Power of Negotiation: Jay Z

September 24, 2010 | Jag Sandher 7

Learning how to negotiate like Jay Z could be a fruitful venture for any entrepreneur.  Recently music mogul Jay-Z was predicted by Forbes to crack the 400 richest people in America. This elite class boasts the likes of Bill Gates, and Warren Buffett.

Jay-Z currently has a reported net worth of $450 million. In order for him to crack the Forbes list of 400 richest Americans; he would need to double this net worth by 2015.

To earn $450 million dollars is amazing, but to be able to double it in five years is even more astonishing. The reason Forbes is making this prediction is Jay-Z is set to take control of the masters to his recordings in 2014, which are predicted to be worth $50 million dollars.

When most recording artists sign on with record labels they give up the rights to their recordings in exchange for an advance payment and a smaller royalty which is usually 10-15% of music sales. Along with this, the artist will enjoy the prestige of working with a major record label, which in turn increases the chances of the artist being successful. The label will keep these rights and profit from every radio play, every digital download, every album sold, or they will sell the rights to a third party who reaps the benefits.

When Jay-Z signed on as president of Def-Jam Records in 2004, he shrewdly negotiated the return of the rights to his masters along with an 8-figure salary. He also negotiated a separate deal with EMI, which held his publishing rights (covers the use of songs on commercials, sampling by other artists and more) to have them returned to him in 2013. Since 2007, Jay-Z has left Def-Jam and recorded more music expanding his music portfolio. This asset is expected to appreciate to over $100 million.

Jay-Z has brilliantly taken control of not only his future asset but also his brand. This is business intelligence at its best, and demonstrates the power of effective negotiation. How can Jay-Z influence your next business deal?

Jag Sandher| Jag@vuefind.com|@jsandher