Rush's new venture.

Simmons partners with Deutsch Inc. to strengthen ad agency

At 43, music and entertainment mogul Russell Simmons is still looking to expand into new markets. The founder and CEO of Rush Communications' (No. 36 on the BE INDUSTRIAL/SERVICE 100 list with $70 million in sales) interests include: Der Jam Recordings, DefPictures, Phat Farm Fashions, One World magazine and the talent-management group SBLG Entertainment. Now Simmons seeks to reinvigorate his company's advertising and marketing arm--Rush Media--by joining forces with Deutsch Inc., a billion-dollar Manhattan ad agency with high-profile clients that include: IKEA, Mitsubishi, Pfizer Pharmaceuticals and fashion designer Tommy Hilfiger.

The new venture--called dRush L.L.C.--is co-owned by Simmons and Deutsch CEO Donny Deutsch. The goal is to market "youth culture advertising" to the masses. "Black culture is the most influential culture in America," says Simmons. "White kids pick up what black kids are wearing or listening to, and it spreads. It's a unique role to be in."

Simmons' proven track record in business is what attracted Deutsch. "Youth culture dominates every trend," Deutsch says. "If you look at all the awards shows, music, clothes--they all reflect that. Russell Simmons is the epicenter of that urban youth culture movement."

Across many industries, more black businesses are looking externally to larger, better-connected companies for expansion. Simmons has the product, and now with Deutsch, Rush may achieve the means to broader distribution ."A lot of black businesses have had to fight to get our space, and we're still fighting," says Simmons. "We've carved out a niche of our own, but we've also limited ourselves. There's a new initiative now for black businesses--start thinking of ourselves as American and go out and get American dollars."

According to the Recording Industry Association of America (RIAA), only 20% to 30% of "urban contemporary" music--encompassing rap, hip-hop and R&B--is bought by black fans. Not surprisingly, nearly 45% of the genre's sales are to 10- to 19-year-olds, says RIAA spokesperson Alexandra Walsh. Now, entertainment executives are also trying to capitalize on youth spending power.

If statistics are any indication, dRush is poised for big time returns. Both Simmons and Deutsch say they have been looking for ways to tap the expanding youth market. Deutsch talked to Simmons' rival, Scan "Puffy" Combs, CEO of Bad Boy Entertainment, about teaming up while Simmons was negotiating with Chicago-based Draft Worldwide on a different deal. Like Simmons', Combs' world is diverse, with talent management, record production, fashion and two restaurants--Justin's in New York and Atlanta. But neither discussion led to a deal, leaving Simmons and Deutsch to consider a joint venture.

Both Deutsch and Rush have invested an undisclosed sum in dRush, although Deutsch Inc. will maintain a separate agency. Add his marketing experience to the mix of Simmons' wildly successful clothing line of Phat Farm, which has boutiques in New York and Los Angeles, his movies and his black star power, and the money should follow. From current projects with HBO and Coca-Cola, the newly formed dRush anticipates revenues of over $100 million this year, says Deutsch. Simmons is not shy about using his talent for other divisions of his organization. His clients frequently appear on the cover of One World as featured subjects. It's part of his promotion strategy, colleagues say.

"Russell has always been about making our brands foremost and prominent," says Anne Simmons (unrelated), part owner and dRush president. "It's his marketing philosophy. We're creating business solutions and our clients see that."