Jay-Z's 99 problems (Sour economy gives mogul's investments a bad spin)

[The Dre Era]

http://www.nypost.com/rw/nypost/2010/05/16/news/photos_stories/Cropped/jayz_beyonce--300x450.jpg
AT age 40, he's an elder statesman in the young man's game of rap -- and he has said many times it may be tough to keep viable in the music game as he gets older.

Perhaps that is why he has been looking to beef up his real estate holdings and launch J Hotels, his luxury hotel brand. But it hasn't been easy.

In August 2007, a company he controlled borrowed $52M to purchase a piece of real estate between 21st and 22d streets in order to develop a luxury J Hotel. He walked away from the project and loan during the recession and has recently filed suit against the lender, Highland Capital, for "bleeding" him of interest payments.

In another failed real estate project, Jay-Z and a group of partners spent $30 million for 345 W. 14th St. in 2007 with plans to turn it into a hotel. Then the recession hit, and Jay-Z and his partners defaulted on the $24 million mortgage and tried to stick their lender with the property.

The lender didn't want it, either, and legal wrangling was resolved only last month when a third company bought the debt at a discount.

A spokesperson for Jay-Z did not return requests for comment.

This is no time for Jay-Z to get on a losing streak.

His close friend, NBA superstar LeBron James, is to become a free agent this summer and Jay-Z would love nothing better than to woo him to sign with the Nets.

Jay-Z Inc.’s winners

* Live Nation deal
Cuts deal with concert-promotion company valued at roughly $150 million over 5 years, which includes funding for Roc Nation — a music development, promotion company for Jay-Z. Roc Nation and Live Nation will split profits on album and concert revenue. The deal includes funding for Jay-Z music, acquisitions and investments.

* Rocawear
Co-founded the apparel company in 1999 with Damon Dash. Bought out Dash’s 25% stake for $30M in 2005. Grew sales to roughly $700M by March 2007, when he sold it to Iconix for $204M.

* Real Estate
314 West 11th St.: Owns the building that houses The Spotted Pig.

TriBeCa Penthouse: Paid $6.85M for 8,000-square-foot home in 2004. Patio where Jay-Z married Beyonce.

Jay-Z inc.'s mixed bag

* 40/40 Club:
• Clubs in NYC, Atlantic City. The Las Vegas club, at 24,000 square feet, opened in the hotel-casino Palazzo in January 2008, with more than 80 plasma TVs. It closed eight months later when, after disappointing traffic, Jay-Z sold the lease back to the hotel. It was tuned into a race and sports book, with a specialty restaurant.

• Plan to open clubs in Chicago, Tokyo and Macau. Chicago location is 15,000 square feet and was first expected to open in 2009. The club’s Web site now says a 2010 opening is in the works.

Jay-Z Inc.’s losers

* NJ Nets:
• Paid $4.5M in December 2004 for a minority stake in the team. Sale price of $300M means he owns 1.5%. Forbes valued the team at $269M this season, down 9% from the previous season. Operating deficit of 13.9M. In 2004, Team owner Bruce Ratner said he wanted to have team in Brooklyn for the 2006-07 season but 2012 looks more promising.

* Gain Global Investments Networks:
Company owns a 7 percent stake in the group that was chosen and then lost a deal to develop a Racino at Aqueduct Racetrack. Jay-Z owns a 28.6 percent stake in AEG.

* NYC Real estate:

• 345 West 14th St.: part of a group that borrowed $30M to buy Meatpacking District building for development. Plans went south during recession. Sold loan for $19.5M.

• 510 West 22nd St.: In August 2007, a company he controlled borrowed $52M to purchase the land in order to develop a luxury J Hotel. Walked away from the project and loan during the recession. Sued lender, Highland Capital, for “bleeding” him of interest payments

Read more: http://www.nypost.com/p/news/business/jay_NJOKUMG51yyYswtQo2zrJL/2#ixzz0oCSPh3SA

[The Dre Era]

JAY-Z, born Shawn Carter, co-founded the uber-successful Rocawear business in 1999 and, through his hands-on management style, grew it into a $700 million juggernaut. After he bought out partner Damon Dash's 25 percent stake in the company for $30 million in 2005, he sold it for $204 million in 2007 to publicly traded Iconix Brands. JAY-Z remains the CEO of the brand and is in line to pocket an additional $35 million in stock if sales hit certain plateaus.

