How Jay-Z`s Influence on the Nets Eclipses His Ownership Stake

5 years ago by in Lifestyle, Music

Jay-Z

























When the developer Bruce
Ratner
 set out to buy
the New Jersey Nets and build an arena for them in Brooklyn, he recruited
 Jay-Z,
the hip-hop superstar who grew up in public housing a couple of miles from the
site, to join his group of investors.

Mr. Ratner may have thought he was
getting little more than a limited partner with a boldface name and a youthful
following that could prove useful someday. But Jay-Z’s contributions have
dwarfed the $1 million he invested nine years ago. His influence on the project
has been wildly disproportionate to his ownership stake — a scant one-fifteenth
of one percent of the team. And so is the money he stands to make from it.

Now, with the
long-delayed BarclaysCenter arena nearing opening night in September and the
Nets bidding in earnest for Brooklyn’s
loyalties, Jay-Z will perform eight sold-out shows to kick things off. But away
from center stage he has put his mark on almost every facet of the enterprise,
his partners say.

He helped design the
team logos and choose the team’s stark black-and-white color scheme, and
personally appealed to National Basketball Association officials to drop their
objections to it (the N.B.A., according to a person with knowledge of the
discussion, thought that African-American athletes did not look good on TV in
black, an assertion that a league spokesman adamantly denied). He counseled
arena executives on what kind of music to play during games. (“Less Jersey,” he urged, pushing niche artists like Santigold
over old favorites like Bon Jovi.)

He even coached them
on how to screen patrons for weapons without appearing too heavy-handed. (“Be
mindful,” he advised oracularly, “and be sensitive.”)

In the two and a half
years since groundbreaking, as taxi-roof advertisements promised “All access to
Jay-Z,” and sponsorship salespeople trumpeted how “hip and cool” he and his
wife, Beyoncé, would make the arena, he and the Nets have effectively written a
new playbook for how to deploy a strategic celebrity investor.

If it has been done
elsewhere — see Usher with the Cleveland Cavaliers, Will Smith with the
Philadelphia 76ers, and Jennifer Lopez and Marc Anthony with the Miami Dolphins
— no team has come close to making as much out of a famous part-owner.

And none of the dozens
of other current and former part-owners of the team have played so public a
role — not even Mary Higgins Clark, the best-selling author, though she read to
children at a Nets literacy event.

“He is it,” Mr.
Ratner, the developer, said in an interview. “He is us. He is how people are
going to see that place.”

Jemal Countess/Getty Images

As much as his
partners, including Mikhail D. Prokhorov, the Russian billionaire who bought 80
percent of the team in 2009, are getting out of him, Jay-Z, whose real name is
Shawn Carter, is benefiting handsomely, too, beginning with free use of one of
11 exclusive “Vault” suites, for which paying customers are charged $550,000 a
year.

Suite owners will have
access to a Champagne
bar serving Armand de Brignac, an expensive bubbly that Mr. Carter promotes and
in which he holds a financial interest, according to a biography by a writer
for Forbes. The arena will contain a 40/40 Club, an iteration of his
sports-bar-style nightclub chain. There will be a Rocawear store, selling his
clothing line, on the arena’s exterior. Even the advertising agency used by the
Nets, Translation, is half-owned by Mr. Carter.

There is also an
important intangible asset, particularly for a rapper: the bragging rights that
Mr. Carter has enjoyed as a part-owner since Mr. Ratner’s group paid $300
million to acquire the Nets. His slender stake was enough for Mr. Carter to
thump his chest in his lyrics, promising to “bring you some Nets.”

Mr. Carter has
capitalized further on his Nets investment by extending the Jay-Z brand into
endorsement deals normally reserved for elite athletes. He stars, wearing a
Nets cap, in a Budweiser TV commercial that was broadcast during the Olympic
Games. And he was named executive producer of the basketball video game, “NBA
2K13.”

All told, he has
achieved a remarkable feat of leverage with his tiny sliver of the team, which
was reduced from one-third to one-fifteenth of a percent upon Mr. Prokhorov’s
purchase of the Nets, according to people aware of the deal terms. (Mr. Carter,
who declined to be interviewed for this article, retains a slightly larger sliver
of the arena itself — just under a fifth of a percent.)

As if to slam that
point home, when the Nets placed a 222-foot-tall billboard near MadisonSquareGarden depicting Mr. Carter and Mr. Prokhorov as their “blueprint for greatness,” the
two were shown at the same size, with Mr. Carter up front.

Michelle V.Agis/The New York Times

Mr. Ratner said he was
seeking both sizzle and “credibility — which we needed badly,” when he first
approached several other celebrities in 2003 about helping him acquire the
team. Then he was introduced to Mr. Carter by Drew Katz, the son of one of the
Nets’ principal owners, after Jason Kidd, then the Nets’ marquee point guard,
suggested that Mr. Carter buy the team.

