An auction will be held at a Midtown Manhattan hotel on August 29, with a minimum opening bid starting at $1.2 million; interested bidders would have to post a deposit of $240,000 in advance.
That will mean Dash selling off his stake in Roc-A-Fella Inc., a company whose most prized asset happens to be the rights to Jay-Z's iconic debut album, Reasonable Doubt. All of the other music catalog from the rest of the music releases through Roc-A-Fella, which basically served as a label until its dissolution in 2013, is owned by others and won't be part of the auction.
Jay-Z and Kareem "Biggs" Burke, the other co-founders of Roc-A-Fella, had earlier attempted to halt the auction by filing a bylaw amendment to the company and intervening in the lawsuit but were rebuffed by a federal judge in February.
While the chance to have an ownership stake in a major part of rap history is sure to attract interest, a source familiar with the situation says the winning bidder will take home a minority interest with no say in decision-making. "Whoever buys Dame's stake in Roc-A-Fella will be a minority owner without authority over any type of decision-making," the source told Billboard. They won't be able to sell the copyright or borrow against the master as all decisions require majority vote." The source also indicated that ownership rights to Reasonable Doubt could possibly fall in 2031, when Jay-Z can exercise his right to reclaim the copyright 35 years after the album's release.
Webber's attorney, Chris Brown, who is organizing the auction, dismissed the idea of an imminent expiration date as "a ploy to push the auction price down." He said that the buyer will enjoy huge revenue from the millions of streaming royalties with other licenses in addition, and interest from potential bidders including corporate investors and high-profile people has been immense.
But Brown conceded the process lacks transparency around what exactly a winning bidder would be buying, which muddies due diligence. "That's the hard part because it's not like I have a judgment against Roc-A-Fella Records and they have no reason to turn over any documents," Brown said. "But any person in this business can go and find out what Jay's first album is doing on the streams."
According to Luminate, since being released in 1996, Reasonable Doubt has sold 2.2 million equivalent album units in the United States, including 21,500 so far this year.
Webber won his judgment in 2022 after suing Dash for copyright infringement and defamation over their failed film project, Dear Frank. The court ordered the auction as a result of Dash's failure to pay the judgment.
It's not just Dash: other parties are seeking to take their respective cuts out of the auction money. One of those is the NYCDSS, which tops the list of creditors, since Dash owes $145,096 in back child support. Brown is an attorney who already represented another client, photographer Monique Bunn, in separate legal actions against the rapper, who is trying to recover $155,000.
Any money left from the auction will go to Dash himself. His attorney, Natraj Bhushan, believes it could be a competitive auction with bidding likely to run into several million dollars, and household names from the world of sports and entertainment likely to be attracted.
In 2021, Jay-Z and Roc-A-Fella sued Dash when they got wind that he was intending to sell a stake in Reasonable Doubt as an NFT. Their case boiled down to the fact that Dash cannot sell what he does not own. Dash later signed a settlement agreeing not to sell any part of the album as an NFT or otherwise.
Last year, attorneys for Jay-Z, Biggs, and Roc-A-Fella attempted to halt the court-ordered auction of Dash's share. They contended that the sale violated updated company bylaws from 2021 that prohibited such an auction, but the judge ultimately decided in favor of Dash, ruling that the updated bylaws could not be applied retroactively since they were created without his input. Instead, the judge has ruled that Jay-Z and Biggs can now participate in the auction—on one condition: they be willing and able to top any other bid if they want to win.
Investing In Jay-Z Songs
If you're a huge fan of Jay-Z or just want to get started with music royalty investing, now you can do so on Royalty Exchange. On Royalty Exchange you can sign up as an investor and search through thousands of music catalog listings that include producer and songwriter royalties to some of the biggest songs of the past few decades.
Take this Jay-Z asset listing for instance. The buyer paid $190.5k back in October, 2018 to acquire lifetime rights of future earnings from the songwriter's cut of royalties from huge songs such as the legendary smash hit "Empire State of Mind" featuring Alicia Keys. While they've held the catalog for just under 6 years, they've already collected $232.1k in earnings. That's a total yield of 121.9% already in just under 6 years! The coolest thing about investing in a song like this is that it's super evergreen meaning listener consumption will continue for decades to come. The investor makes money from streaming, radio play, and public performance, so if Jay-Z or Alicia Keys performs the song during a concert or you even hear it when you're shopping at Target, this buyer gets paid!
The great thing about investing in music catalogs is that their performance is independent of financial markets as people are always consuming music. One amazing thing about this catalog in particular is that it's still growing as the song's popularity continues to skyrocket. The earnings for the investor who purchased the catalog reached $68.1k in the past twelve months, an increase of 15.9% more than the catalog's 3 year average earnings! You can see just how insane the growth in earnings from streaming and listener consumption from that source has increased since 2020. The earnings from this asset listing were $15.6k in 2020 and have since increased by 335% in annual earnings for the buyer.
We’ve prepared this guide on Royalty Investing Made Easy to help you out if you want to get started investing in music royalty catalogs.
At Royalty Exchange, you can choose from thousands of the most popular songs to invest in. There are a ton of legendary rap catalogs from artists such as Kendrick Lamar, Lil Wayne, even 90's hits like "I Got 5 On It". We offer hundreds of catalogs that are up for auction today, so sign up as an investor to get started.
Discover why so many investors today are actively searching for the next best music catalog investment deals.
