Shawn Carter, popularly known as Jay-Z, is considered one of the greatest hip-hop artists of all time, having won seventeen Grammy Awards and placed three albums on Rolling Stone’s list of the 500 greatest albums of all time.  He is also a man of tremendous business acumen, with a net worth of almost $500 million, and the owner of the record label Roc Nation, which manages world famous acts such as Shakira, Rihanna, and Timbaland. On April 2, 2013, Jay-Z dropped a bombshell on the athlete representation industry when he announced his intentions to create a subdivision of Roc Nation, Roc Nation Sports, and serve as a sports agent. In that same press release, Jay-Z announced his first client, Robinson Cano, the second baseman of the New York Yankees and an impending free agent at the end of the 2013 season. Having poached Cano from “super-agent” Scott Boras, Roc Nation Sports immediately began circulating contract demands of $300 million for Cano to resign with the Yankees. In a recent interview conducted by Vanity Fair, Jay-Z proclaimed that his business acumen, and his belief in his future as a sports agent, arises from his past “business” experience working as a drug dealer.
This is not Jay-Z’s first foray into the business of professional sports. In 2005, at the behest of team owner Mikhail Prokhorov, he became a minority share owner of the then New Jersey Nets with the expectation that he could earn a tremendous return on his investment. He was given the authority to exert influence on the direction of the team, especially its marketing, beyond his voting share. Under his guidance, the Nets began the move to the Barclay Center in Brooklyn, which Jay-Z also partially owned, and to their branding as the Brooklyn Nets. Jay-Z was also instrumental in creating the new logo used by the Nets upon their relocation. Upon his decision to become a sports agent, however, it became clear that he would need to liquidate his shares in both the Nets and Barclay to be eligible to represent NBA players. The league has a strict policy against individuals serving as both owners and agents, stipulating directly that no individual affiliated with a player representation company can have any ownership stake in an NBA team. Jay-Z would end up selling his stake in the Nets, one-fifteenth of one percent, to Nets head coach Jason Kidd for $500,000, and his stake in Barclay, one-fifth of one percent, for $1.5 million. These sales eliminated the direct potential for conflict of interest the NBA fears would occur should Jay-Z, or anyone, serve as both a part owner and agent within a single league.
Roc Nation has accumulated several other big name clients, in a variety of major sports leagues. In addition to Cano (MLB), Jay-Z counts Kevin Durant (NBA), Skylar Diggins (WNBA), Victor Cruz (NFL), and Geno Smith (NFL) as clients. Although ultimately unfruitful, Jay-Z was also in talks to represent top prospect Seth Jones of the NHL, who was potentially going to be the first African-American first-overall draft pick in NHL history. Jay-Z is now burdened with becoming a certified agent in each sport, after expanding his reach into so many different leagues. For Major League Baseball, as well as for the NBA and WNBA, the process involves a detailed application form, along with a sizeable application fee. While the application requests information regarding the educational attainment of each applicant, there is no requisite degree to become a certified agent. Jay-Z experienced little trouble becoming certified by the MLBPA. Once the NBA was satisfied that Jay-Z had divested himself of his former shares in the Nets, it processed his application, allowing him to become a legitimate NBA agent as well. Immediately after his accreditation, Jay-Z announced the signing of Kevin Durant, on June 24, 2013. While he is a viable agent for Cano, Durant, and Diggins, however, Jay-Z does not meet the standards set forth by the NFL for its agents. Receiving certification from the NFL Players’ Association (“NFLPA”) would allow Jay-Z to actively recruit NFL players, and thus not run afoul of the “Runner Rule” discussed below; however, he would need to pass a certification test issued by the NFLPA. In addition, the NFLPA requires an undergraduate and a postgraduate degree for all its certified agents, which would need to be waived in order for Jay-Z, who lacks both degrees, to successfully become an NFL agent.
However, Jay-Z and Roc Nation Sports nevertheless have NFL clients in Victor Cruz and Geno Smith. The agency gets around this issue by employing a shadow agent, Kim Miale, who despite a lack of significant experience, is NFLPA certified. Jay-Z acts as the face of the agency, while Miale conducts the contract negotiations for Cruz and Smith. This relationship closely parallels how Roc Nation has operated for other sports as well. It has also struck a very lucrative partnership agreement with the Creative Artists Agency (CAA), a powerful industry leader in the field of athlete representation, which provides Jay-Z with access to vast resources, data, and manpower. The partnership raises the question of who truly runs Roc Nation Sports, as it is unheard of for a startup agent to receive such a partnership, where one party has more office locations (CAA with nine) than the other has clients (Roc Nation with five). Indeed, a trend has emerged where players, such as Durant and Cano, would have CAA handle their contract negotiations with the league, while designating Roc Nation as their clients for marketing and branding purposes. Indeed, it was a CAA agent who vocalized the $300 million demand for Cano to the media. Similar to his involvement with the Nets, Jay-Z is the vocal leader and face of the partnership, with much more influence than someone of his standing, either as an extreme minority owner or a startup agent, would typically hold.
