« Forest City stock seen as bargain by investment analysts from firms that have a business relationship with the company | Main | Reisman: Forest City Ratner exec's resignation conjures up Sandy Annabi case »

February 9, 2012

Jay-Z steering Barclays style, also making bank on the champagne served in the luxury suites?

Atlantic Yards Report

Hey, if Forest City stock gets talked up by the same people who earn fees from Forest City, why shouldn't Jay-Z insist that the Barclays Center serve ridiculously pricey and not very good champagne from which he earns an even more ridiculous profit? Exactly.

A 2/8/12 article in the Wall Street Journal, Jay-Z Determined to Make the Nets Stylish: As the Team Moves to Brooklyn, the Rap Mogul and Part-Owner Is the Czar of Aesthetics; Don't Skimp on the Forks, is essentially a commercial--sans any contribution from the man of honor--about how Hova steers Barclays/Nets styles:

In addition, the Nets are set to begin marketing 11 luxury suites that will be known as "The Vault at Barclays Center," a small, high-end space on the event level of the arena. Yes, Jay-Z chose the forks—in addition to offering his input on the Champagne ($300 bottles of Armand de Brignac), the layout (asymmetrical) and much of the décor (lots of black and shimmering metallics).

Hmm, his input on the Champagne.

About that champagne

In an excerpt from Empire State of Mind: How Jay-Z Went from Street Corner to Corner Office, run (and pulled) from The Atlantic, Zack O’Malley Greenburg wrote about a particular business deal:

So why would Jay-Z get involved with a second-tier cham­pagne? Because of the immense profit potential. Fass estimates that Cattier’s pro­duction cost for each $300 bottle of Armand de Brignac is a mere 10 euros. Assuming Jay-Z is an investor, the connection could be through any number of outlets: Cat­tier itself, the brand Armand de Brignac, the importer, the exporter, or the distributor...

Greenburg, who did get much of the Atlantic Yards story wrong, seems on firmer ground here, since he interviewed several people "close to the matter... when I related everything I’d learned, all of them confirmed that Jay-Z receives millions of dollars per year for his association with Armand de Brignac."

But Jay-Z would rather be seen as a connoisseur than someone paid to promote. And the money could be very good, suggests Greenburg:

The production cost per bottle of Armand de Brignac is about $13; the wholesale price is $225. The maximum output is 60,000 bottles per year. If Jay-Z splits the $212-per-bottle profit evenly with Cattier and Sovereign, a back-of-the-envelope calculation suggests his annual take would be a little over $4 million. One of my sources confirmed that number, and added that Jay-Z may have received equity in Sov­ereign Brands worth about $50 million. All for dropping a few lyrical references and featuring Armand de Brignac in a couple of videos.

article

Related content...

The Wall Street Journal, article

Jay-Z was sitting on the edge of his impossibly large oak desk when he stressed the importance of flatware.

Forks need to be heavy, he told his small audience, which included Chris Sharples, the architect in charge of designing a block of luxury suites at Barclays Center that would bear the rap impresario's imprint. Forks, Jay-Z said, need to have substance. A plastic fork? Please. Even stainless steel was out of the question.

Wait. Was that Jay-Z, or Yoda?

Last spring, when Sharples and his team first met with Jay-Z, they had him watch an animation that revealed some of the details of the building's ongoing construction. Sharples recalled that Jay-Z got up from behind his desk, leaned toward the screen and, when it was over, sat quietly for several moments before he shared his vision for the suites—the ambience, the color, the experience.

How much does Jay love his champagne?

"I think he treats it the way I treat Diet Coke," said a spokeswoman for the winemaker.

Posted by eric at February 9, 2012 10:33 AM