Steve Stoute Sounds Off On Stephen A. Smith, Drake, Jay-Z & Why Fame Is Winning

0:00Fame has actually outpaced talent, so people who are talented will actually do something that will get them famous versus leaning into that talent. What are you doing to your brand? What the you think that says about you? I'd be interested to hear your take on Nike. They're in deep shit. They're in deep shit because you don't drink the water, you just look, is this for the show? It's just for the show. Oh, okay. My only thing about people copying... That is the whole... What's funny is I wanted to sit for that second and I was like, this is going to happen if I do that. The odd thing about being a visionary is, the better visionary you are, the longer you have to wait.

0:43By the way, you've gotten much better at this thing. Thank you, bro. It was great. Clip that one. What's up, everybody? This is Rich Kleiman. Today we got a special boardroom talks live from the Crane Club in New York City with somebody who's legitimately a friend of mine for over 25 years. Please welcome the commissioner, Steve Stout. Thank you for having me on the boardroom. I've introduced you as the commissioner. As I've gotten older and I've known you as that forever, I've realized that's like one of the f***ing flyest nicknames you can get. It really is. To be called the commissioner, and in some ways you were being called the commissioner of an entire, like, sector.

1:25Where did you get that name, bro? I never even asked you that. Nas. I think he got the commissioner from the red phone in Batman. When you picked up that red phone, the guy on the other end. I think that's where he got it from. I'm not sure, but when he, like, to be called that by Nas, you know? It's like one of the greatest songwriters of all time. When storytellers sees you and goes, you're the commissioner. And then that kind of been my career. Like, it's kind of seen it earlier. I was, that was 20 years ago. Yeah, and you were being called this by Nas at a time where he was Nas in the infancy of his career and hip-hop had not completely entered the mainstream zeitgeist.

2:01No. And you hadn't accomplished anything. No, I hadn't accomplished anything. But why he chose that specifically is beyond me. And the fact that that ended up, to some extent, becoming my brand, right? Yeah, yeah. It's kind of awesome. It's kind of cool. It is. And in the New York Times story, I think that called you the CEO that other CEOs turn to. That was wild. That's basically what I would probably define the commissioner as. How much does that type of title mean to you when you hear something like that? I feel a great deal of responsibility. And I know I've earned the right to get acknowledged in that way.

2:42But I also feel a great deal of responsibility. not only to the people that I advise, but to hip-hop culture and people who've come up as a result of the opportunities that hip-hop has created. I feel a responsibility to keep pushing forward. How far can I go and leave the door open so that other people can follow? I'm genuinely proud of watching everything that has taken place around the convergence of hip-hop culture and brands or technology. And the fact that I've played any role in that is inspiring me and keeps me going. The book he wrote, Tanning of America, is aging so well, right? I think I...

3:28Oh, God, Richard. Anytime anybody says that to me, I get a feeling that I can't even explain. My daughter was in school, and it was required reading for the class. But I get this warm feeling about it that I'm proud of myself. It proved true, but there's nuance to what that means today now. Like, have you thought about what an evolution of that could be? When I wrote The Tanning of America, I was really thinking about how young people were unified around hip hop culture. It didn't make a difference if you was white, Spanish, black, that remains true now, because at the center of that was talent, right?

4:02Like, these things can be impactful all around the world. It can unify people. At the center of what unified it was this all, this common love for that talent. What has shifted is fame has got in the way of talent. Fame and talent had a great relationship. Fame is the amplifier of talent. Fame has decided it doesn't need talent anymore. Fame has actually outpaced talent. And the worst part of that is that talent has accepted that truth. So people who are talented will actually do something that will get them famous versus leaning into their talent. And that goes back to this first thing about brand stuff about like being your brand like if you decide man I'm gonna say I'm gonna have a hot take.

