On June 22, a New York judge ruled in favor of Jay Z to stop ex-Roc-a-Fella Records CEO Damon Dash from selling an NFT related to Reasonable Doubt and his 1/3 ownership of the record label. Three days later, on RD’s 25th anniversary, Jay Z and artist Derrick Adams collaborated to auction NFT artwork for the classic album.
Can’t knock the NFT hustle
This case has all the salacious Jay Z – Dame Dash drama hip-hop lives for, but let’s get the facts straight:
-Reasonable Doubt is owned by Roc-a-Fella Records (RAF Inc.)
-Jay, Dame, and Kareem ‘Biggs’ Burke each own one-third. No one stakeholder can sell the whole album or the record label’s assets
– Dame does not want to sell the entire Reasonable Doubt album as an NFT. He wants to sell his one-third ownership share of Roc-a-Fella as NFT
– The lawsuit claims that Dame’s NFT announcement implied that he was the sole owner of Reasonable Doubt’s copyright
– In March 2021, Dame says Jay offered to buy Dame’s ownership share, but Dame turned down the offer because it was lower than he wanted
– Jay Z’s Reasonable Doubt NFT was a sale of Derrick Adams’ artwork. It did not include any music ownership
According to Rolling Stone, the announcement said:
“SuperFarm is proud to announce, in collaboration with Damon Dash, the auction of Damon’s ownership of the copyright to Jay Z’s first album, Reasonable Doubt…The newly minted NFT will provide ownership of the copyright, transferring the rights to all future revenue generated by the album from Damon Dash to the auction winner.”
To be fair, I can see why Roc-a-Fella lawyers pushed back on that language. It doesn’t clarify Dash’s one-third ownership percentage and can easily be interpreted as full ownership. If SuperFarm’s announcement was as clear as the statement Dash gave to Music Business Worldwide, this would have been harder to dispute.
But was Roc-a-Fella’s block of Dame’s NFT related to his refusal to sell it to Jay Z months before? Even if SuperFarm’s announcement was perfectly worded, Roc-a-Fella may still have been less enthused about Dame’s come-up, especially in the hot market for music catalogs.
Why sell as an NFT?
Dame’s decision to publicly auction his share of Roc-a-Fella Records is odd, but I understand the intrigue. Both the NFT and music markets are hot. Dame can merge the trends and productize the releases. But that works best when the seller has a great public image and the earned media can further boost the sale.
He should ditch the NFT and stick to the enterprise sales. Dame can sell to a music investment fund like Hipgnosis, Round Hill Capital, or one of the major record labels.
Some investment funds shy away from hip-hop assets due to sampling and the complexity of ownership. But this is an opportunity to own a 33% stake in Reasonable Doubt, The Blueprint, and The Black Album! Some investments are worth the extra work.