Of all the places to carry his money, the stark white Air Jordan sneakers would seem the least likely. But there it is, a roll of crisp $20 bills, tucked between music producer Terius Nash’s shoelaces where anyone can see. The last time he came to MTV, he wore $2,000 around his neck. “It was a big roll of $20s on a ball and chain,” he says. “I would’ve worn it again, but you gotta keep giving them something new.”

Some people might worry that stunts like this could get you mugged, but for Nash — whose nom de hip-hop is The Dream — that’s practically the point. In his Mack Daddy schtick, money is less a thing to be had than spent and showed off, which he can apparently afford to do after a year in which he wrote and produced smash records for Rihanna, Mary J. Blige, Chris Brown and J. Holiday. Just check out Nash’s Bottega Veneta sunglasses (“Mostly I like that they cost $400,” he says), his Burberry and Louis Vuitton luggage, and the way he hands $20 to the doorman of his Midtown hotel as he steps out of a black Escalade following his appearance on “TRL.”

At a time when the music business is falling apart, he and his partner, Christopher “Tricky” Stewart, are raking in the dough, part of a small coterie of A-list producers who have become as important as the people for whom they write. Timbaland, who did hit records for Missy Elliott, Justin Timberlake and Nelly Furtado, has become a successful solo artist with a platinum selling album. Pharrell Williams of The Neptunes (producer of hits for Gwen Stefani and Britney Spears) has branched out with a clothing line, called The Billionaire Boys Club; an upcoming collection of fine jewelry for Louis Vuitton, and a record label whose roster includes Snoop Dogg. Scott Storch, who’s done records for Lil’ Kim and 50 Cent, is worth $70 million, if a profile of him in Rolling Stone is to be believed. Nash, meanwhile, is running around New York promoting his own album, “Love Me All Summer, Hate Me All Winter,” which he recorded in a whirlwind two-week stint a couple of months back. It’s a collection of radio-friendly R&B songs about girls and loot. If he can sing about both at the same time — as he does on the Prince-inspired song “Fast Car” — even better.

This story first appeared in the January 10, 2008 issue of WWD. Subscribe Today.

Marvin Gaye’s “What’s Going On” it is not. But what kind of risks do you really expect from a fledgling R&B crooner today? Album sales were down 15.6 percent last year from 2006, the steepest drop since 1999, when Napster first came on the scene. Radio consolidation has made it harder than ever for new artists to break out, and because iTunes enables consumers to buy individual songs at a fixed price, listeners have little reason to buy whole albums. With so much riding on just getting a hit single, that song is not likely to be “Fight the Power.”

“You have to accept certain things,” says Nash, 27. “Back in the day, you had Public Enemy. They were standing for something. Now, it’s about clothes and shoes. We’ve become singles chasers. It’s nobody’s fault, but it’s where it’s at now.”

Five years ago, he was lost, a kid from Atlanta with little more than a high school diploma and a dead-end job as a collections agent. “I wasn’t even good at it. I’d call these people and say, ‘Mary, you got a bill due.’ And Mary’d be like, ‘Well, I ain’t got the money.’ I’d be like, ‘That’s fine. Bye-bye.'”

Then Nash met Christopher “Tricky” Stewart, a young producer in Atlanta working under the tutelage of L.A. Reid, who’d himself become a record executive after producing hits with his partner, Babyface, for Whitney Houston, Bobby Brown and Paula Abdul. With a couple of top 10 hits under his belt, Stewart took Nash under his wing, and the two began collaborating on songs, among them “Me Against the Music,” a duet between Britney Spears and Madonna.

Last year, they wrote a song called “Umbrella,” an up-tempo love song that had hit written all over it. First, they sent it to Spears, but got no response. “She had a little force field around her,” says Nash. Then it went to Mary J. Blige, who loved it, but was still a year away from doing another album. Finally, a demo of the song made its way to Rihanna, who jumped on it.

After spending seven weeks at number one, the single received three Grammy nominations, among them Record of the Year.

Some industry veterans have cited the song’s success (and its backstory) as an example of how the music industry’s pop stars have become virtually interchangeable. (“You could give Rihanna 19 hit singles,” says Jerry Blair, the well-known former A&R man behind Sarah McLachlan and Ricky Martin, “but she still won’t be a star. At a certain point, you need real artists.”) Regardless, the song’s success and a string of hits since then solidified Stewart and Nash’s position in the upper tier of the hip-hop firmament. Over the summer, their song “Bed,” sung by J. Holiday, went to the top five. In December, Blige’s album “Growing Pains” came out. They produced half of it. In two weeks, it sold more than 800,000 copies.

