April 3, 2008
And the winner is Hov..
According to the New York Times, the new the deal is the most lucrative one offered by Live Nation and is set to be finalized by week’s end. The deal will see the rapper/entrepreneur leaving Def Jam to start Roc Nation, a parent company which will house several of Jay’s business ventures.
The terms will include financing for his own entertainment venture, in addition to recordings and touring for the next ten years and will see Jigga splitting profits with Live Nation. The deal is aiming to position Live Nation to compete directly with major labels in the areas of record distribution as well as concert tickets and market merchandise.
“I’ve turned into the Rolling Stones of hip-hop,” Jay-Z said in a interview with the Times.
As part of the arrangement, Live Nation would finance the start-up of Roc Nation which are expected to include his own label, music publishing, and talent consulting and managing. Live Nation is expected to contribute $5 million a year in overhead for five years, with another $25 million available to finance Jay-Z’s acquisitions or investments, according to people in the music industry briefed on the agreement.
The one of a kind deal also includes an upfront payment of $25 million, a general advance of $25 million that includes fees for his current tour, and advance payment of $10 million an album for a minimum of three albums during the deal’s 10-year term. A series of other payments adding up to about $20 million is included in exchange for certain publishing, licensing and other rights.
Jay himself sees the deal as a way “to reach the consumer in so many different ways right now. Everyone’s trying to figure it out. I want to be on the front lines in that fight,” he said.
“In a way I want to operate like an indie band,” he said. “Play the music on tour instead of relying on radio. Hopefully we’ll get some hits out of there and radio will pick it up, but we won’t make it with that in mind.”
Live Nation chairman Michael Cohl says that he has high hopes for the new deal, even though many industry figures are doubting the potential success due to the industry’s current climate.
“What he’s done has kind of mirrored what we want to do and where we think we’re going.”