time, independent operators like Sugar Hill. Below is a story from The Big Payback about another one of those small labels that dabbled in rap, and won. Profile Records would eventually go on to sign Run-DMC, rap's first true mainstream superstars, and land the first rap video on MTV.

When Cory Robbins and Steve Plotnicki decided to open Profile Records in May of 1981, they each borrowed $17,000 from their parents. With the $34,000 in start-up cash, they rented a room for $700 a month in a building on the corner of Broadway and 57th Street, just blocks from the Brill Building and 1650 Broadway on one end, and the offices of Sugar Hill partner Morris Levy on the other. West End Records, their soon-to-be com- petition, was upstairs.

Running a record company wasn't like they thought it would be. Plotnicki never got around to writing songs, and Robbins didn't end up producing. Instead, Robbins handled talent scouting and promotion. Plotnicki, with his experience at the distributor, took care of sales and manufacturing.

For its first single, Profile Records paid $3,000 to license a disco record from England called "I'm Starting Again." It seemed like a good idea: The singer, Grace Kennedy, was a TV star in the U.K. But in America, her record flopped, selling only a few thousand copies.

Profile's second record was the label's first rap release. Robbins made a deal with his former Panorama artists, the Fantastic Aleems, who had already put out a 12-inch single on their own Nia label with a young Harlem rapper, Lonnie Love. The reissue, called "Young Ladies," cost Robbins and Plotnicki a very uncomfortable $5,500. The track was a replay of Cheryl Lynn's "Got to Be Real" — a dance hit which, like "Good Times," was ripe for a rap sendup in the tradition of "Rapper's Delight." Another good idea, and it flopped, too.

Robbins then licensed a second record from England, a dance-infused medley of the Four Seasons' greatest hits recorded by Gidea Park called "Seasons of Gold." The song seemed to be another safe bet. But by the time he had closed the deal on "Seasons" in October 1981, Profile was in peril.

Profile Records' founders hadn't drawn salaries from their fledgling company. To survive, they were still collecting unemployment checks, illegally. But between the costs of licensing and commissioning the records, pressing and shipping them, along with their overhead — rent, electricity, phones —  they were down to their last $2,000.

For a moment, Robbins and Plotnicki considered asking their parents for more money. Instead, they decided to gamble the rest on one more record. Plotnicki suggested a rap version of "Genius of Love," the new record by the Tom Tom Club.

One of the dominant club tracks of 1981, "Genius of Love" was a successor to Blondie's "Rapture," a product of the collision of uptown and downtown cultures happening in New York. A funk record conceived by Fab Five Freddy's friends Tina Weymouth and Chris Frantz, "Genius of Love" was embraced enthusiastically by young Black kids who had never heard of Weymouth and Frantz's other group — the new-wave band Talking Heads.

"Genius of Love" was an inspired candidate for a rap remake. But Plotnicki and Robbins had to move fast. Another label, like Sugar Hill, was sure to come out with their own version. And Profile's rent was due.

First, Robbins called his old friend Joe Tucci, who had recorded a huge disco hit called "Keep on Dancin'," right out of his own sixteen-track home studio.

"Joe," Robbins asked, "can you record an exact replay of 'Genius of Love'? "

No problem, Tucci answered. Robbins offered him $750 for the entire project.

Next, Robbins called Island Music Publishing to secure the rights to re-record "Genius of Love." They would pay Island ten cents per record sold, a rate mandated by U.S. law.

After that, Robbins called the only rapper he knew: Lonnie Love.

Before he met Cory Robbins and Steve Plotnicki, Alonzo Brown had never had a real conversation with a White person.

Brown had grown up in the DeWitt Clinton housing project in East Harlem with his mother, Margaret, and older brother, James. Their father, Baxter, had died of heart failure when Brown was only fourteen. An older Puerto Rican girl who lived in the building, Miriam, took pity on the Brown brothers — both quiet boys who mostly stayed inside and played records. She took them to the ice-skating rink at the Harlem Meer, just a few blocks away in the northeast corner of Central Park.

The rink became an obsession for Alonzo and James, who kept sneaking in until they got caught. The foreman of the rink, Mr. Johnson, cut them a deal. "People are complaining about the music here," he said. If the Brown brothers came in and played records for the crowd of kids, he would let them in for free.

Alonzo and James formed the Lasker Skate Crew, hauling records to the rink every Saturday. They even got a grant from the city to purchase speakers, which they did on Canal Street from none other than Mr. Magic, who still worked at S&H Electronics while broadcasting his rap radio show on WHBI.

On the night Brown went to Harlem's Renaissance Theatre and saw his first rapper — Lovebug Starski telling the crowd to scream, "Oh, yeah!" and seven hundred people responding in unison — he knew he wanted that kind of power. Brown began writing rhymes and practicing them in the hallways of Charles Evans Hughes High School with his classmate, Andre Harrell. Soon Brown and Harrell were writing routines together. While Brown focused on the substance of the lyrics, Harrell was concerned with style — clothes, hair, presentation. Harrell was also good with marketing — hustling for gigs, getting into the mix — and he insisted they needed a gimmick.

At first Harrell and Brown billed themselves as "the Lone Ranger" and "Tonto," but by the time they finally started to perform at clubs and community centers around East and Central Harlem, they were calling themselves "Dr. Jeckyll" and "Mr. Hyde," respectively. They sported mustaches, wore pants from A. J. Lester's men's shop on 125th Street, Cortefiel coats, and sneakers called Playboys. Alonzo was the taller of the two, standing a lean six feet even, not including his Afro. His girlfriend, Wanda Majors, had even made herself a sweatshirt that read, "Mrs. Hyde."

By the time they made it to the rapping contests at Harlem World on 116th and Lenox, Dr. Jeckyll & Mr. Hyde were the neighborhood favorite. They even recorded a few routines that ended up on 12-inch records for two small uptown imprints, Rojac and Tayster, run by Harlem World's owner, "Fat" Jack Taylor. At Harlem World, Alonzo Brown's lyrical abilities caught the attention of two huge, muscled twin brothers, Taharqa and Tunde Ra Aleem. The Aleems were accomplished musicians who had shared an apartment with Jimi Hendrix in the 1960s and collaborated with him on a few projects, even contributing backup vocals to his song "Dolly Dagger." By 1980 the Aleems were already accomplished recording artists and had an R&B hit on their label, Nia Records, called "Hooked on Your Love," reissued by Panorama Records after being signed by its young general manger, Cory Robbins.

Alonzo Brown adopted a solo moniker — Lonnie Love — and cut "Young Ladies" for Nia, giving his partner, Andre Harrell, label credit for helping with the lyrics. Meanwhile, Robbins had told the Aleems that he had started a new record company and was looking for music. The Aleems took Brown to meet Robbins and his new partner at Profile. This new label with the downtown office seemed like the big time, and Brown was nervous. He was surprised to see that Robbins and Plotnicki were, too. The two White guys tried to project confidence, but he suspected that they didn't know what they were doing.

"Young Ladies" sold a few records — in Florida, for some reason — and then quickly went away. Brown grew restless. He didn't want to spend the rest of his life in East Harlem. By the time he got a call from Robbins in October of 1981 asking him to rap on another record, "Lonnie Love" had already enlisted in the air force.

But Alonzo Brown agreed to make the record anyway, and asked if he could record the song with his partner, Andre Harrell.

Printed with permission from The Big Payback: The History of the Business of Hip-Hop by Dan Charnas, NAL Books, copyright 2010.

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The History of the Business of Hip-Hop

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