Bertelsmann Music Group was banking on a big hit this quarter from rap newcomer Shyne to help its Bad Boy Records division fulfill its financial projections. But executives are now considering whether to even release the debut album because of his indictment for attempted murder.
The 19-year-old rapper, whose real name is Jamal Barrow, was indicted this week on three felony counts of attempted murder. According to police, Barrow opened fire Dec. 26 in a New York nightclub after a patron disrespected his boss, Bad Boy chief Sean "Puffy" Combs. Combs allegedly brandished a handgun during the dispute and was arrested later that night on weapons violations.
The violent outburst follows another music industry clash in December and underscores anew the risks that companies take on to mine the rap phenomenon. In December, Shawn "Jay-Z" Carter, a Grammy-winning rapper and founder of Seagram-affiliated Roc-A-Fella Records, was arrested for allegedly stabbing a rival record executive at a nightclub party in New York. Carter, whose album this week topped the nation's pop chart, was recently arraigned on assault charges.
In other businesses, an executive or employee who resorted to violence to settle a dispute would almost certainly be fired or suspended until the matter was resolved in court. But so far, BMG and Seagram, where Combs' and Carter's labels contribute millions of dollars to the bottom line, have taken no action.
High-level sources said top brass at the companies are disturbed about the allegations but powerless to act unless Combs or Carter is convicted of a crime because of contractual restrictions in their joint venture deals.
But if either is convicted of a felony, sources said BMG and Seagram could cut ties with his company, claiming a breach of the implied covenant of good faith and fair dealing in their contracts. Under that clause, no party to a contract can do anything that will impair the rights of the other party to receive the fruits of the contract.
Executives at BMG and Seagram declined to comment Thursday. Combs and Carter, each of whom was arrested last year for involvement in other violent episodes, deny the new allegations.
But BMG executives are now considering pulling back the Shyne release and question the future of Combs' Bad Boy Entertainment.
"You can only hold your nose and look the other way for so long," said one BMG executive, who spoke on condition of anonymity. "We do not condone violence and will not tolerate it. We take these allegations very seriously and are looking into the matter."
Seagram pressured its Interscope division to cut ties with profitable Death Row Records two years ago after the label's founder, Marion "Suge" Knight, went to prison for a probation violation involving felony assault charges. But sources say it still profits from the release of Death Row-owned music.
Carter's Roc-A-Fella deal could face a similar fate should he be convicted on assault charges, said high-level sources inside Seagram's Universal Music Group.
The current rap debate is a far cry from earlier battles, which prompted some music corporations to drop controversial rappers for lyrics allegedly promoting violent behavior. During the last decade, free-speech advocates have defended the rights of rappers, championing the musical genre as a new art form that exposes the stark reality of urban life.
But recent controversies involving Combs and Carter seem to have more to do with petty bickering than artistic pursuit.
Carter allegedly stabbed rival record executive Lance "Un" Rivera because he suspected Rivera was selling counterfeit copies of his upcoming album, witnesses told police. In Combs' case, three bystanders were seriously wounded in a hail of gunfire because a nightclub patron threw money in the rap tycoon's face, according to police reports. Combs' bodyguard Anthony "Wolf" Jones was also charged with possession of a stolen weapon recovered from the vehicle in which Combs and his crew fled the club, police said.
Several months ago, Combs publicly apologized for his involvement in an episode that sent a rival executive to the hospital, sparked by a dispute about a music video in which Combs made an appearance. The rap tycoon was arrested in April after he and two bodyguards allegedly assaulted Interscope executive Steve Stoute during business hours at the New York office of Universal Music Group.
According to Stoute, Combs burst into his office, punched his face and beat him to the ground with a telephone. Combs' alleged accomplices then joined in, Stoute said, and repeatedly kicked and pummeled him with a chair and their fists and trashed his office.
After negotiating what sources say was a $1.5-million settlement with Stoute, Combs pleaded guilty in September to a harassment violation and was sentenced to a one-day class in anger management. He served no jail time or community service and walked away with no criminal record.
This time, things might not go as smoothly. If convicted on felony weapons violation charges, Combs could be sent to prison. The same is true for his bodyguard, who was arrested in 1991 in a weapons violation and an attempted murder of a policeman.