4:45That's ridiculous as shit just because I Know it's gonna get clicks. What are you doing to your brand? What do you think that does to you? You could be one of the great athletes, but because you want to get your podcast going you're willing to say the dumbest shit Because you know that's gonna get clicks. What the you think that says about you fame is a dangerous drug and we created the ultimate playground for that drug. There was the reality boom like 25 years ago and reality TV was like the first kind of reflection of people that were getting famous and called talentless at the same time. Then social media created this entire like vessel for that to happen for anybody and everybody.

5:26So now you can chase fame and the tactics that are needed to become famous are just no longer the tactics that was the only thing that resulted in fame, which was talent. Yeah. So when you say talent's accepted, is it that they'll either compromise their brand or just accept that what their talent is? Both. Listen, I have a great deal of respect for Stephen A. Smith. I think Stephen A. Smith has done so much shit that is about fame than the fact that he's actually a great journalist. He's clearly cashing out. But his journalism, the thing that he's great at, I believe is homogenized by the shit that he's doing for fame.

6:07That's one example of many examples. No, but it's a real one because it also has a real impact on what your legacy may be, which if you stop and think about it, may be the one thing that could keep somebody from chasing that, which is that his legacy may be just as clouded with some of this. I just know that I've seen that transition from like journalists to like, yo, whatever's going to get the clicks. And I have a great deal of respect for him, period. But this is what's happening. This is the new game. And I believe that may be what Legacy is turning into. It's the story that's told about you.

6:46You couldn't get somebody to talk about him right now today without talking about all the other stuff. And that does sustain. It happens to actors and musicians that are some of the greatest in the history of their field. but when you tell their story it gets coupled with all of the other shit that that goes on in their life i mean yeah the idea that you actually left the music industry at that age and that point of your career and you didn't leave literally in that what you created became so powerful adjacent to the industry that like the joke was on the music industry because you were in it but you didn't have to play by those same rules at the time but you did leave you were managing some of the biggest artists, you were running the biggest labels.

7:28Why did you make that pivot? Was the opportunity you saw in this whole like thesis around what tanning of America was, even if it was before your book was just too big, you saw it? It's hard to explain what drives an entrepreneur. I don't recommend that people go into being an entrepreneur. I don't think it's, there's a lot of downside to it and pain associated with it. Obviously there's upside when you nail it, But the majority of people fail and it's all-consuming I mean you you you become a narcissist by default because all you do is think about you and your association with the idea that you have but when you are Consumed by the idea To the point that it can't get out of your head You got to pursue it because it can't get out It's the only solution is to actually pursue it right the combination of that and an industry, oddly enough, like podcasts.

8:25There's so many people doing it now. At some point you go, should I be doing this? Because there's so many people doing it. Is this the right thing to do for me, given all of my breadth of talent? Should I be doing this? Like, I look at rappers in the podcast industry, and I'm not shitting on anybody. Those were the same people you were complaining about 15 years ago. The radio personalities, or whoever, were interviewing you, didn't know your music shouldn't be judging you shouldn't have points of view on this shit had very little respect for you're now that person talking about politics talking about things that you know not much about or rather it's not your expertise yeah and now you're doing that because that's the hustle but podcasts do seem at this point like the first lazy idea like what am I gonna do do a podcast That's fucking brilliant.

9:21Like, really? I get it. But not everybody? Yeah. I mean, seriously, everybody? Podcasts are the new love and hip hop. No, podcasts are the new mixtape. Anyone can make one. I just think there's more. I just think there's a bigger idea. In order to find a bigger idea, you have to do something that's uncomfortable. I remember United Masters being talked about in San Francisco. and looking back on it now, it's even more kind of like, damn, he really did see it again. Because that was seven, eight years ago, right? Where you were in the Bay. Is that what that was? Like, I'm running an agency. I'm as big as it gets in this business.

