Jay Z's Net Worth is Still Unknown

From Forbes:

“…It’s clear that Jay-Z has accumulated a fortune that conservatively totals $1 billion, making him one of only a handful of entertainers to become a billionaire—and the first hip-hop artist to do so….To calculate his net worth, we looked at the artist’s stakes in companies like Armand de Brignac champagne, applying our customary discount to private firms. (He owns 100% of Armand de Brignac and has partial ownership of the other companies.) Then added up his income, subtracting a healthy amount to account for a superstar lifestyle. We checked our numbers with a roster of outside experts to ensure these estimates were fair and conservative. Turns out, Jay-Z really is a business, man.”

Zack O’Malley Greenburg and the team at Forbes deserve credit for putting these lists together, but there are a few things to keep in mind with all public net worth reporting for high-net-worth individuals.

These numbers can be overstated:

• Data is often self-reported. Public figures have lied to Forbes and other outlets to boost their status, gain publicity, which leads to future business opportunities (e.g. Wilbur Ross, Donald Trump)
• Liabilities aren’t always captured. Forbes applies conservative discounts to estimate, but there’s a tendency to lead with assets and revenue, and look less heavily at liabilities and cost(e.g. In 2016, Kanye West claimed to be $53 million in personal debt. A) Was that verifiable beyond hearsay? B) If so, was that ever accounted for?)

Meanwhile, these numbers can also be understated:

• Some folks don’t report all their assets or financial interests for various reasons (offshore accounts, businesses with moral/ethical conflicts, desire for anonymity)
• Numbers rely heavily on public knowledge. Anyone who’s generated enough wealth to be considered a billionaire likely has business interests the public doesn’t know about.

Jay Z has never hidden his wealth aspiration or goals. On the 2007 track “Roc Boys” he claimed that the Forbes understated his wealth. He's also called himself a billionaire several times throughout his career, including 2017’s 4:44 album. As we saw with Dr. Dre, Forbes doesn’t always follow the self-declarations of wealth.

Here’s a breakdown of how Forbes broke down Jay Z’s wealth and my thoughts on each number.

‍$310 million - Armand de Brignac. It’s a private company, so we’ll never know the full details. In November, Jay rapped that his 100% ownership was worth “half a B,” but Forbes took a conservative estimate based on past sources and estimations.

‍$220 million - cash investments. This is the largest black box. His $2 million Uber investment in 2013 is reported to now be worth $70 million. Also, I’ve seen conflicting reports from TechCrunch, which Forbes referenced. Did Hov invest in Uber in 2011 when the company was worth $60 million? Or in 2013 when it was worth $3.7 billion? I referenced 2011 myself in the Beyonce/Uber update.Regardless, we don’t know if Jay is still a shareholder or if he cashed out after the IPO. Also, we don’t know much about the remaining $150 million in cash investments. If Jay Z put $2 million in Uber, it’s fair to assume that he’s also invested seven-figures in startups that are now defunct. Were those investments also included?

‍$100 million - D’Usse. Similarly, it’s a private company. Forbes reported that D’Usse moves 200,000 cases and grows 80% annually. And Jay Z said he has 50% ownership debt free. Once again, it’s all self-reported.

‍$100 million - Tidal. In 2017, Jay Z sold a third of the company in 2017 to Sprint for a reported $200 million. But what is Tidal valued at today? And what is Jay Z’s ownership share? I highly doubt it’s “67%,” as other musicians have an ownership stake and there are likely other investors. Also, have company losses been accounted for? Tidal has lost tens of millions of dollars each year. And based on its aggressive—yet warranted—growth plan, that’s to be expected. Is this a measure of cumulative revenue and losses? Or is the company’s current valuation?

‍$75 million - Roc Nation. Another private company and a joint venture. Hard to know.

‍$75 million - music catalog. Jay owns his masters, which is huge. But Tidal has been under investigation for inflating streaming numbers. Are we sure that his streaming numbers are legitimate?

‍$70 million - art collection. This is the hardest to measure. Who knows what he actually owns? Also, high-end artwork valuation is unfortunately easy to manipulate.

‍$50 million - real estate. This is likely a conservative estimate since the Forbes article included $121 million worth of properties in the U.S. But who knows how much is owed on those properties, and how much The Carters might own elsewhere. And do we know if these homes are in Jay’s name, Beyonce’s name, or both?

These questions are less about whether is actually a billionaire. It's more about the process itself. Even if Jay Z’s accountant posts a screenshot of Hov’s statements, can we ever know for sure?

But this is also a reminder to myself with Trapital. Last month, I estimated Jay Z's gain from the Uber IPO and predicted his billionaire status. Since I've referenced these net worth numbers before, I will do my best to add the appropriate context from now on.