Diamond in the Rough WHAT SETS MASTER P APART FROM OTHER HARD-CORE RAPPERS? HE'S A MASTER MARKETER WHO OWNS HIS MUSIC AND BUILT A HIP-HOP EMPIRE AROUND NO LIMIT, THE HOTTEST BRAND IN THE BUSINESS.

By Roy S.Johnson
September 27, 1999
(FORTUNE Magazine) – Let's ignore for the moment the gold teeth, the jaw-dropping $100,000 diamond-encrusted Rolex, and the pinkie ring with a gem cluster the size of the Louisiana Superdome. Don't dismiss rap mogul Master P because he travels with an entourage of boyhood friends and relatives, some of whom speak freely of their years behind bars. As difficult as it may be, try not to turn a deaf ear to his music simply because the songs contain lyrics that would make Larry Flynt blush.
Forget that stuff. This former street hustler from the deadliest public-housing project in New Orleans is more than mere flash and brash. He's a popular rapper, a sought-after actor, a 6-foot 4-inch near-NBA caliber basketball player, a successful record and film producer, an enterprising fashion and toy entrepreneur ("Ya heard me?" the Master P doll roars), and founder of perhaps the most scrutinized sports agency ever. He may also be the most intriguing executive in the music business. He's a master marketer who built an entertainment conglomerate around the hottest brand in the scorching rap industry--the appropriately entitled No Limit. (And he makes FORTUNE's debut 40 Richest Under 40 list with his net worth of $361 million.)
Never heard of No Limit or seen its audacious symbol, a military tank smothered in (you got it) diamonds? Then go ask your kids. Yes, your kids. Chances are they're listening to the often profane, always edgy "bounce" grooves of Master P, Snoop Dogg, Mystikal, Mia X, Silkk the Shocker, C-Murder (the last two happen to be Master P's baby brothers), or one of the other artists on No Limit Records. No Limit sold 26 million records in 1998, more than any other rap label--and don't think for a minute that all those records were sold only to urban (read: black) youth. The company's research shows that a significant portion of its records are being bought in cities without a large black population. "My audience is anybody who's looking for something different--young or old, black or white," says Master P. "If [my record] sold six million units, then I sold to corporate America's kids too."
Your kids may have also seen a No Limit film--maybe one of its direct-to-video movies, like I'm 'Bout It, Da Last Don, or Da Game of Life. Or perhaps a theatrical release like I Got the Hook Up or Foolish, which had box-office sales of $12 million and $8 million, respectively. Not quite Blair Witch numbers, but for movies produced for about $2.3 million each, hugely profitable.
Maybe your kids wear something from Master P's MP Clothing line, which is expected to generate about $10 million in sales in 1999. Perhaps they own a pair of his funky signature sneakers, the Converse MP3. Or maybe a No. 34 New Orleans Saints jersey belonging to star sports client and rookie running back Ricky Williams. They may download No Limit sounds from the Website MP3.com, which paid the label $2.5 million in shares in exchange for 100 previously released songs. And get ready for this: No Limit Toys, available online by early next year. In fact, your teenagers just may call themselves No Limit soldiers, claiming a brand loyalty shared by millions of young consumers eager to buy the next No Limit thing simply because it's a No Limit thing. No wonder Master P often says, "It's all good in the 'hood."
It's all good because Master P eschewed the path chosen by other members of the hip-hop elite--guys like Sean "Puff Daddy" Combs, Kenneth "Babyface" Edmonds, and the dean of them all, Russell Simmons--by refusing to form a "boutique" label in a joint venture with a major record company. Instead he built his own business, his own way, and in his own time. In fact the head of No Limit's various enterprises--each division is actually a separate privately held company--has succeeded with a surprisingly sound fiscal strategy and has attracted a cadre of enterprising young executives to help him manage the company's meteoric growth. He hired people like 33-year-old Tevester Scott, the tall and flamboyant head of No Limit Records (and until recently, No Limit Sports), who favors custom suits in outlandish colors; Stevie "Black" Lockett, 34, co-head of No Limit Films, who talks freely of his two stints in prison on drug charges ("I was young, living in the 'hood, and stupid."); Jeff Clanagan, 38, the other co-head of No Limit Films, a former hip-hop concert promoter; and No Limit Sports head (and general counsel) Edwin Hawkins, a 32-year-old ex-Marine with a penchant for brim hats. Each was drawn to No Limit by Master P's enticing dare: "I'm growing something," he said. "Either you believe or you don't."
Now if you stumbled over "sound fiscal strategy" while pondering that Rolex, this may surprise you: One of Master P's primary business tenets is, Don't spend money you don't have. An example: During No Limit's early days, Master P didn't have the $500,000 to $1 million that big record companies routinely sink into lavish promotional music videos. So he produced them on the cheap for around $100,000. He also figured out a way to promote his rap artists and make money too. No Limit used profits from its music division to produce low-budget direct-to-video features starring No Limit artists, then sold them to loyal No Limit soldiers. The first effort, I'm 'Bout It, released in 1997, cost just $200,000 to make, and looks it. ("P and I held the lights and cameras for each other as the other said his lines," says Anthony "Boz" Boswell, P's lifelong friend and now No Limit's vice president of operations.) No matter. To date it has sold more than 288,000 copies at $19.95; that's nearly $5.7 million in revenues.
