Damon Dash’s one-third stake in Jay-Z’s Roc-A-Fella Records is going up for auction later this month — but a source tells Billboard that the shares might come with some key limitations.
According to federal court filings this week, the United States Marshals Service will auction off Dash’s 33.3% interest in the storied record company to satisfy an $823,000 judgment against him in a lawsuit filed by movie producer Josh Webber over a failed film partnership.
The auction, set for Aug. 29 at a Midtown Manhattan hotel, will have a minimum bid of $1.2 million, and prospective bidders will be required to post a $240,000 deposit for the right to take part in the proceedings.
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The sale will be for Dash’s stake in Roc-A-Fella Inc., an entity whose primary assets are the rights to Jay-Z’s iconic debut album Reasonable Doubt. According to an April article by Rolling Stone, the rest of the catalog of music released by Roc-A-Fella, which dissolved as an operational label in 2013, is owned by other entities and isn’t involved.
The owners of the other two-thirds of Roc-A-Fella — label cofounders Jay-Z (Shawn Carter) and Kareem “Biggs” Burke — have already attempted to stop the auction, including making changes to the company’s bylaws and intervening in the lawsuit. But a federal judge rejected such opposition in February.
The chance to own a valuable piece of rap IP will surely draw bidders, but a source with knowledge of the situation tells Billboard that there are important limitations to what is being auctioned off — namely, that it’s a stake in a company with other members.
“Whomever buys Dame’s stake in Roc-A-Fella will be a minority owner without authority over any decision-making,” the source tells Billboard. “They won’t have the ability to sell the copyright or borrow against the master as all decisions require majority vote.”
The source also cautioned that the clock was ticking on Roc-A-Fella’s rights to Reasonable Doubt: “There’s also an expiration date on the master ownership for the company, which means revenue and the only asset doesn’t have many years left.”
The mention of an “expiration date” is likely a reference to the fact that Jay-Z could potentially use copyright’s so-called termination right to take back control of the rights to the album 35 years after it was released in 1996. That threshold that will be reached in 2031, giving the new owner roughly seven years before the company’s core asset disappears.
The auction will be coordinated by Webber’s attorney, Chris Brown. In a phone interview with Billboard, Brown pushed back on statements about a looming expiration, calling it an effort “to push the auction price down.” He said a buyer would be receiving “substantial revenue” from streaming royalties and other licenses, and that he had already received numerous inquiries from potential bidders, including corporate investors, high-profile individuals and collectors.
But Brown conceded that he and others outside Roc-A-Fella do not have detailed information about what exactly a winning bidder would be purchasing and that it would be nearly impossible for a bidder to do rigorous due diligence on the asset they were buying.
“That’s the tough part, because it’s not as if I have a judgment against Roc-A-Fella Records, so they have no obligation to turn over any documents,” Brown said. “But anyone in this industry can go and see what streaming number’s Jay’s first album is doing.”
Since its 1996 release, Reasonable Doubt has racked up 2.2 million equivalent album units in the U.S., according to Luminate, including 21,500 units so far this year.
Webber won his judgment back in 2022 after suing Dash for copyright infringement and defamation over their failed partnership on producing a film called Dear Frank. But Dash has yet to hand over the money, hence the court-ordered auction.
The filmmaker isn’t the only one seeking the money from Dash’s Roc-A-Fella stake. The New York City Department of Social Services (NYCDSS) will actually have first dibs, according to court documents, since Dash owes a total of $145,096 in unpaid child support to a woman named Rachel Roy for his two daughters and to a woman named Cindy Morales for his son.
Brown is also seeking to collect another $155,000 that Dash owes to him and another client, photographer Monique Bunn, from separate legal actions. But they’ve agreed that NYCDSS and Webber deserve to recoup their debts from Dash first.
If any money from the auction is left over, it will go to Dash himself. His attorney, Natraj Bhushan, tells Billboard that he and his client will be at the Aug 29 event and “expect a robust auction with bids entering the several millions if not higher.”
“Based on feedback I have received from interested parties (and I can’t mention names), this auction will likely bring out many household names in the sports and entertainment industries as well as those interested in a piece of a historically significant company which holds an interest in a timeless debut album,” Bhushan says.
Back in 2021, attorneys for Jay-Z and Roc-A-Fella sued Dash after news broke that he was planning to auction off a stake in Reasonable Doubt as a non-fungible token (NFT). They argued that the company, not Dash himself, owned the rights to the album: “The bottom line is simple: Dash can’t sell what he doesn’t own.” A year later, Dash signed a settlement in which he agreed that he had no right to sell any part of Jay-Z’s album — as an NFT or otherwise.
Last year, attorneys for Jay-Z, Biggs and Roc-A-Fella mounted a concerted effort to stop the court-ordered sale of Dash’s stake in the company. After jumping into Webber’s lawsuit, they told a federal judge that the auction would violate company bylaws, which they had amended in 2021 to prohibit such a sale.
But in February, the judge overseeing the case said the updated Roc-A-Fella bylaws had been enacted without Dash’s input and were unenforceable. Instead, he offered an alternative route for Jay-Z and Biggs that would still “readily address their concern” with the sale: “They can participate in the auction and place the winning bid.”
UPDATE: (Aug. 2 at 11:37 EDT): This story has been updated with a statement from Webber’s attorney, and was previously updated with a statement from Dash’s attorney.
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