Thursday, February 09, 2012

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

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 d├ęcor (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.
And now bringing it to Brooklyn.

The 99.9%

The Wall Street Journal raised a question about the most luxury of luxury suites:
By creating and marketing such an exclusive space within the arena, does the team run the risk of alienating—pardon the expression—the 99%? Or, in this case, the 99.9%? "I think there is a concern that everyone is being stratified: 'Oh no, you can't go in there,'" said Andy Dolich, a sports-marketing consultant and former chief operating officer of the San Francisco 49ers.
Yes, there will be 2000 $15 seats in Brooklyn (and if the team doesn't improve seats may go for far less on the secondary market, at least after the novelty wears off).

But the big bucks are in the suites.


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