Master P's video strategy also reflects another business tenet: Capitalize on your cross-promotional opportunities. And he does it like nobody in the music business. No Limit video films contain trailers promoting upcoming No Limit record releases and concerts. And liner notes tout yet to be released records from other No Limit artists, something few record labels did before No Limit. "Once you develop an audience, you take everything you've got and milk it," says Master P. "So if I'm successful on the music side, I'm going to take that success into the film business and rap to that same audience. That's my key to success. I have a record that's big, and I'll put the music in the movie. If I have a movie that's hot, I'll put new music from it on my next record track. It keeps my overhead down."
Today No Limit artists still appear in movies produced by No Limit Films, record soundtracks for No Limit Records, and appear in increasingly glitzy music videos (produced in-house by young No Limit directors-in-training), all while draped in No Limit logos. "[Master's P's] brilliant," says an executive at Combs' Bad Boy Entertainment. (On his new CD, Combs paid Master P the ultimate compliment: "Master P, you're a bad mothafukka.") "He's built a brand that's the Coke, IBM, or McDonald's of hip-hop. When people see the No Limit CD, they say, 'I don't know what I'll get, but if the tank's on it I know there's something for me.' Sony will never sell a CD because it's put out by Sony. Whatever the magic, it works."
Now, I'm not going to lie: Chasing and hanging with Master P and his crew during the past few months damn near killed me. No Limit's chief executive seems to have limitless energy. The 29-year-old entrepreneur says he sleeps seven hours each night, but a day I spent with him in Los Angeles provided no corroboration. It began just after 7 A.M. and ended (at least for me) when I left P, other No Limit executives, and several assorted compadres at a recording studio at 2 A.M. In between, Master P took reports on a meeting earlier in the day with MP3 executives, played some intense basketball (he's obsessed with making the NBA this season), listened to proposals on possible feature film roles, hosted a press conference introducing the Converse sneaker, and taped a segment of Byron Allen's syndicated entertainment show. He arrived at the studio around 10 P.M. Before I left him there, he met with promising No Limit rapper Mercedes to discuss, among other things, the outfits she would wear in the video promoting her debut album, Rear End. "It has to be sexy," he said, handling various sample thongs, "but [your character] ain't a ho." He also spent a few minutes with the sister of Baron Davis, a UCLA point guard who was entering the college draft, in an effort to woo the player into signing with No Limit Sports. (Davis later signed with another agent.) Sitting in the studio's lounge moments later, decked head to sole in No Limit gear, Master P said: "The business challenges get me more excited than anything. Anybody can be a performer, but I've seen a lot of people put a record out just to be famous, know what I'm saying? They can have that. To control the business and make things right, that's what gets me excited."
The thrills of Master P's youth were of a different sort. He was then Percy Miller, raised with four brothers and a sister by their paternal grandmother in the notorious Calliope projects in New Orleans' crime-infested third ward. Hope had abandoned Calliope long before Miller arrived. Still, his grandmother worked several jobs so that the children could have the things she never did, including a private school education at St. Monica Catholic School across the street. Boz, his best friend and schoolmate, remembers Miller as a natural leader with a powerful drive to make something of himself. Boz's favorite story takes place on a basketball court at Calliope where the lights had been shot out with guns: "Basketball was his dream, like it was for all of us. But he was more dedicated. Played 24-seven. One night I was coming from the gym, walking by the court, and I'm seeing a shadow just shooting in the dark. You know what I'm saying? It's P. He's about 12 or 13, and it's pitch black out there. All I hear is them chains snapping--chang, chang. You know we didn't have nets. I just heard them chains. I said, 'Boy, you practicing now?' He said, 'Yeah, man.' He wanted out bad."
Getting out seems so random in places like Calliope. The narrow path of a bullet can make the difference between those who make it and those who don't. That's how Miller lost his younger brother Kevin. P says the loss changed him. "It made me say, 'It's time to get your life together. I've got to make sure [Kevin's] son is taken care of. I've got to make sure my mom is taken care of. She can't lose any more kids.'"
Miller's first foray out of Calliope--and toward a future where he could help his family--was to the University of Houston. A basketball walk-on, he injured his knee and never played for the school. Then, at age 20, another tragedy gave Miller an opportunity to change his life. A New Orleans hospital settled a negligence claim brought in the death of his grandfather; Miller says he got $10,000 of the money. With it he moved to be near his mother in Richmond, Calif., and open a record store--the original No Limit Records. In the early '90s rap was riding high on the strength of hard-core artists like Ice-T, Tupac Shakur, Ice Cube, and Biggie Smalls. Nearly all rap stars were based in New York or California, which inspired the senseless coastal feud that likely led to the violent deaths of Shakur and Smalls. Miller was from the South, a rap neutral zone, as it were. He knew his customers were missing out on something--the sounds popular back in his hometown. "We had a big bounce style down there that they didn't have nowhere else," he says. "There were some real great bands with music that was unique."
Confident that he could make it big with that sound, Miller spent about $1,000 to produce The Ghetto's Tryin' to Kill Me, his first CD. He then closed his store and took off in his car to sell Ghetto. He sought out his customers in some rough inner-city neighborhoods along the journey through Texas and into the South. Not surprisingly, he often ran into gang members protecting their turf. "I told them, 'Hey, I'm not a criminal, blood. I just want to sell music,'" says Master P. "They respected that." One tactic was to roll up to the fanciest car, the one blaring the loudest music, and give the driver a CD. "Just to get the buzz started," says P. He sold more than 100,000 Ghetto CDs. He made 99 Ways to Die the following year, and sold twice as many.