Steady on, Dr. Dre, you might not become a billionaire just yet

Not so fast, Dr. Dre!
Not so fast, Dr. Dre!
Image: Reuters/Mario Anzuoni
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News of a pending $3.2-billion deal (paywall) to sell the Beats Electronics company to Apple may be nuthin’ but a G thang for the company’s co-founder, Dr. Dre. But a billionaire thang? Maybe not yet.

In a giddy (and NSFW) YouTube video, the actor, singer and Dre-buddy Tyrese Gibson heralded his friend’s ascension to the “billionaire boys club” and announced “the Forbes’ list just changed.” Similarly breathless articles like this NBC News post heralded Dre as the “world’s first billionaire rapper.”

Sure, the multi-millionaire rapper and producer, who helped launch Beats, is in line for a juicy payday, if the blockbuster deal with Apple is consummated. It seems unlikely, however, that the good doctor of hip hop from the streets of Compton, California will soon be breathing the rarefied air of billionaires.

The reality is that Dr. Dre, otherwise known as Andre Romelle Young, will probably be at least $120 million short of billionaire territory. The most recent estimates from the aforementioned Forbes list pegged Dre’s net worth at $550 million, with Beats at an estimated valuation of roughly $2 billion. Basic back-of-the-envelope math indicates that Dre holds at most a 27.5% or so stake in Beats. (That’s assuming that Dre’s entire net worth is tied up in the growing music empire that he kicked off with music mogul Jimmy Iovine six years ago to sell pricey headphones, which can run as much as $400 a pop.)

At Apple’s reported $3.2-billion sticker price for Beats, Dr. Dre’s stake could now be worth as much as $880 million. That’s nothing to sneeze at, and certainly the kind of money that would see Dre eclipse another rap entrepreneur, Sean Combs. Combs’ net worth, according to Forbes, is $700 million–putting him at the top spot among hip hop moneymakers.

The terms of the deal have not been released yet, so it’s unclear what Dre’s piece will look like. But for now, Dre may have to hold off on cracking the the Cristal to celebrate his billionairedom.