AICPA

The King of Bling

By Ralph Gardner, Jr., Start Here Magazine

As the financial guru who seals Bad Boy's deals, Derek Ferguson sees dollar signs, not stars, when he works with P. Diddy

If you walk into the average Manhattan Office tower in this post-9/11 world, you'll have to show picture ID and register on a sign-in sheet. But at Bad Boy Worldwide Entertainment Group on Broadway, the security is even tighter: You're required to have an escort—at least if you're headed to the fourth floor. "That's Puffy's floor," explains a security guard, who, befitting a corporation whose 14 divisions include Bad Boy Records, Justin's Restaurants, and Sean Jean Clothing, is impeccably dressed in a black suit, black shirt, and black tie. He accompanies visitors upstairs, saying: "You definitely got to have an escort. He's right next to him."

"He" is Derek Ferguson, Bad Boy's chief financial officer. And he's "right next" to Puffy, aka P. Diddy, aka Sean Combs, in more ways than one. Yes, he and the pop culture icon occupy adjacent offices in Bad Boy's surprisingly buttoned-down executive suite. But he's also Puffy's right-hand man, the person the music mogul and performer looks to before he leaps into a new business. "He's a very hands-on guy," Ferguson says of his boss, who may drop by his office a dozen times a day. "If I'm on the phone, he'll start chiming in about whatever I'm talking about on the phone. He's around a lot. He puts in a lot of hours in the office. His average day is 11 A.M. to 9 or 10 P.M. at night, and then he goes to the studio and works until 2 or 3 in the morning."

Just how did Ferguson land this hipper-than-thou job as the king of P. Diddy's bling? It was a long road that began when Ferguson, 39, attended the prestigious public Stuyvesant High School in Manhattan. He then set off to the University of Pennsylvania's Wharton School at the incredibly young age of 16. His formal education may have ended at Harvard Business School, but the lessons just kept coming. He says he's learned stuff from Puffy and his other bosses they don't teach in school.

Soon after graduation from Harvard, with a CPA credential in hand, he worked as an auditor and mergers-and acquisitions analyst at accounting firm Coopers & Lybrand in New York. Then, in 1988, Ferguson and a friend founded a lifestyle magazine for young African-American professionals, which they later sold. He spent a few years at Bain & Company, the strategic consulting firm where, he says, "My quest was to figure out what makes a company successful, what makes one win and the other lose."

Then music came calling. He was vice president of BMG Entertainment when Puffy handpicked him for CFO. "The first couple of deals we did I ran the numbers and said, ‘This is what the deal is, this is what you should get paid,'" Ferguson recalls. "He'd say, ‘I think I can go for ‘Y,'' and the figure would be higher! It was not scientific; it was based on his intuition. I learned very quickly there was a role for a celebrity premium. Although you're taught that numbers rule the day, sometimes the numbers don't rule the day. If you just look at it [a deal or even an annual report] like numbers on a page it will be boring," he admits. "But even at an entry-level position, if you start understanding what those transactions mean to the success or failure of a business, the job comes alive for you."

In the biz, numbers are in control. That's why Ferguson sits so close to the boss, whose arrival is imminent as noon approaches. The CFO's modest office boasts the obligatory platinum Bad Boy records, as well as a black leather "Sean Jean"–inscribed chair that used to belong to Puffy. "He comes in and says, ‘I got to get that Sean Jean chair back!'"

Puffy calls the creative shots. "Let's say we're going to sign an artist," Ferguson explains. "At the end of the day, he's the one who identifies the talent. My role is to put the parameters around it—to say, ‘You've got to sell 300,000 or 400,000 units to make money.'"

It's a role Ferguson has been playing since he was a teenager, when he went to work for his father's trucking company in the Bronx. "One of the reasons I was driven to accounting is that I did accounting for my father's business growing up," he explains. "I always say to people what's great about accounting is that when you learn about a business from the transactional level up, you learn about it more thoroughly than if you're learning about it from the bottom down."

"To me it was like a video game, a competition, looking at all the transactions to see, at the end of the week, did my father make or lose money?" The money didn't hurt either. "My dad used to pay me like an employee," Ferguson remembers. "My friends were amazed I was getting checks at 13. You learn that you work and you get paid. I always had money in my pockets."

These days it's quite a lot of money tucked into the pockets of his pin-striped suit. The executive, who lives in Connecticut with his wife and three children, pulls down a salary he describes as "well into the six figures." And then there are all those priceless red carpet moments, traveling in Puffy's electrically charged wake. "For me personally, it's not a perk I require," Ferguson confides. "Anything he's involved with has a certain glam level, from being at a Sean Jean fashion show to being at the Grammys to being a backstage at one of these performances. But it ultimately becomes part of what you do for the job.

"The reality with even him," Ferguson says, "is that by just watching him on TV you would never recognize how hard he works. There's a glamour side, but in his case, his success is really about hard work."

But what do you call a guy who keeps changing his name, from Sean Combs, to Puff Daddy, to P. Diddy? "He's your boss, so it's hard to call him P. Diddy," Ferguson admits. He blushes: "Probably for the first year I didn't call him anything."

© Copyright 2005, Start Here Magazine. All Rights Reserved.