Damon Dash’s stake in the old Roc-A-Fella Records label will be auctioned off later this month by the US Marshals Service in order to pay off a debt relating to a past legal battle and failed film project.
The label still controls Jay-Z’s debut album ‘Reasonable Doubt’, which means the successful bidder will in essence get a 33% stake in the copyright in that recording. Although sources speaking to Billboard have cautioned that, because its shares in the label being sold, not a slice of the copyright itself, any buyer will be subject to the company’s by-laws, restricting what they can do with the album.
Roc-A-Fella is currently owned by its three co-founders, Dash, Jay-Z - real name Shawn Carter - and Kareem ‘Biggs’ Burke. When the hype around NFTs was peaking in 2021, Dash tried to sell his stake via an NFT drop, but the sale was successfully blocked by Carter and Burke through the courts. Which was just as well for Josh Webber, the movie producer who had a business partnership with Dash for a time, which ultimately fell apart.
Webber successfully sued Dash for copyright infringement and defamation in 2022, being awarded $823,000 in damages. He is still trying to collect that payment, which is why the court allowed the seizing of Dash’s Roc-A-Fella stake to be auctioned off by the Marshals Service.
When Carter and Burke went legal to block Dash’s NFT sale, we learned that ‘Reasonable Doubt’ is Roc-A-Fella’s only asset. The company’s by-laws govern decision making regarding what happens to the record and they mean that whoever buys Dash’s stake won’t be able to do anything with the album without Carter and Burke’s agreement.
Which means the buyer is basically acquiring a share of any revenue generated by the record based on Carter and Burke’s management of the rights.
Billboard’s sources also claim that “there’s an expiration date on the master ownership for the company, which means revenue and the only asset doesn’t have many years left”.
Interested bidders may also be bidding against Carter and Burke. They previously tried to block the auction by arguing the sale wasn’t allowed under those by-laws.
But the court ruled that the by-laws had been revised to that effect without Dash’s approval, meaning they couldn’t be used to stop the auction. Instead, the judge concluded, Carter and Burke could try to take full control of the company through the auction process.
It remains to be seen how much money the sale generates. The first $145,096 of any money received will actually go to pay off unpaid child support that Dash owes before Webber gets his damages. There is then another person owed money by Dash relating to past legal action who is in line for payment after Webber. If there is any money left after all that, it would go to Dash himself.