10:03I'm the commissioner. But I got that thing again. I got that feeling again. What happened was, as the CEO who advises CEOs, I'm having separate conversations with Jimmy Iovine and Jay-Z. And they're both equally speaking to me about streaming platforms. Jimmy's building a product called Daisy. I remember the name of it, which was Beats Music. And Jay was buying Tidal. And all I knew was, like, if these guys are leaving the record business, it's absolutely over. And they were building these streaming platforms. So my whole thing was, like, okay, if they're building streaming, why don't I build the supply chain?

10:45In the record business, historically, an artist needed a label in order to find an audience. When music went digital, an artist can find an audience before they find a label. So why would the economics be upside down to the artists if they actually found the audience first? Weren't they now the record label and you were just the distributor? And the combination of needing a supply chain and that fact becoming a real fact that I had seen. Now, of course, there's a lot of nuances to that. Like artists still want to be artists. Can I win a Grammy with you? Don't I look like I'm less than because I'm not with a major?

11:26Man, I grew up loving Def Jam. You're not Def Jam. You got to wait for those people to age out and then the next generation to come in who's like, I don't give a f*** about Def Jam. I want to control my shit. I want to make money. I don't need anybody. Like, independence was going to become a thing, and you just had to wait for it. But the odd thing about being a visionary is the better visionary you are, the longer you have to wait. Because it takes, man, I've seen it early. That's the good news. The bad news is it's nine years. So you better have the financial runway to sit it out. Yeah. Because it's not going to be nine years.

12:05And bigger than the label infrastructure changing and shifting back to the talent conversation, that feels to be a challenge as well, right? Because there was this period, and I was a little bit further out of the music industry at that point, where people were buying songs and finding these TikTok sensations, and there was zero artist development, therefore zero new artists that have entered into like our lives that connect with us that doesn't seem to be in a much better place the same stars seem to be the same stars you're doing a really good by the way you've gotten much better at this thing thank you bro no it's great well clip that one sadly to say it's less an artist business and it's dominantly a song business yeah i would tell you it's probably if you talk about streaming, there's probably 20, 25 artists that if they stream the equivalent of 2 million albums, their last album, there's an 85 % shot, they'll do it again.

13:16Right? There's probably 25, let's say 25 artists, it doesn't matter. Artist number 26, their song is competing with artist number 500 ,000. So you got like the guys, right? The Drake's, the Kendrick's, the Bruno Mars, right? You got that core group. You have great predictability that whenever they put it out, there's an audience waiting for them. Harry Styles, et cetera. The amount of celebrities and a lot of the fame and a lot of the noise that's out there is confusing to most marketers. What I do is help them separate signal from noise. What is the signal? F*** the noise. And every day, there's more and more noise, which makes the signals harder to find.

14:05But that's my job as a marketer, as a music executive, distribution company executive, as a thought leader. How do I separate signal from noise constantly? And that's what everybody has to do. Because the one thing, there's going to be more podcasts. There's gonna be there's more songs being released today than it was yesterday There's more videos being released today than they were yesterday. Does that get more confusing? Of course it does Because choices everywhere But how do you separate the signal from that noise? How do you help do that for people? That is the magic trick I'd be interested to hear your take on Nike brand that has been.

14:48I'm excited about their new CEO, who I know well, who I think is incredible. I think the culture around the business has changed drastically. But then the stock price came out again, and it's down. I've watched your journey. I've gotten a chance to have a penthouse view of your journey with Nike. And I know how much you love that company and the struggles that you've had over the years in getting them to understand that they started to lose a sense of what great was. And it was hard. It was hard for you. In fact, it was so hard for you, you thought it was you. You thought maybe I, maybe it's me, bro.

15:26Maybe it's me, it's not them. They're in deep shit. They're in deep shit because it was fine when it was Adidas, Reebok, and Nike. And they could beat up on Reebok and Adidas and Adidas and Reebok would lose their way and Nike would just get the best athletes. Go fuck yourself. We got everybody. Go fuck yourself. They've allowed all these other brands to form and gain confidence. They allowed on running to have a lane. They've allowed New Balance to make a comeback in lifestyle and fashion and shit. They've allowed new brands to emerge and a 17, 18, 19-year-old don't mind wearing them and them being called skips.