Sources say the brand is a top seller this spring, thanks to Jay-Z's decision two years ago to minimize the logos on the clothes and streamline the baggy pants that once defined hip-hop

"He knew that would be a trend before everyone else did," Iconix chief executive Neil Cole tells The Post.

"Jay-Z has earned street cred and business cred," says Tim Bess, men's and children's fashion analyst at Doneger Group. "He's one of the very few involved in hip-hop able to cross that line."

IN 2009, Jay-Z, who has more No. 1 albums than any artist except the Beatles and Elvis and has sold about 26.3 million CDs over his career, inked a $150 million deal with Live Nation -- and then put together one of the most successful tours of the 2009-10 season. The tour came on the heels of his earning $35 million in 2008-09 and $82 million the previous year, according to Forbes.

Just last week, Jay-Z, showing his masterful marketer touch, sent fans into a frenzy by announcing he and fellow rapper Eminem will perform the first concert in the new Yankee Stadium -- after joining together for a concert in Comerica Park in Detroit, Eminem's adopted hometown.

Jay-Z can market just about everything but a breakfast cereal because he's got huge talent and a savvy business manager, John Meneilly, a former Provident Financial executive.

Some smaller investments in Jay-Z's portfolio have also come up winners. In 2005, in his first investment alongside Will Smith and his wife, Jay-Z bought a piece of a small cosmetics company, called Carol's Daughter. He has helped the privately held company grow sales to about $35 million, an eight-fold increase, co-CEO Steve Stoute told The Post.

Stoute said Jay-Z and the ownership team are looking at other beauty acquisitions.

The rap star is also sitting pretty with his investment in the Greenwich Village building that houses the popular eatery, The Spotted Pig. He's an investor in the restaurant, too, and has often been seen there with his wife Beyonce.

Read more: http://www.nypost.com/p/news/business/jay_NJOKUMG51yyYswtQo2zrJL/1#ixzz0oCSpeIbM

[Qwasian]

if jay-z do the brooklyn nets and lebron deal, it's a wrap, he will be a billionaire in no time........ if not I think he will kinda hold on to his money & fade a bit, until the economy bounces back.....

some of his money bounced around is for other shit, sometimes you have to take a loss to win, like he invested in the nets to make a win on the brooklyn thing, and the lebron thing..... not to make money.... he threw away money on purpose for branding his name to make money in other areas.

I honest think lebron might stay in cleveland, he already has the money.. and a nike contract, not sure he needs anything else, NBA wise... not 100% sure the nets could get it done either, I'd like to see him stay in cleveland, new coach, move a few players around & get wade, stoudamire, or bosh.....

jamison was a useless acquire in my opinion, shaq too.....

[The Dre Era]

1.5% ownership of the nets is not much though
i heard there are like 30 other partial owners of the team

[Qwasian]

yeah I know I think it just sneaks him in the backdoor of the office to be able to put thoughts in peoples head

[Nah]

I didn't know about AEG and Carol's Daughter. He made some wise moves. Not all of them were/are winners, but he definitely wasn't just throwing money around. He made sure everything was relevant to his brand.

[Smoka]

http://img179.imageshack.us/img179/9359/30929699.jpg (http://img179.imageshack.us/i/30929699.jpg/)

[Wallace341]

For some reason whenever i see Hov mingling with the "Big Business" side of things, or see him step out of "urban" lane all i can think of is Stringer Bell and how "Big Business" pretty much played him for his bread. It's no walk in the park to be a member of the billionaires club. The Billionaire circles really don't want Jay to be a part of them. Hell wasn't he denied the oppurtunity to BUY and reside in a Condo in his own city of New York some time ago?

[BasedGodLegend]

Hunnit Thousand ma niggguhhhhh x Strong Pak, ow

[Qwasian]

no class of people wants to make it easy for the class beneath them to move up, never have, never will.... and that's on any level...... nobody is giving handouts especially when dealing with millions/billions....... why would they? they have to be on top of they shit so they money don't fuck up