This arrangement has drawn its share of attention for Jay-Z and Roc Nation Sports. As a man of influence, and a tremendous sports fan, Jay-Z is at many high profile athletic events, with access to people and places that others would not. For example, during March Madness in 2011, Jay-Z paid a visit to the University of Kentucky’s dressing room following their Elite Eight victory over the University of North Carolina. However, as a part-owner of a team at the time, NBA regulations barred Jay-Z from having contact with amateur players who had not yet been drafted. As a result, following an investigation, the NBA fined Jay-Z $500,000. In his new capacity as a sports agent, there are similar rules regulating interactions with NCAA players. It was reported in July that Jay-Z had been in regular contact with South Carolina defensive end Jadeveon Clowney, under the guise of recruiting Clowney for his marketability. As an amateur athlete, Clowney is not allowed to receive any impermissible benefits from agents, and frequently NCAA member schools have self-imposed regulations preventing players from meeting with agents not previously approved by the school, or without the school’s knowledge.
Additionally, the NFL regulations sanction agents for using, being associated with, employing, or entering into a business relationship with any non-NFLPA certified person for the purposes of recruiting potential clients. Such an individual is defined as a “runner”, and the NFLPA has been investigating Roc Nation Sports for the possibility that Miale, the agency’s NFL agent, may be using Jay-Z as a runner to recruit players. The investigation was spurred by the fact that Geno Smith hired Miale as an agent almost immediately after she was hired by Roc Nation, which made it appear that Smith was really signing following Jay-Z’s recruitment. Because the alleged misconduct in this case was performed by Jay-Z, and the NFLPA has no jurisdiction over him, the potential repercussions implicate Miale instead. Investigations began in late May, and as of this writing there has been no findings released either absolving Miale of responsibility or sanctioning her.
Around November 6, 2013, Jay-Z was under investigation by the MLB Players’ Association for a watch, valued at $33,900, that he gave Cano as a birthday gift. The Players’ Association has a regulation stipulating that “No Player Agent . . . shall provide . . . any money or any other thing of value to any player, . . . the purpose of which is to induce or encourage such player to use or continue to use any person’s or firm’s services as Player Agent.” Exceptions exist for certain gifts given to existing clients, but any such gift worth over $500 has to be disclosed to the union. As the situation is just developing, it is unclear what information the MLBPA expects to find, or what would lead it to rule one way or another, but Jay-Z would face unspecified discipline if his action is found to have been in violation of the rule.
Clearly, athletes are intrigued by the idea of working with a superstar such as Jay-Z, who also has the ability to connect them to further superstars. Jay-Z utilizes his role as an agent to further enhance his involvement within the athlete industry, while simultaneously exploiting his involvement for his music career. Similar to how he rapped about owning the Nets in his hit single with Kanye West, N—- In Paris, he has dropped references to the sports agent business in his latest album, referencing his role in poaching Robinson Cano from Scott Boras, and the talent of an NBA shadow agent working with Roc Nation. With his vast connections, his reputation among athletes, and the increasing fame that he brings to Roc Nation through his lyrics and personal brand, Jay-Z has set himself up to be a definite force in the athlete representation industry for years to come.
Matthew Lee is a current Harvard Law School Student (Class of 2016).
Matthew Lee, Jay-Z’s Entry Into the Sports Agent Ring, Harv. J.Sports & Ent. Online Dig., November 13, 2013, https://harvardjsel.com/2013/11/jay-z/.
 http://www.rollingstone.com/music/lists/500-greatest-albums-of-all-time-20120531/jay-z-reasonable-doubt-20120524; http://www.rollingstone.com/music/lists/500-greatest-albums-of-all-time-20120531/jay-z-the-blueprint-20120524; http://www.rollingstone.com/music/lists/500-greatest-albums-of-all-time-20120531/jay-z-the-black-album-20120524
 See http://rocnation.com/
 Boras is widely considered the most powerful agent in the game of baseball, and his clientele make over $225 million yearly altogether, far exceeding the total for any other agent.
 Interestingly, the NBA does not consider it a conflict of interest for a coach to have an ownership stake in the team he coaches. There exists precedent here in the early 2000s, in the cases of Pat Riley and Phil Jackson.
 He wound end up being drafted fourth overall by the Nashville Predators.
 See supra at note 6