Rapper Kool Moe Dee, whose famous 1981 battle with Busy Bee may be the most influential moment in rap history, is auctioning off some of his royalties. Famous for legendary early '80s singles with his group The Treacherous Three as well as his unprecedented solo work in the later half of the decade that includes battles with LL Cool J as well as tracks like "Wild Wild West," the one later remade by Will Smith for the film of the same name, he's one of very few hip-hop artists to transcend the late '70s pioneer days through the explosion in the late '80s.
Moe Dee's unique perspective on the event horizon of hip-hop culture through the dawn of the rap industry has seen him also have a better understanding of the financial side of what artists are due, whether from the fledgling independent labels in the early days of rap or the major labels that put his music in every record store. Now he's looking to educate the hip-hop nation about royalties through his auction at Royalty Exchange. The auction had a starting price of $36,000 and currently has 33 approved bidders.
With the auction ending tomorrow, we spoke to Moe Dee, as well as Royalty Exchange's Vice President of East Coast Sales Preston Sullivan and Vice President of Marketing Sean Daley about exactly what is up for auction, what the winner is entitled to, and how such an auction is profitable for both the artists and the winning bidders.
What made now feel like the right time to put these royalties up for auction?
Kool Moe Dee: Basically, I never had it broken down to me. I'd have conversations with my comrades of pioneering hip-hop artists, my "frat" as I call them, and we talk about things how the industry changes. I remember if you had a record deal, you get an advance for how much you needed, and once a record company is gone or your deal is gone, in many cases money is still coming in. If you were trying to do something specific like put down on a house, you couldn't get the advance even though money is coming in and you had to wait it out. So, I talked to my good friend Dave Staggs and we were talking about strategy and getting advances to do some stuff.
For the most part, it seemed like an interesting thing to try out. Almost a stock market sort of thing. For most people who don't understand the industry, or understand anything about publishing or writers or royalties or masters, the dollar's broken up into a couple of different ways. Once I found out how safe it was and that I could sell out portions of certain things or aspects of that, I thought it would be interesting to get my feet wet and try it out. It's kind of a trial one for me to see what it looks like, how it comes back and plays out for the end of the year.
So, just to clarify, the auction is for a segment of your royalties?
Kool Moe Dee: I think there's a lot of misconceptions. I'm literally talking about a portion of the writers' share for the most part. This is the writer's portion, the BMI stuff. After a few years, the rights revert back. I want to spread the word that this is something really cool worth looking into. It's like getting an advance on your stuff. I thought it was a safe way to get some money earlier in the year and, like I said, I'm anxious to see how it turns out.
I've noticed a lot of your contemporaries who pioneered hip-hop alongside you, when they signed their deals, they often weren't able to hold on to their publishing or their royalties. What gave you the foresight to hold on to your catalog for this long?
Kool Moe Dee: The gift and the curse is looking at the artists that came before us like James Brown. I was very good friends with Isaac Hayes, who told me he sold his catalog for a million or two-million dollars in the late '70s. Then he went on the radio and said if he'd only known then what he'd known later, he could have gotten a lot more money for it.
A lot of the times, we really don't talk to each other. It's really important that some of the newer artists talk to the older artists because one thing a record company does not do, not that it's their responsibility but it'd be great if they did, is break down the business side of the money. Most of us got our advances and signed away everything, we were so happy, we had no idea what we were doing. What I think saved me was I was in two different eras of hip-hop. That first generation on wax with the Sugar Hill Gang, The Furious Five and my group The Treacherous Three, we were on Sugar Hill Records and Enjoy Records and had absolutely no clue what we were doing. Then, I had a second wind in the second half of the '80s where I was on Jive Records and did some solo projects. That was where I started my learning course on how much is really going into this, who picked the percentage of the writers and what's a publishing deal vs. a record deal. That stuff really made me pay attention differently. That second run is when we became more business oriented, and it's nowhere near compared to what Jay-Z and company are doing now.
Did you ever wind up locking horns with Jive over your share of royalties, or were they pretty accommodating?
Kool Moe Dee: Jive was 50/50. They didn't offer it, but if you asked and pressed the issues (laughs) you get information. And there's certain things that go without saying, quite frankly, the first time I got a publishing check was from Jive Records, which raised the flag a little further. I had no idea and now I've got a royalty check and a publishing check and a BMI writer's check. I was like "How many checks am I getting for this one record?" And that's when I realized how many money streams I had for this one record coming in and what you had access to in terms of what you generated. Did that lead to you contacting Enjoy and Sugar Hill about money you should have received for your previous records?
Kool Moe Dee: That's coming up shortly. What I would say to all artists, there's stuff in all record contracts that people may not know about. You can always get a second bite of the apple. I know there's industry people that aren't happy that I'm talking about this, but I'm telling artists even if you can't go back and do it retroactively, you can still collect money based on whatever it is now. There's tons of deals that have been made, tons of situations like Rhino having some of those records. We have no clue what's going on internationally so that's a conversation what we need to have and going after those things at this point is a very good strategy. At least put your hat in the ring and figure out what has some kind of value. For some of the older guys, you never know what situation they're in in their life financially and even a little bit can still help in many cases. One of the things I choose to do right now is open up these conversations.
So, for an example of how these royalties pay, when Will Smith remade your track "Wild Wild West," how has that continued to generate money for you since its 1999 release?
Kool Moe Dee: Yes, and that was another thing that opened my eyes. When Will Smith did that record, he used Stevie Wonder's "I Wish," Sisqo singing the hook and I'm still on the record underneath that. We had to divide that money up so much. Will being so rich that he didn't need the money and didn't care, it created another conversation where I realized "wow, Stevie Wonder's getting 60% of that song" because they used "I Wish." It can get convoluted, quite frankly, in terms of separating your publishing from your writers, from the master, from the samples, it can get really convoluted. Especially in hip-hop. If you sample a James Brown record, James Brown's now one of the writers. And music writer vs. lyrics writer, it can break down intricately.
What other issues are there for hip-hop royalties as opposed to, say, a rock artist?
Preston Sullivan: We work with multiple artists in all types of genres and have now for several years. We've worked with many hip-hop artists. The fact is, we work with the artists directly, evaluate their PRO [Projected financial] statements and royalties are still royalties. Those are all broken down into the writers' share. We see certain trends, obviously, classic rock and classic hip-hop like Kool Moe Dee have some really consistent royalty scenarios for themselves. They flatten out, which investors love to see. Versus country artists who top the charts all-of-a-sudden and then just crash.
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Who are some of the most memorable royalties that you've auctioned off?
Sean Daley: We've done everything from hip-hop to classical to Disney music to early Coolio to current brand new artists like Zendaya to collaborations with Justin Timberlake to country artists like Travis Tritt as well as animated tunes like "Do the Bartman," which was an interesting auction and sold much higher than its posted evaluation. We really run the gamete. From television theme songs to well known instrumentals you hear in yoga classes, it's really an interesting place. Royalties apply to not just music, but other arenas like renewable energy plays to some oil and gas and we're having conversations about pharmaceuticals and patents. But music is our backbone. It's something everyone understands, everyone has a grasp on and really rings true with out investors.