In less than a month entertainment mogul, hip hop impresario and overall ‘business-man’ Sean Carter better known as Jay Z sold shares in businesses/brands he owns that total more than a few hundred million dollars. Fifty percent of the rappers luxe Armand de Brignac champagne was sold to french luxury conglomerate LVMH. The bubbly known by so many as Ace of Spades joins the ranks of Dom Perignon, Moet & Chandon, Veuve Clicquot and others all owned by the same luxury powerhouse. For those not familiar with LVMH - Louis Vuitton Moet Hennessy is a world leader in high quality products and brands such as Louis Vuitton, Fendi, Christian Dior and many others.
Shortly after this news settled in Jay Z’s streaming platform made headlines. Twitter CEO Jack Dorsey’s digital payment company Square acquired TIDAL in blockbuster deal that moves Jay Z to Square’s board of directors. TIDAL if you remember was acquired in 2015 by Jay Z in a deal that brought aboard artist owners like Kanye West, Nicki Minaj, Madonna, Rihanna and Daft Punk among others. Although figures on both deals have not been officially reported, numbers like $297 million in cash and stock have been reported on the TIDAL deal and upwards north of that figure as it relates to the Ace of Spades cashout.
Now that the foundation has been set, let's talk.
As the news of these deals became public there was a fervor, an excitement, a fascination with the names involved with these transactions that was only heightened as details emerged as to what Jay Z was suspected of profiting. Known as the first rapper to reach a ‘B’ (Billion for those uninitiated), there’s a very peculiar fascination with these deals and very little discussion of the impact of these deals. On the culture.
Allow me to introduce the fact that I worked for LVMH and aspects of their business model is one that I have incorporated into my business strategy as it relates to my luxury consultancy - Paradigm Luxury Group. The deals made recently by Jay Z serve only as a backdrop to a larger discussion that I want to explore. Believe it or not this is bigger than Jay Z.
In the midst of individuals posting congratulatory messages on social media, equivalent to proudly flaunting their participation awards - something died. Many of these ‘fans’ of the deal had little to no awareness of who and what LVMH is, certainly uninterested in the potential impact long term.
If Jay Z represents what’s possible in communities of color and a template for entrepreneurs who aren’t born into generational wealth to dream and imagine then we have to examine the underlying message. Building individual wealth surpasses cultural capital. There’s certainly nothing wrong with capitalizing on the businesses we create.
But the larger perspective addresses the fact that if we continue building up companies only to sell to companies that are not owned by us, how do we become the next LVMH?
The interesting dynamic of the black excellence movement fueled by ‘black ambition’ is that it seems to have a ceiling. Once we’re offered an amount that undoubtedly is significant, suddenly we are willing to sacrifice the potential to create our own conglomerate. The same corporations and moguls who didn’t participate in the build up are happy to profit off the cultural power that we bring to the table - only once there’s a track record. Was there no emphasis on the past success of a Jay Z when he decided to acquire TIDAL or build the Ace of Spades brand? This reminds me of the infamous talented 10% philosophy of W.E. Dubois.
The idea that 10 percent of people of color will be educated and then uplift the rest. The problem is that the 10 percent generally never does that.
Songs like ‘Entrepreneur’ by Jay Z and Pharrell give the impression that creating industries driven by people of color is necessary, which it is. Far too often our community is leveraged in the name of ‘business.’ How is that any different than what has been done historically? This time it’s being done by people who we are to assume are for us.
The personalization so many have attached to the recent deals made by Jay Z should spark entrepreneurs to ask themselves these questions. Black culture is powerful, wealthy and driving many industries. The limitations on what can be done have been eradicated, nothing out of reach. Given recent business headlines you may see a day when LVMH, Square or some other conglomerate sells half of their business to someone like Jay Z as opposed to the other way around. After all, they support black ambition right?