Un-Easy Relationship : A Hot Young Rap Producer Says He’s Being Dissed by Atlantic

His name is Un.

From a cramped, one-bedroom apartment in a tough Brooklyn neighborhood, he operates the headquarters of Undeas Entertainment--one of the hottest new rap companies in the music business.

How hot is it?

Undeas, which was launched four years ago at a nearby chicken stand, has released only two albums during its brief existence. Yet each album has sold more than 700,000 copies--generating an estimated $15 million in revenue for its distributor, Time Warner’s Atlantic Group.

In terms of breaking new talent, Un has delivered two of Atlantic’s hippest, best-selling black acts: lascivious rap queen Lil’ Kim and gangsta rap crew Junior M.A.F.I.A. That’s a remarkable success rate--one that surpasses the efforts of such entertainment giants as Walt Disney Co., which has spent twice as long and nearly 30 times as much money without developing a single new star.

But Un’s days at Atlantic may be numbered. The 6-foot-2, 325-pound entrepreneur contends that Atlantic has refused to upgrade the terms of his production deal, under which he claims his company has been paid only $350,000 during the last three years over and above advances for recordings and videos.

Un also claims that Atlantic has tried to take credit for discovering his acts by excluding his company logo from promotional materials and artwork on recordings--in violation of his contract. Un, who says he has never even been invited to a meeting with Atlantic Chief Val Azzoli, as would be common practice, is being wooed by several of Time Warner’s competitors to launch a joint-venture rap label.

“I know it seems impossible, but I’m broke, and the artists on my label are broke,” Un said during a recent interview at his Clinton Hills apartment, where a chained Rottweiler guards the entrance. “You’d think Atlantic might show a little respect for an entrepreneur who not only made them a gang of money but also gave them credibility on the street. You want to know why I’ve got six phone lines and half a dozen employees crammed into this tiny, little apartment? Because I can’t afford to move out. That’s why.”

Representatives for Atlantic insist that Un, whose real name is Lance Rivera, has been paid properly under the terms of his contract, which Atlantic characterizes as a fair, industry-standard production deal. In addition, Atlantic claims to have advanced Un more than triple the amount of money required under his contract.

Competitors, however, blasted Atlantic’s deal with Un, contending that it contains a substandard royalty rate and below-par funding for overhead. The agreement also allows Atlantic to retain ownership of the master recordings to Lil’ Kim and Junior M.A.F.I.A.’s hit albums and guarantees Time Warner the right to release 10 more of their recordings even if Un decides to leave the company.

Time Warner stockholders, who gather Thursday at the Apollo Theatre in New York for their annual meeting, might be surprised to learn that the media giant plans to profit from the sale of sexually explicit and violent rap songs well into the 21st century.

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After all, it was criticism from rap foes in 1995 that drove Time Warner Chairman Gerald Levin to unload the corporation’s interest in controversial Interscope Records, which was quickly snapped up by MCA/Universal and went on to gross more than $250 million last year.

Un says he never had the impression that Time Warner had any qualms about his success in the controversial rap field.

“Rap is a $1-billion industry for one reason only: People love it,” Un said. “If fans wanted to hear artists rap about the birds and the bees, that is the kind of rap that would sell. I put out hard-core music, and I will continue to do so until the market no longer demands it. That’s what capitalism is about. I’m an entrepreneur. I’m in tune with what people want on the street.”

How did this former crack dealer and ex-con who spent two years in prison on an armed robbery charge end up running a record label that has broken more new acts than Disney or DreamWorks?

The concept for Undeas was “birthed,” Un says, in 1993 when he and his longtime friend, rapper Notorious B.I.G., decided to form Junior M.A.F.I.A., an East Coast rap group whose moniker stood for “Masters at Finding Intelligent Attitudes.”

By then, Un says, he had quit robbing and slinging drugs and was trying to eke out a legitimate income in the music industry. Un, who studied business administration at Long Island University, had already worked behind the scenes to help develop marketing strategies for such East Coast rappers as Nas, Foxy Brown and Notorious B.I.G., who two months ago was killed in a drive-by shooting in Los Angeles.

Un and B.I.G., who was already signed to another record label, began meeting with a group of rappers several times a week at a chicken stand, where they would kick around concepts on ways to put Un’s new company on the map.

“At that point, I didn’t even have any music to shop around, but I had a ton of ideas,” said Un, whose nickname is short for Understanding. “Back then, everybody called them ‘Un ideas.’ Eventually, they just became ‘Undeas.’ That’s how we came up with the name for the company.”

Over the next 11 months, Un began to meet with executives from several major entertainment companies, including Atlantic, where he ultimately decided to sign a production deal with Craig Kallman, a senior vice president at the company and founder of Atlantic’s Big Beat division. In an unusual move, Un shopped and sold the production pact on the strength of the concept, without playing Atlantic or other companies any music.

Un’s deal was sealed just before Time Warner started to come under fire for its relationship with Interscope. By the time the media giant had dumped Interscope, Junior M.A.F.I.A.’s album was already racing up the charts. The rap collection, which was co-written by B.I.G. and included imagery as violent as any record released by Interscope, went on to generate about $9 million in retail business.

Un’s next move was to transform Lil’ Kim, the only woman in Junior M.A.F.I.A., into a sex symbol and solo act. Her debut album, “Hard Core,” includes graphic tales about lewd escapades told from a female point of view. Lil’ Kim’s marketing campaign included a bawdy promotional ballpoint pen and an erotic “coming soon” poster for retailers, whom Undeas also pumped with false rumors that the rapper was set to film a soft-porn flick. The album has generated more than $10 million in sales since its release last year.

Under his Atlantic agreement, Un received an initial $200,000 advance to launch the company in 1994--which included a $125,000 recording budget for his first album. He was guaranteed $50,000 per year for overhead, a $250,000 recording budget for follow-up albums, plus a low-end royalty rate--all of which was to be recouped from future record sales before Un and his acts earned a nickel of profit, sources said.

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“Right from the get-go, I have believed entirely in Un’s creative vision,” Atlantic’s Kallman said. “We’ve spent millions of dollars to market and promote Undeas and its artists and will continue to do everything we possibly can to make them as big as we can in the future.”

Kallman declined to comment on Un’s complaints about Atlantic, but sources there blamed Un’s financial predicament on his own “profligate” spending habits, contending that Atlantic has advanced him an estimated $2.5 million more than required under his agreement. Sources at the company suggested that Un’s complaints may be part of a negotiating ploy to land a better deal elsewhere.

Un’s new attorney, Kenny Meiselas, who has negotiated deals for such top rap entrepreneurs as Bad Boy Entertainment Sean “Puffy” Combs, said Un is not fixed on leaving Atlantic unless the company refuses to upgrade his contract to a level commensurate with his success.

“Sometimes you just don’t realize the value of what you have until somebody tries to take it away,” said Meiselas, who said Un is being courted by several firms. “It’s like in baseball. Even a player as valuable as Barry Bonds had to go to San Francisco to get what he deserved.”

Un, who has developed strong relationships with numerous top rap artists and producers on the East Coast, predicts that within five years his company will control 25% of the $1-billion rap market--regardless of which corporation chooses to distribute his music.

“I understand the protocol,” Un said. “You got to crawl before you walk,” he said. “But I’ve proven myself, and I deserve a better deal. I’m what Atlantic needs in the streets right now. But if they don’t want my help, there are other companies that do.”