Is Jimmy Iovine leaving Apple this summer? He hasn’t decided yet, multiple sources tell Variety, but the contract-less executive, who holds no official title at the tech giant, stands to make a small fortune once his stock holdings vest in August.
Iovine became a billionaire on arrival at Apple in 2014 with his longtime friend and business partner, rapper-producer Dr. Dre, after the company paid the duo $3 billion to purchase Beats Electronics — $2.6 billion in cash and $400 million in stock (the deal was announced in May and closed in August). The headphone maker was founded by Iovine and Dre in 2008.
Using the metric of a 19% average rise over three-and-a-quarter years, the stock would today be worth about $700 million today, which would be shared by Dre.
Should Iovine exit in the summer, he would be leaving having accomplished one key goal: the 2015 launch of Apple Music. The streaming service currently boasts more than 30 million subscribers, which in three years, is an impressive feat, especially seeing that it doesn’t offer a free tier. Less successful has been Apple Music’s plans for original video content.
Of course, with a market cap in excess of $900 million (nearly $1 trillion, at current share prices) Beats, Apple Music, Beats Radio 1 and additional initiatives by Iovine and his team are “a tiny blip” in the Apple ecosystem, says one insider, as is a payout of nearly $1 billion. Another source says Iovine’s plan was always to exit once hitting the last of his exercise options over a three-year vesting period. He could, however, continue to work with Apple in a consulting role.
Last month, Apple purchased the Shazam music app for a reported $400 million, and analysts are speculating that it may now have a Netflix purchase in its sights. In a recent letter to clients, Citi analysts ascribed a “40 percent chance” Apple will purchase Netflix by the end of 2018. Apple announced over the summer it had designated a $1 billion war chest for original programming, so the match makes sense.
But the question of the moment isn’t how Apple plans to spend its billions, rather how it might keep the creative spark burning should Iovine exit. “When Apple lost Steve Jobs they needed a creative dynamo to fill his shoes, someone with his passion and insight in the industry to fill that tough spot, and very few were up to that task. Jimmy is one of the few,” says Lisbeth Barron, chairman and CEO of Barron International Group, a New York-based strategic advisory firm that closely follows media.
When Apple closed its purchase of Beats in August of 2014, Dre also took on an unspecified role within the company. His stock presumably vests along the same timeline, and Dre’s future plans are also unknown.
Apple stock (NASDAQ APPL) closed at $175 per share on Friday, up 1.14 percent.
Variety has reached out to Apple for comment.