Since investing within the Chicago Sky in 2006, singer Michelle Williams of Future’s Little one fame has sung the nationwide anthem at a number of video games, joined a Sky star in a photo-op with native highschool gamers, frolicked with followers at a meet-and-greet — and, in fact, loved the most effective seats in the home.
Along with her minority stake within the 2021 WNBA champion group, Williams belongs to an unique group of pop stars who personal a slice of agroup, together with Usher, J. Cole, Pitbull, Fergie, Marc Anthony and Justin Timberlake. And with the Sky lately valued at $85 million, her funding is paying off in a number of methods.
“It checks a number of the bins — [she] is from the town, a fan of the game, a lady, a member of an iconic group,” says Jonathan Azu, founder and CEO of Tradition Collective, which manages Williams. “It has the hallmarks of why you’d do one thing like that: ‘I’m related to this group, so it brings a number of worth to my model.’ ”
For an artist, that type of worth is each figurative and literal. Whether or not it’s Usher shopping for a small stake within the NBA’s Cleveland Cavaliers, Anthony and Fergie changing into minority house owners of the NFL’s Miami Dolphins, Cole shopping for into the NBA’s Charlotte Hornets or Pitbull changing into co-owner of NASCAR’s Trackhouse Racing Workforce, cash is a main motivator.
“The inventory market can go down, however the worth of, say, the Texas Rangers shouldn’t be going to go down,” says Michael Rapkoch, founder and CEO of Dallas-based Sports activities Worth Consulting. Usher’s $9 million Cavs funding, as an illustration, could have greater than quadrupled in worth since he first made it in 2005, based on Forbes estimates. “I’m very completely satisfied to say that I don’t simply have a basketball group, I’ve a championship group,” Usher tells Billboard, noting the Cavs gained in 2016 below his watch. “That legacy is related to one thing that I made an funding in.”
Maybe the best-known artist-turned-team proprietor is Jay-Z, who spent $1 million on a small stake within the NBA’s Nets in 2004, helped transfer the franchise from New Jersey to his native Brooklyn, then divested from the group in 2013 to keep away from a battle of curiosity together with his Roc Nation Sports activities company. His windfall from that deal, based on Forbes, was an estimated $1.4 million.
Investing in a group also can imply straightforward self-marketing. When Timberlake, whose investing group owns a reported 2.8% of his hometown NBA group, the Memphis Grizzlies, performed digicam operator at dwelling video games, Sports activities Illustrated lined the story. “Sports activities is leisure. There may be crossover at each degree,” Mark Cuban, who lately bought his majority stake within the NBA’s Dallas Mavericks for a reported $3.5 billion, tells Billboard.
That mentioned, even a minority stake might be dangerous — “no totally different than any enterprise,” as Cuban says. “If it’s not properly run [and] clients aren’t completely satisfied, you possibly can lose some huge cash.” That’s why none of longtime Bay Space music enterprise supervisor Tim Jorstad’s shoppers have ever purchased stakes in groups, although lots of his shoppers, which embody the Doobie Brothers, Jefferson Airplane and members of Journey and the Grateful Lifeless, are regional sports activities followers.
Nonetheless, the perks are likely to outweigh the potential draw back for artists craving a chunk of the sports activities pie. “It’s a enjoyable funding. [Artist-owners] go to a number of video games and get to take a seat within the house owners’ field and go onto the sector and schmooze,” Jorstad says. “There are only a few different regular investments the place you get that type of public publicity.”
Extra reporting by Gail Mitchell.