Jay-Z sold majority stake in Tidal to Square for millions–this is the 'genius thing' he did when starting out in the music business
Shawn "Jay-Z" Carter has had nothing short of a record-setting career as both an artist and an entrepreneur.
In June 2019, Forbes dubbed Carter the first hip-hop artist to become a billionaire – and since then, Carter has made many smart deals.
On Thursday, Jack Dorsey's digital payments company Square announced that it will acquire majority ownership stake in Carter's music streaming service Tidal for an expected $297 million in cash and stock. Carter will join Square's board of directors, and existing artist shareholders will be the remaining stakeholders, Square said.
When reflecting on his career in 2010, Carter recalled one thing in particular that he did early on that set him up for success. In fact, Carter refers to it as a "genius" move.
"In the beginning, we went to every single label and every single label shut their door on us," Carter said at the 2010 Forbes 400 summit, referring to himself and his then-business partners Damon Dash and Kareem Burke.
"The genius thing that we did was we didn't give up. We used that 'what do they know' approach. We didn't give up at that point."
Instead Carter, Dash and Burke, started their own label, called Roc-A-Fella Records, in 1994. Carter released his debut album "Reasonable Doubt" on Roc-A-Fella in 1996. Though sales started slow, the album caught the attention of label executives.
"I think that was the genius thing we did. We started selling our own CDs and built our own buzz," Carter said in 2010. "Then, the record companies came back to us."
Def Jam (a label that has now worked with artists like Justin Bieber and Kanye West) tried to offer Carter a deal at the time, according to The Wall Street Journal. In response, Carter replied, "I own the company I rap for."
"We had a different negotiation, it wasn't the same artist-label relationship," Carter said at the 2010 summit. "Now, we retained ownership in our own company, and it was the best thing for us."
Instead of signing with Def Jam, Carter eventually sold Roc-A-Fella Records to the label.
Def Jam first purchased half of Roc-A-Fella Records in 1997 for $1.5 million, and then bought the remaining half in 2004 for $10 million, according to MTV.
In 2008, Carter founded entertainment agency, Roc Nation, as part of a venture with Live Nation. Roc Nation represents talent in both music and sports, including Rihanna and NBA star Kevin Durant. Carter remains the CEO of Roc Nation today.
Carter has also invested in and launched companies including D'Ussé, a cognac he co-owns with Bacardi, and Armand de Brignac, a champagne. On Feb. 22, Moet Hennessy, the wine and spirits division of LVMH, announced it bought a 50% stake of Armand de Brignac, known as "Ace of Spades," for an undisclosed amount.
As an artist, Carter has collected 14 No. 1 albums and 22 Grammy awards.
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This story has been updated with the Tidal and Armand de Brignac news.