Hello and welcome to The Long Wave. Kendrick Lamar v Drake was already the biggest rap beef of the 21st century – and then it got legal. This week I spoke with Nels Abbey, Guardian contributor and author of The Hip-Hop MBA: Lessons in Cut-Throat Capitalism from Rap’s Moguls, for his take on Drake’s legal action against Universal Music Group (UMG) and Spotify. He argues that to understand this latest development, you need a business lesson on how the hip-hop industry became what it is today. Let’s get into it, after the roundup.

Weekly roundup

Ghana’s new old president | John Dramani Mahama, who was president of Ghana from 2012 to 2017, has won a historic comeback election victory, after voters ousted the incumbent New Patriotic Party in rebuke of its management of the country’s deepening economic crisis.

France withdraws from Chad | France has begun recalling its military assets from Chad, as its influence wanes across its former colonies in Africa. As west Africa correspondent Eromo Egbejule reports, this follows the expulsion of French diplomats, banning of French media and withdrawal of troops in Burkina Faso, Mali and Niger.

Jay-Z accused of rape in US lawsuit | Jay-Z has been named alongside Sean “Diddy” Combs in a lawsuit alleging that the pair raped a 13-year-old girl after the MTV video music awards in 2000. Jay-Z denied the allegations on social media, dismissing the lawsuit as a “blackmail attempt”.

Black patients less likely to survive stem cell transplants | Ethnic minority cancer patients from all backgrounds face an increased risk of fatal complications after donor stem cell transplants in the UK. As UK health and inequalities correspondent Tobi Thomas reports, a study found that “there was a higher risk of death in the 100 days after the transplant for Black and Asian patients compared with white patients”.

Poetry slam resurgence in Africa | Young Francophone Africans across west and central Africa are packing out poetry slams, as performers find an outlet for their disenchantment with military coups, rising unemployment and a worsening cost of living crisis.

In depth: a generational rap beef

If you want the scene-by-scene play of how the Kendrick Lamar and Drake spat developed, you can read this explainer, but what matters most is Lamar’s diss track Not Like Us, which is the subject of Drake’s legal action. It became a viral sensation when it was released in May, debuting at No 1 in the US, definitively crowning Lamar as winner of the feud and immediately becoming a staple of global Black nightlife. Where previously we’d finish parties on an electric slide to Cameo’s Candy, Not Like Us was seeing us out the dance, with people rapping every bar.

Drake, who had boasted about his mammoth commercial size and status as an international hitmaker, was now the victim of a track that set several Spotify streaming records and had global reach. But Drake had not only seemingly lost in the cultural sense; the beef also represented a business failure. His supposed preferential standing within music labels had been a source of bravado for him – on the track Push Ups he taunted Lamar about his alleged 50% contract split with his former label Top Dawg Entertainment, which Lamar had left in 2022. But now, at their shared parent company UMG (Lamar and Drake are signed to UMG subsidiary labels Interscope and Republic, respectively), Lamar has come out on top. A deeper story on the business of hip-hop has begun to emerge.

“Competition has helped decide practically everything in hip-hop, from who’s going to be the bestseller, or even who gets to go first on a song,” Nels Abbey says. It’s crucial here to zoom in to examine the different types of competition in different industries. You have oligopolies, where a few large companies dominate the industry – Abbey provides the example of Coca-Cola and PepsiCo sharing about 70% of the US soft drinks market. Then you have monopolies, where just one company dominates an industry. And then you have “monopolistic competition” – where many companies may be selling the same base product but with significant differences, say hair salons or clothing stores.

Abbey classes hip-hop as a “monopolistic industry”. Lamar and Drake are not interchangeable entities – while they are both rappers, they are incredibly different as artists. Drake is “the ladies’ man, the party guy, a bit introspective sometimes”, whereas Lamar is “conscious rap, much more lyrically dense, more of a hip-hop purist”. On paper, they’re not natural competitors as, despite previous collaborations, they occupy different lanes. But as Abbey explains, hip-hop has not historically taken the monopolistic approach: “Going all the way back to Death Row and Bad Boy Records, right the way to Drake and Kendrick now, hip-hop often operates like cut-throat oligopolies, competing for market share, so quite intense.”

For Abbey, hip-hop artists’ backgrounds of economic deprivation, gang wars and rivalry, both local and continent-wide, mean that “something that should be a business competition becomes intensely personal, almost as if they try to destroy each other as people”. You saw it with Eazy-E v Dr Dre, and Biggie v Tupac. “That personal diss track of course becomes a record,” Abbey says, and record sales then add another layer of competition.