16:08Nike had a moat, which was if you didn't have on Nikes, You weren't cool. You weren't cool. You had on skips. And if it wasn't, Adidas or Reebok, for sure they were skips. For sure. For those who don't know what skips are, you should... It's bad. Right? It falls into the what are those category. When they lost their weight for so long, they have allowed the what are those brands to gain traction. And now you have young people wearing what are those with massive confidence. They never really took clothing seriously. It was always it always felt like a plus one. It's like you got the sneakers. You need something to match the shit It didn't feel like they focused on it or they focused on it in Capsules and shit they didn't take it seriously and it's coming to catch up It's coming to catch up them that and that thing that they had how do you even explain that?

16:57You can't explain that to Wall Street like yo if you don't wear Nikes you're where everybody thinks that the other shit that you're wearing a skips. So we should get value based off of that. No, you get value based off of your sales. And your sales are, it shows, your market share shows that people aren't with anything else but you predominantly. But now people are with everything as a result of you losing your weight for so long. Jay's interview with GQ about battle rap. What was your feeling about that? Battle rap, similar to boxing. Like if you get knocked out in boxing, It's sort of the beginning of the end of your career.

17:36Once somebody sees you on the floor and they count it to 10, it sort of begins the beginning of the end. Battle rap was like that. If you lost a battle, the odds of having a career after that would diminish greatly. I mean, we could go through some funny examples, but I don't want to do that. That is the case now. I mean, you think about how long it's taken Drake to put out this album. I mean, this is the most important project he's ever... I'm sure he knows that, obviously. And you want it to be judged by the quality of the work, not the quality of the memes. Not the quality of the fan bullshit.

18:18So that's the part about it that it's never going to stop anyway, but I do believe that the fan shit and social media has made it a little bit more, maybe not more dangerous, but has made it a little... It becomes cringe-worthy. Yeah. Because of what people do with it beyond just the music itself. That's like, you know, what J. Cole was saying the other day about how it may be impossible to have a classic album ever again. Because just like politics, a classic was unanimous. And without question, Drake is still the biggest star in this entire game, in this galaxy. And he probably will deliver a classic.

19:01But there will be a fraction of people that refuse under any pretense to acknowledge it as such. And that didn't seem to be the case when we were coming up. There's still dominant opinions that control the majority perspective on something. That's true. It's dominant opinions. Now, whether it comes from informed people or not is the thing that's questionable, right? Like you don't even know. But the consensus is clear when something's positive. Well, the consensus is clear when something's positive. But, Rich, back to clickbait, you only get clicks that matter, seismic shifting clicks, when you have an opposing view of the consensus.

19:50if I could sit here I could make your shit go viral right now I could say three things right now that all I have to do is disagree with popular opinion yeah like what you think that yeah if I give you a firm strong disappoint uh disagreement with something that's consensus and I have some rationale behind it that makes sense in my twisted mind it will go viral yeah Steve said And that's the problem. That's actually the problem. But I do think that these things weather the storm. I think they weather the storm. If you make a classic album, it will stand the test of time. I believe that. I love the fact of what Jay-Z is right now in this form of his life.

20:39I love what Nas is in this form of life. because it shows you, specifically in hip-hop, that these things and their contribution isn't forgotten, even though they're not making music as frequently as they had, you know, as prolific as they had 20 years ago, the respect for what they stand for in their art is understood by all. It's understood by the consensus. I don't know if it's understood by all, but it's understood. I can ask most 20 year olds and they'll be like I may not know Jay-Z's song I have fucking respect for it yeah he's a goat that's the goat and that matters to me that needs to matter yeah that needs to matter so there's a lot I wanted to still talk about but let's wrap this one up my brother let's do it again I appreciate you man alright man thank you thank you for having me man thank you bro good luck with this this is fantastic man I appreciate it Boardroom Talks with the commissioner the one and only Steve Stout Thank you.