Mr. Carter’s
credibility was indisputable: a product of the Marcy Houses, he had an early
career as a drug dealer (and kept a “stash spot” two blocks from the arena
site, according to one of his songs) before becoming one of the most successful
rap artists of all time. He had also shown talent as a businessman, creating
his own record label and what soon became a wide range of other business
ventures.

Mr. Ratner was wary.
He often says he overcame his concerns about Mr. Carter’s more offensive lyrics
— celebrating gangster culture and denigrating women — only after learning
there were cleaned-up “radio versions” of the songs, too. And Mr. Carter, he
said, appeared nervous about having to meet with David Stern, the N.B.A.
commissioner, who asked him to discuss his guilty plea to stabbing a record
producer in 1999. (Mr. Carter described the incident, for which he received
three years’ probation, as a symptom of “the world I lived in once,” Mr. Ratner
recalled.)

Mr. Carter’s
involvement frustrated opponents of Mr. Ratner’s development plans in Brooklyn who saw the arena and proposed residential and
office towers as a subsidized land grab that could ruin the neighborhood. They
complained that residents who might have been wary of Mr. Ratner’s promises to
create jobs, nonetheless trusted Jay-Z, who invoked his roots and insisted he
could never support “anything that’s against the people.”

“Bringing in someone
who grew up in public housing, with a rags-to-riches story, who could identify
with Brooklyn and African-Americans, that was
slick,” said City Councilwoman Letitia James, a critic of the project. Mr. Ratner
played down Mr. Carter’s importance in overcoming opposition. “Had Jay-Z not
come along,” he said, “we’d still have an arena.”

In the early years, as
the Nets made playoff runs, Mr. Carter freely associated himself with the team,
attending games and suggesting how to entertain V.I.P.’s in style, said Brett
Yormark, chief executive of the Nets. “He and I would talk about how we could
use New Jersey as a lab experiment for Brooklyn,” he said.

He also made himself
useful to the basketball staff, persuading Shareef Abdur-Rahim of the Portland
Trail Blazers to accept a 2005 trade to the Nets (an injury scuttled the deal)
and giving Vince Carter a pep talk after he played poorly in two playoff games
in 2007 (he responded with 37 points in the next game).

A shopper browsing Nets` merchandise bearing logos that Jay-z helped design      Todd Heisler/The New York Times

But the rap star
pulled back from the Nets as their fortunes faded and they failed to make the
playoffs after the 2007-8 season. “He’s very brand-conscious,” a Nets official
said.

It was only after the BarclaysCenter had cleared all hurdles in
December 2009 that Mr. Carter unabashedly stepped forward. He courted LeBron
James on behalf of the Nets in 2010 and pursued Carmelo Anthony a year later.
And when the Nets’ newest star, Deron Williams, needed advice on where to buy a
home, Mr. Carter told him to call.

Aaron Goodwin, an
agent who has represented many young players who became N.B.A. stars, said Mr.
Carter’s involvement had improved the image of the Nets in athletes’ eyes.
“They’re going to take the phone call now,” he said. “They’re going to take the
flight in. They’re going to listen. In years past, the Nets wouldn’t have
gotten that. But now they’re in the game.” Mr. Yormark said Mr. Carter was not
receiving a fee for his advice or any special deals for his businesses. Yet he
has attended both quarterly meetings of the arena’s board of directors, sitting
to Mr. Ratner’s right, and keeps in frequent touch by phone and e-mail with Mr.
Yormark.

During the Nets’
free-agency deal making this summer — obtaining Joe Johnson and re-signing Mr.
Williams, among others, in hopes of improving upon their 22-44 record last
season — Mr. Yormark received a call from Mr. Carter, who was following the
team’s moves on television. “He said he was watching ESPN,” Mr. Yormark said,
“and the size of our logo was too big, because the word Brooklyn was getting cut off on the ticker at the bottom of the screen. He said, ‘Call
ESPN and get them to fix it.’ And he was right. And then they fixed it.”

When Mr. Yormark next
sat down for a meeting with Mr. Carter, he recalled, the rap star reminded him
of this, saying: “Brett, I’m watching. And every detail matters.”

This
article has been revised to reflect the following correction:

Correction: August 17, 2012

An article on Thursday about the influence of
the hip-hop superstar Jay-Z in building up the Brooklyn Nets, of which he is a
part owner, erroneously included a former government official among other
co-owners. Robert E. Rubin, the former Treasury secretary, is not an investor
in the Nets. (Robert S. Rubin, the former president of the
BrooklynMuseum,
is a co-owner.)



By David M.HalbFinger

Via The New York Times 

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