Jay Z keeps WININNG!!! Now a Sports Agent! Will sell his shares in The Brooklyn Nets!
His social circle includes the biggest names in sports. His celebrity cachet is unmatched. He has informally advised athletes on everything from housing choices to contract extensions.
Jay-Z has long been in the inner circle of A-listers like Alex Rodriguez and LeBron James, using their names in his lyrics and their star wattage to enhance his own. Now, he is making a move to turn those relationships into big business in a more formal way.
With a double-barreled announcement Tuesday that he was opening his own sports agency, and that he was stealing the Yankees star Robinson Cano from the most powerful agent in baseball, Jay-Z stands poised to shake up the sports world by offering athletes something they cannot find anywhere else: himself.
Roc Nation Sports is the newest arm of Roc Nation, Jay-Z’s “full-service entertainment company” that has quickly built a strong reputation representing artists like Rihanna, Shakira and M.I.A. Jay-Z has been temporarily licensed to represent professional baseball players, said Ron Berkowitz, a spokesman for Roc Nation Sports, which also has teamed with Creative Artists Agency, a leading Hollywood agency that provides formidable negotiating authority.
Jay-Z’s move into sports representation does not come as a complete surprise, considering he has long invoked sports in his lyrics alongside boasts about his entrepreneurial skills and his fashion sense. In fact, he has turned a Yankees cap into a sort of personal trademark, claiming in one song that “I made the Yankee hat more famous than a Yankee can.”
With the borders among music, film and sports growing ever blurrier, leading agents and their companies increasingly see sports as the next frontier. Athletes command contracts worth hundreds of millions of dollars — an irresistible prospect especially if the film industry continues to stagnate and the television and music worlds fragment further.
Creative Artists, which has long been a blue-chip Hollywood agency representing stars like Tom Cruise and Brad Pitt, now represents more than 800 athletes, including Carmelo Anthony of the Knicks and Buster Posey, who recently signed a $167 million deal with the San Francisco Giants. Creative Artists has been looking to expand even further into the sports world since at least 2010, when the agency sold a 35 percent stake to the buyout firm TPG Capital. That deal put Creative Artists and TPG Capital in control of a $500 million investment fund that included sports as one of its priorities.
“What a Jay-Z brings to the table is an ability to connect with the athletes in a way that a player agent who came up as a lawyer or accountant never will,” said Marc Ganis, president of SportsCorp, which brokers team sales. “Jay-Z can say, ‘We both came from humble beginnings, both of us have women chasing us, both of us want to make a lot of money, but not pay a lot in taxes.’ Then, there’s the aura around him.”
Roc Nation Sports represents the latest piece of the Jay-Z empire, which already includes nightclubs, video games, a clothing line and a small ownership stake in the Nets. It is widely seen as a savvy move that will capitalize on his success rebranding the Nets, and attract internationally known athletes, who double as some of his biggest fans. It also creates yet another potential windfall for him.
In baseball, agents typically receive 5 percent of a deal. Cano, a 30-year-old All-Star second baseman, is expected to command at least a $200 million contract whether or not he becomes a free agent at the end of the season, which means Roc Nation and Creative Artists could earn as much as $10 million on Cano alone. It was unclear how Roc Nation and Creative Artists would divide their fees, and how much Jay-Z would receive.
Roc Nation is the entertainment company that Jay-Z founded through the $150 million deal he struck with Live Nation in 2008. It has a record label with a handful of artists attached, as well as a music publishing division for songwriters, but the company, a joint venture with Live Nation, is primarily known for its management division.
Although still a boutique firm — the top management companies in music represent far more acts — Roc Nation has quickly built a strong reputation for innovative and aggressive management, in part because of the company’s president, Jay Brown.
“Because of my love of sports, it was a natural progression to form a company where we can help top athletes in various sports the same way we have been helping artists in the music industry for years,” Jay-Z said in a statement.
Cano will have his pick of suitors when his contract expires unless the Yankees re-sign him before then. He described the decision to sign with Roc Nation as a move to “take a more active role in my endeavors both on and off the field.”
But it was a drastic and very public breakup with his agent Scott Boras, who has established himself over the past 25 years as the most powerful agent in baseball, feared by owners and coveted by players. He has regularly negotiated major deals for many of the game’s biggest stars, seemingly always extracting far bigger contracts than anyone thought possible. In recent years, he has had a hand in securing $275 million for Rodriguez, $214 million for Prince Fielder and $18.9 million for Bryce Harper before he played a major-league game.
It is not unprecedented for a player to defect from Boras — Cano was the third Yankee to do so in recent years — but the decision still reverberated across the sports world on Tuesday.
Boras declined to comment.
The N.B.A. said in a statement that there was “no prohibition on N.B.A. owners having an interest in businesses that represent non-N.B.A. athletes.” The Nets did not describe how Jay-Z’s new arrangement would affect his role with the team other than to say, “We fully support all of Jay-Z’s endeavors.”
Berkowitz, the spokesman, said Jay-Z was concentrating on baseball, apparently steering clear of that potential conflict. “The main thing is to launch the company with an All-Star like Robinson Cano,” Berkowitz said.
Some analysts said that they expected that Jay-Z would add a sprinkling of celebrity dust to Creative Artists’ sports division, but that he would do little more than bring athletes to the table.
“This is really an arrangement with C.A.A.,” said Jordan Kobritz, the chairman of the sport management department at SUNY Cortland and a former owner of a minor league baseball team in Daytona, Fla. “Jay-Z is part of their recruiting arm because he has access, and is a public entity, and New York is his cradle.”
At least one rival agent dismissed Roc Nation’s move into sports as “a marketing deal.”
“I don’t know a lot about writing songs, and he probably doesn’t know about negotiating player deals,” said the agent, who declined to comment on the record about a competitor.
If Jay-Z does not know about negotiating such deals, he is about to find out — perhaps with some of the top players in sports.
Yahoo Sports is reporting that Mr. Carter is looking to "divest his ownership share" -- meaning sell off his share -- of the Nets. And it's all because he wants to expand his Roc Nation Sports division, which recently signed Yankee Robinson Cano, into the world of professional basketball. According to NBA rules, one cannot have ownership in a team and represent individual players at the same time. So Hov is going the agent route.
Yahoo Sports is reporting that Mr. Carter is looking to "divest his ownership share" -- meaning sell off his share -- of the Nets. And it's all because he wants to expand his Roc Nation Sports division, which recently signed Yankee Robinson Cano, into the world of professional basketball. According to NBA rules, one cannot have ownership in a team and represent individual players at the same time. So Hov is going the agent route.
He owns less than 1% of the Nets, but is undoubtedly the face of the franchise. He propelled the team to a big name status, and he's gotten rewarded in return with tons of publicity, lots of face time on and off the Barclays stage, and the opportunity to brand his existing catalog of music into the NBA franchise. Business doesn't always mean cash is involved....notoriety, platforms and clout are parts of the equation too.
It looks like Hov may be leaving with exactly what he came in to get, so it may be a win-win for everyone
