Sponsored Ads 3

This shouldn’t come as a surprise to anyone. FORBES reported that Jay-Z would have to sell his stake in the team nearly three weeks ago, after he announced his intention to start representing professional athletes through his Roc Nation Sports. Given the new business venture, the NBA’s rules required him to relinquish his stake, as Jay-Z confirmed in his statement.
So what sort of return did Jay-Z get on that Nets investment? It’s hard to say for sure–no buyer or purchase price has been disclosed–but there’s evidence that his gains were on a Warren Buffett type of level.

Jay-Z purchased his stake in the Nets in January of 2004, investing a reported $1 million in the team. As of this fall, he held one-fifteenth of one percent of the Nets, according to the New York Times, but owned one fifth of one percent of the $1 billion Barclays Barclays Center. By FORBES’s estimates, the former stake is worth $350,000; the latter is worth $2 million.
What seems most likely is that, in preparation for the launch of Roc Nation Sports, Jay-Z began converting equity in the team into a stake in the Barclays Center, which he’d still be allowed to own as an agent.
Whether or not Jay-Z poured more money into the Nets beyond his initial investment, however, remains unclear. Assuming he did not, that would mean he turned $1 million into $2.35 million over the course of nine years, a gain of 135%. Over the same period of time, Warren Buffett’s Berkshire Hathaway Berkshire Hathaway stock has risen by about 85%.
And Jay-Z’s investment will continue to pay dividends–though he has confirmed the end of his career as a Nets co-owner, it appears he’ll hang on to his Barclays Center stake.
Coupled with the Rocawear store and his 40/40 Club in the arena, he’ll continue to profit from the Nets even though he’ll no longer directly own a piece of the team.
No wonder he says he’ll be a Brooklyn Net forever.

Zack O'Malley Greenburg

Post a Comment

Previous Post Next Post

Sponsored Ads