Sitting with Stewart in the restaurant of the hotel, Nash doesn’t come out and say what he makes for each song, but producers at his level generally receive more than $50,000 a tune up front. Then come payments they receive every time their songs are played on the radio or get sold as a ringtone. If “Umbrella” is picked up for a commercial, television show or movie, Stewart and Nash will usually see between 25 and 30 percent of what is paid. Since Stewart and Nash retain the publishing rights, they can sell the track to any artist who wants to cover it. The total can run into the millions for one song.

The way their partnership works, Stewart is responsible for the beats on their records, while Nash writes the lyrics. Nash is the showman, with his $16,000 diamond watch, swanky leather jacket and an endless parade of monologues that he delivers, most of which have something or other to do with his money. “I just got two new cars,” he says, downing a double shot of Patrón, even though it’s 12:30 in the afternoon. “I paid cash for both of them. One was a Range Rover; the other was a Cielo AMG Mercedes. They cost $112,000 and $109,000. Next, I’m getting a Lamborghini. I’ll pay cash for that, too, and get it over with. I’m going to have, like, 10 cars by the time I’m done, and I’ll pay for all of them up front. Credit just gets you f—ed up.”

“It’s been the same thing since the day I met him,” says Stewart, who looks preppy and inconspicuous in his Izod shirt and glasses. “I was saying the other day, ‘Gas is getting crazy. I’m going to get me one of those Ford electric cars.’ And he was like, ‘Oh no you don’t. Not when it’s my turn to shine.’ He said, ‘I don’t care if it costs me $600 to fill up my tanks. I’m gonna have six cars with $600 worth of gas and I’ll just go on overseas and buy my gas by the barrel.'”

It’s a show that works for them, though it doesn’t dispel increasing complaints that big-name big producers are receiving exorbitant salaries. While hit-makers have been receiving massive checks since the Motown era and earlier, it’s hard to think of a time when the music business has been this strapped for cash. In the most recent fiscal quarter, both Sony/BMG and Warner Music reported losses, according to filings with the Securities and Exchange Commission. And the economics of “urban” music are frequently cited by industry players as being the worst in the business today, with leading rappers and producers demanding far more money than they can guarantee delivering.

“Because of these producers and the massive fees for guest appearances by rappers, the risk-reward ratio in urban music is upside-down,” says Tommy Silverman, the head of Tommy Boy Records, which launched the careers of De La Soul and Queen Latifah. “The cost no longer justifies the investment.”

Another former label head, speaking on the condition of anonymity, says, “All of these labels are spending a fortune, hoping to sell like it’s 1995. It just doesn’t happen. How do you spend $250,000 on one song? It’s crazy.”

And being hot one minute doesn’t guarantee success the next. In 2005, producer Storch seemed to be on fire, with massive hits for 50 Cent, Chris Brown and Lil’ Kim. In 2006, the labels paid him millions of dollars to produce records for more than 30 artists, among them Jessica Simpson, Nas, The Game and Paris Hilton. Not one of his songs even reached the top 10.

As David Geffen says, “The record business started out selling singles. Then, with the birth of the LP, it became about albums. Now the industry is back to selling singles, and the problem is that it’s just not a very good business.”

Recently, there’s been some evidence that a correction is coming. Going forward, some are predicting that the labels will begin to move away from the high-stakes poker game of manufacturing big stars and invest more resources in developing artists who write and produce their own music. This would likely leave fewer blockbuster acts, but would lead to more constant returns and lower overhead, they say. Even Nash says his own attempt to go solo is partially a way to generate another revenue stream without introducing the high costs associated with manufacturing another artist. “With my projects, it’s not really about me,” he says. “It’s us saying we can deliver this type of product at a lower cost. We’re going to write 300 f—ing songs a year anyway. So don’t give me front end. I don’t need any money. But give me ownership, and I can make money from record one, when it sells the first copy.”

At 2:30, he and Stewart jump into an Escalade that takes them four blocks south for an interview on Sirius Radio. There, he’s asked a slew of Star magazine-like questions from a young woman, such as why he and his singer wife, Nivea, recently split. After delivering an elliptical answer that has something to do with the pressures of his career, he heads back downstairs and ventures off to Hot 97 for another interview, this time with Angie Martinez, the Barbara Walters of black urban radio.

While he waits to be received by her majesty, Nash sits in a green room, professing to be unconcerned with the loss of privacy his new celebrity status might entail. “My daughter is two,” he says. “She’s smart. I could pay this price for her. It’ll mean she could have all this money. That’s what it comes down to. First generation. Somebody’s gotta do it. Somebody did it back then. That’s why all these office buildings and s–t are owned by all of them motherf—ers other than the right motherf—ers and everybody else just worked for somebody. So do you want to work for somebody or do you want somebody to work for you? You give up what you gotta give up. It ain’t like you got drafted and put in the f—ing army and s–t. Like, that’s f—ed up. Then, you’re not even famous and you get shot and killed in f—ing Iraq.”

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