Tuesday, November 15, 2005

The Source Owners Deny Stoute Buyout

The Source Magazine has responded to Steve Stoute's claims that he wants to buy the publication by calling him a liar and accusing him of spreading false rumors.

Back on November 3rd, during an interview on New York's Hot 97 radio station, Stoute revealed that he, Russell Simmons, Jay-Z and Warner Music Group's Lyor Cohen were interested in buying The Source. According to the self-proclaimed "Hip-Hop Bible," Stoute's assertions were untrue.

Simmons released a similar statement late last week via Rush Communications, "Russell Simmons has expressed zero interest in a business affiliation of any kind with The Source Magazine, nor has he had any conversations of any kind on the subject. Russell considers The Source an important voice and wishes it every success in the future."

Meanwhile, The Source says that reps for Cohen and Will Smith, who was also rumored to be interested in the mag, both denied Stoute's claims. Stoute is closely linked to Interscope. He is the label's former Vice President and the company recently bought a stake in his Translation Consultation and Brand Imaging marketing firm.

The Source believes that Stoute invented the buyout story to take attention away from the magazine's current investigation into the music industry's shady practices. The Source has taken several shots at Interscope Chairman Jimmy Iovine, Eminem, 50 Cent and his G-Unit during their investigation.

Stoute's claims come several weeks after reports surfaced that the magazine was in financial trouble. The Source reportedly owes Textron Financial Corp. $18 million and has lost $11 million in the past four years. In New York State Supreme Court, Textron recently requested for The Source Enterprises to be placed into its control to prevent owners Dave Mays and Raymond "Benzino" Scott from ruining the company.

The Source has also failed to file any state and/or federal income tax over the course of the last two years. Also, the magazine has not delivered issue subscription mailers the publication, and a lawsuit regarding that is still pending. The case states that nearly $3 million in bad checks, over the past nine months, have not been paid for.

The Source is scheduled to return to court for a preliminary hearing with Textron Financial Corp. December 6th.

From Shades of Hip Hop

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