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SBD/July 17, 2013/Labor and Agents
Jay-Z Profile Examines Business Diversification, Culminating With Roc Nation Sports
Published July 17, 2013
STRIKE WHILE THE IRON IS HOT: For Jay-Z, acquiring a stake in the Nets was "all about changing perceptions -- and making connections." Drew Katz, whose father Lewis was selling the team to Bruce Ratner, but was "planning to hold on to a percentage, helped to broker an initial meeting" with Jay-Z. Katz: "My dad said, 'Being a partner with Bruce and me, you'll learn a whole lot more about how to make money.'" Jay-Z's investment of $1M "amounted to one third of one percent" of the franchise purchase price and "allotted him a similar interest in the planned arena and the rest of the Atlantic Yards real estate." However, those numbers "weren't publicized," and Jay-Z was "presented as a major partner." Jay-Z also had a "seat on the arena's board." Ratner said, "Everyone quieted down when he spoke about anything that had to do with marketing." However, there were "tensions, particularly during the messy period when Ratner was slashing payroll and struggling to move the team." When naming rights "became available for the Meadowlands arena where the Nets played," Jay-Z wanted to name it "the Roc" after his Rocawear brand, and he "made his displeasure known when he was outbid by Izod."
MARKETER'S DREAM: Sports agents are "a paranoid bunch, always on guard against rivals," but Jay-Z's entry into the business has "incited a different order of hysteria." One agent said, "Guys are just going to Jay-Z because they fetishize him." Fees for player contracts "are set fairly modestly," but the cut from marketing deals "is considerably higher, and that will be where" Jay-Z "concentrates his efforts." Ratner: "Jay-Z sees that the important thing in the world today is content." Former Island/Def Jam Music Group President Kevin Liles said, "Sports is just another piece of a portfolio that he's building to curate culture, to challenge the status quo. Why can't they start to make different demands in the sports business?" Despite selling his stake in the Nets, Jay-Z is "retaining his interests in the Atlantic Yards real estate, and he and Ratner are now seeking to expand their partnership further, by advancing a proposal to renovate the Nassau Colisuem" (NEW YORK, 7/22 issue).