Apple: Fact-checking Jimmy Iovine’s “fake news” charge

His denial of rumors that he’s leaving Apple in August was largely a non-denial—impervious to fact-checking. His stock options are another matter.

Billboard reported last week that Iovine’s departure was “likely timed to his shares fully vesting.” In an interview with Variety Tuesday, he called the rumor “fake news.” Here’s what he said (empasis mine):

“I am almost 65, have been with Apple for four years and in 2 1/2 years the [Apple Music] service has gotten to well over 30 million subscribers and Beats has continued its successful run. But there’s still a lot more we’d like to do. I am committed to doing whatever Eddy [Cue], Tim [Cook] and Apple need me to do, to help wherever and however I can, to take this all the way. I am in the band.

“All this stuff you’re seeing in the newspapers, let me tell you, my stock vested a long time ago. We need Donald Trump here to call it ‘fake news’,” he said, getting a laugh…

There is a tiny portion of stock that vests in August, but that’s not what I think about,” Iovine added. “My contract is up in August, but the funny thing is, I don’t have a contract. I have a deal, and certain things happen along that deal. The bottom line is I’m loyal to the guys at Apple. I love Apple, and I really love musicians. That’s why those articles annoyed me, because it had nothing to do with reality. It made it out to be all about money.”

Here’s what we know about Iovine’s options. Apple’s May 28, 2014 press release stated that it had acquired Beats from Iovine and Dr. Dre for “approximately $2.6 billion and approximately $400 million that will vest over time.” Most Apple options vest over three years, which would put the vest date of Iovine’s shares sometime before May 28, 2017. That’s “a long time ago” in my book. Some time-based Apple RSUs start vesting after two and a half years and wrap up after four and a half. Either way, the lion’s share of Iovine’s options vested long ago.

The portion of stock he refers to as vesting in August sounds like the restricted share units Apple granted to all employees on Oct. 15, 2015. Those RSUs are set to vest in Oct. 2018, not Aug. 2018, but that’s not a huge discrepancy. If this is the portion of stock he refers to as “tiny,” he’s not wrong there either. Granted in units of $1,000 or $2,000, they’re probably not anything a billionaire would worry about.

My take: What’s news to me in Iovine’s statement to Variety is that his contract—or deal, or whatever—is up in August, which is when Billboard’s sources said he would be leaving Apple. Now, of course, he can leave earlier or stick around later, if only to make those sources wrong.

See also: Apple’s Jimmy Iovine had one shot, one opportunity (video)

3 Comments

  1. Gregg Thurman said:

    I never saw the value in Dre, Iovine or Beats, so go or stay means nothing to me. If you’re objective about it Apple could have bought Spotify for far less and got more.

    1
    January 10, 2018
  2. John Kirk said:

    I don’t think I understand Apple’s Beat’s acquisition so I don’t comment on it.

    My gut feeling is that Apple overpaid for Beats. They got value. But not enough value to justify the high acquisition cost.

    0
    January 10, 2018
  3. Jonathan Mackenzie said:

    What cracks me up about the Beats acquisition is that so many folks (on the internet, I mean, not here specifically) talk about how Apple should buy something really big like Disney (or Netflix or Tesla, etc.). And yet when Apple did make a deal that was a little wide of its usual mark (and for a pittance compared to what these others would cost) they faced nothing but ridicule and doubt. I can’t see how those who are uncomfortable with a 3 billion dollar purchase of a music and headphone company would be able to survive the drama of Apple spending tens or hundreds of billions on a company even further off of Apple’s beaten path.

    Tim Cook said the Beats deal would be accretive. He’s really good with numbers. That’s good enough for me.

    I’m happy to ponder what they got or what they learned from the deal, but to me it ultimately boils down to one thing: Apple has a pretty good track record. My guess is they got more than their money’s worth.

    And it’s up to Tim Cook to decide who on Apple’s team is contributing and who is not. Cue, Iovine, Ahrendts. An outsider can’t possibly know enough of the story to presume to rate their job performance. I hope they are all doing great. But who knows?

    Iovine did at least succeed in making Tim Cook look like a pretty good public speaker.

    0
    January 10, 2018

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