Shawn Carter, better known as Jay Z, is the embodiment of the American Dream. Raised in Brooklyn’s Marcy Projects, Carter parlayed his success as a rapper to become one of the world’s most culturally relevant and successful entrepreneurs. Following the sale of his champagne brand and music streaming platform, hip-hop journalist Soren Baker explores Carter’s recent windfalls using song lyrics to demonstrate how Jay Z is the G.O.A.T. in more ways than one.
In less than a month, Jay Z almost doubled his net worth. For the average person, that would be life changing money. For someone already worth in the neighborhood of $1 billion, it boggles the mind.
The New York magnate did it by selling half his champagne brand, Armand de Brignac, to LVMH, the world’s most valuable luxury goods conglomerate, in February. A week later, the rapper-cum-entrepreneur sold the majority stake in his TIDAL streaming service to Jack Dorsey’s Square for a reported $297 million.
These two nine-figure deals show Shawn Carter’s business savvy, and are illustrative of how he’s been able to build his brand, first as a musician and now as a businessman.
Using lyrics from Hova’s discography, here’s how he did it.
“Put me anywhere on God’s green Earth/I triple my worth”
– “U Don’t Know” from 2001’s The Blueprint
LVMH is comprised of 75 houses including Louis Vuitton, Fendi, Dior and Givenchy. Each one represents class, wealth, prestige and exclusivity in its own way. Both literally and figuratively, LVMH represents the aspirations of rappers. It’s as true today as it was when Hova came of age in the ‘80s and ‘90s. Introduced through his mentor Jaz in 1989, Jay Z was willing a future for himself with his cashmere thoughts.
When he entered the rap game in earnest in ’96, Jay fancied himself spending money and living lavishly, while simultaneously presenting himself as a superhero on the mic. On “Can’t Knock The Hustle,” for instance, the Brooklynite buys three full-loaded BMWs, boasts that his Vitamin D is on Don Juan DeMarco levels, spells out his plans to acquire assets and brags about his Godfather flow.
Today, Jay Z is known as a master of all those things. As a rapper, he’s top-shelf, viewed as the Greatest of All Time by many. As a businessman, he’s routinely mentioned in the same breath as visionary tech leaders. As a pop culture institution, he’s an icon that towers over everyone not named Beyoncé.
The secret to Jay’s influence is his omnipresence. Although he appears to be everywhere at once, he’s actually more exclusive than he’s been in years. He judiciously selects his media appearances. Guest features on songs from other artists are increasingly rare. In all cases, his restraint pays dividends. Today, anything Jay touches instantly turns to gold, including champagne. He’s rap’s version of Midas.
By acquiring Armand de Brignac, LVMH is buying into Hova’s success and something else Jay Z has in spades: an ability to reach an audience that stretches from 18 to 54, a remarkably wide range whose spending power can’t be ignored.
The older end of that spectrum has been riding with Jay since the mid-90s when he became a rap force through his debut album, Reasonable Doubt. His younger fans, meanwhile, appreciate his business acumen and civil rights activism, both seen as admirable uses of a global platform in an increasingly polarized world.
It’s why legacy brands want to get into business with Hova—even if they’re already in that business. After all, the “M” in “LVMH” stands for “Moet,” a French champagne brand founded in 1743.
“I sell ice in the winter, I sell fire in Hell/I am a hustler, baby, I’ll sell water to a well”
– “U Don’t Know” from 2001’s The Blueprint
The LVMH deal is an even bigger win for Jay. LVMH trades in a currency most rappers can only rap about. Now Jay is part of it. He’s not a guest in the room. He’s one of the people who helps decide who gets in the room.
Jay benefits from the organizational support and distribution reach of LVMH, a global behemoth.The partnership also deepens the relationship between the rapper and LVMH, which teamed with Rihanna in 2019 to create the Fenty fashion line. Rihanna, of course, is represented by Roc Nation, Hova’s sports and entertainment company.
What Jay’s new partnership comes down to is true influence, especially considering LVMH’s tight grip across industries, from wines and spirits to fashion and leather goods. The bar to enter into these worlds is extraordinarily high. Hova just jumped over it.