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How big record labels took over hip-hop

What does it mean for record labels themselves to be involved in this competition, where a rap beef culminates in litigation? For Abbey, this requires digging into how hip-hop became big business. “In the beginning, big record labels didn’t view hip-hop as real music, which created a lane for small independent businesspeople to occupy and cultivate hip-hop into an industry.” Early hip-hop in the late 1970s was managed by executives such as Sylvia Robinson, whose Sugar Hill Records created the Sugarhill Gang and later signed Grandmaster Flash and the Furious Five. In the next decade, big record labels finally caught on to the profit potential. They approached and signed rappers such as Vanilla Ice and MC Hammer, who “sold massive records, but lacked cultural credibility – meaning that if you’re trying to create an empire in this business, when you find one person, you want to be able to attract more talent,” Abbey says.

The problem big labels found was that “young talent coming from the hood don’t want to be the next MC Hammer or Vanilla Ice, they wanted to be an Ice Cube or an Eazy-E, so they were still running to independents because they wanted to be like the people they looked up to”.

But then, in the 90s, deregulation of the music industry led to the emergence of big entertainment conglomerates. As a result, Abbey says, “small hip-hop record labels started to get purchased or do big deals with those big labels. Universal [UMG] purchased Def Jam and Interscope, which owned Death Row Records. That’s pretty much how they became the market leaders today, and how all these independent hip-hop executives such as Russell Simmons became wealthy people.” (Simmons sold his share of Def Jam for $120m in 1998.)

But for those labels that resisted being bought out, bigger labels would use their financial power to crowd them out of the market. As Abbey explains, hip-hop music videos in that era transformed from being “hood focused” to featuring images of luxury – the Hamptons, helicopters and private jets. Take Notorious BIG’s Hypnotize or Busta Rhymes’s What’s It Gonna Be?!. Major TV stations couldn’t resist broadcasting the blockbuster-like productions, and “the small independents who didn’t have the money to make those big videos struggled to get their videos on air”. As money flooded into hip-hop, from music videos to payola, “it was effectively over for the little man”.

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Kendrick v Drake – what makes a winner?

So, back to Kendrick v Drake. In 2021, Drake signed what was described as a “LeBron-sized deal” with UMG. As Abbey stresses, no one knows the details, but it is rumoured to be in the hundreds of millions (he rapped “500 million just for Aubrey” on Major Distribution). It could require him to meet certain sales figures or other performance indicators to access the full sum, and there could be a clawback clause to recuperate money already paid if these aren’t met. What we do know is that Drake and Lamar are both signed to labels owned by UMG. Abbey emphasises that UMG is not a monolithic entity: “It’s a vast entertainment block where you may have different silos where people might even have issues with each other. We can’t forget the role of competition even within UMG – these executives are going to be competing with each other.”

Now, the norm for a record label whose artist is engaged in a generational rap beef would be to throw all resources behind the artist to ensure the beef is won, since “it helps create soft power for the label, makes them more credible in the actual business, and it helps them attract talent, too”. That’s how it happened during the early 2000s beef between Nelly and KRS-One, which has parallels with Drake v Lamar, the pop star versus the pure hip-hop vanguard. In that beef, Nelly won, as Universal Records were able to drown out KRS-One’s diss track Ova Here by pushing Nelly’s Roc the Mic (remix), where he mockingly raps that the “old man should get a rapper’s pension” (KRS-One later described Universal as “an oppressor”). But if both artists are under the same conglomerate, surely that would imply label neutrality, particularly in a monopolistic industry where there’s presumably little benefit from one eliminating the other?

Well, this is the entire basis of Drake’s legal filing: he is claiming that UMG and Spotify conspired to artificially inflate streams of Not Like Us while suppressing his own music, and he’s shaping up to sue for defamation on the basis that Lamar’s lyrics accused him of child sexual abuse, which he strongly denies.

While Drake has been ridiculed for diminishing rap beef by running to the courts, it is odd that UMG would permit such lyrics considering the reputational risk. And this is where Drake’s allegations against UMG, if true, may not just be poor sportsmanship. As Abbey explains: “Spotify, like every streaming company, has a fixed rate for songs in terms of share of profit Spotify gives to the label and therefore the artist. Drake claims that Spotify and UMG reduced the rate the label will receive on Not Like Us, meaning that Spotify were effectively incentivised to boost the song to receive a greater degree of profits.” Drake’s allegations against UMG suggest that it effectively helped to sabotage one of its biggest assets, threatening his career and continuing commercial viability. A spokesperson for UMG said last month that the suggestion that it would “do anything to undermine any of its artists is offensive and untrue”.

All in all, if the aim of a rap beef is to destroy your opponent, Lamar may have achieved that goal. And, regardless of what camp you’re in, the feud does raise some important questions. Drake is, of course, by no measure the little guy in a David and Goliath scenario. And we can’t be certain of the impact on his career until he drops a new project, or of the credibility of his legal action until more details emerge. But, in the timeline of rap beefs and competition in hip-hop, money has always worked harder and faster than any pen could.

• Nels Abbey’s book The Hip-Hop MBA: Lessons in Cut-Throat Capitalism from Rap’s Moguls is out now.

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