I’m grateful for Jay’s vision, wisdom, and leadership. I knew TIDAL was something special as soon as I experienced it, and I’m inspired to work with him. He'll now help lead our entire company, including Seller and the Cash App, as soon as the deal closes. https://t.co/YRfYjcWJQx pic.twitter.com/xBtq2xfwue— jack (@jack) March 4, 2021
For Jay, this move is about power, partnerships and his team. By joining the LVMH family on his own terms, Jigga’s influence stretches deeper and wider around the world. These are companies that have been dominant, impactful and significant for centuries.
Philippe Schaus, the chief executive of LVMH’s wines and spirits business, made it clear that his company’s lily-white image benefits from Jay’s status as a Black leader of culture. Thus, it’s not a stretch to imagine that Jay’s keys to the castle may soon open doors to some of the other houses in LVMH’s vast kingdom.
This is not new money. This is the rarefied world of Picasso’s and Basquiat’s. And these are Jay Z’s new business partners, the people behind some of the most powerful luxury brands in the world.
“I’m not a businessman, I’m a business, man”
– “Diamonds From Sierra Leone (Remix)” from Kanye West’s Late Registration in 2005
When Jay Z spearheaded the purchase of TIDAL for a reported $56.2 in 2015, the transaction was met with skepticism and shrugs. Spotify was the ruler of the streaming world and Apple Music, under the creative direction of industry veteran Larry Jackson, promised to make inroads soon. At best, TIDAL was viewed as a distant third.
Over the next few years, TIDAL boasted exclusive releases from music titans including Beyoncé, Rihanna, and Jay himself, among others. Even with such coveted material, the wave of TIDAL never really crested.
What didn’t seem to translate to pop culture, however, still earned Jay Z a massive financial return. Square, a financial services company founded by Jack Dorsey and Jim McKelvey, reportedly bought TIDAL for $297. Jay Z is said to have pocketed $149 million in cash and stock from the deal, nearly tripling his initial investment.
For Jay Z, it was politics as usual.
I said from the beginning that TIDAL was about more than just streaming music, and six years later, it has remained a platform that supports artists at every point in their careers. Artists deserve better tools to assist them in their creative journey.— Mr. Carter (@sc) March 4, 2021
By surveying the landscape and purchasing TIDAL six years ago, Jay Z understood what others didn’t. He saw value in high-fidelity streaming music and video content, the cornerstones of TIDAL’s service.
TIDAL won in ways its competitors couldn’t. It held a monopoly on Kanye West’s The Life Of Pablo album in February 2016, exclusively releasing the LP more than a month before it hit Spotify and Apple Music.
While TIDAL’s user numbers and growth are shrouded in as much secrecy as a Dr. Dre album, the service’s presence and partnerships with A-List talent (Beyoncé, Kanye West, Rihanna), telecommunication giant Sprint and others made it a viable source for exclusive music, concerts and events, all neatly tucked behind its own digital velvet rope.
So even if the company was a marginal player in the streaming game, it still resulted in a nine-figure payout for an eight-figure investment. That’s the type of return that successful businessmen make – and that keeps them in business, successfully.
“Told me don’t wait on nobody, get your own/So with my, myself, and my microphone/I made it”
– “I Made It” from 2006’s Kingdom Come
As he broke into the music industry in the mid-1990s, Jay Z was met with constant rejection. Rather than give up, he formed Roc-A-Fella Records with partners Damon Dash and Kareem “Biggs” Burke.
After teaming with Freeze Records and Priority Records to release Reasonable Doubt, Roc-A-Fella Records locked in with iconic rap imprint Def Jam Recordings for a remarkable run that lasted more than a decade and netted more than 20 million albums sold.
That relentless pursuit of opportunities stands as a hallmark of Jay Z’s career. When it seemed as though there was no opportunity for Hov, he figured out a way to make it happen, to change the game. Then he used his proceeds from fulfilling those dreams to create new revenue streams, to launch new businesses, and, in his own words, become a business, man.
Back in ’96, Jay rapped on “Dead Presidents II” about stacking cheddar forever, that moving his product helped him accumulate dough like snow. He didn’t want to just shine, but to illuminate and to swing for the fence.
Jigga also knew that everything started with rap for him, that it was his entrance into the world of legitimate business. Rap was his product, but it was a product, a means to an end. Clothing. Management. Record label. Endorsements. Jay applied his street savvy to all those businesses—and others—and became a billionaire in the process.
That’s why LVMH wants to be in the Jay Z business and was willing to pay handsomely for the opportunity. He’s got quite the track record.