The perks — and the pay — for artist group owners

Since investing in the Chicago Sky in 2006, singer Michelle Williams of Destiny's Child fame has sung the national anthem at multiple games, joined a Sky star in a photo shoot with local high school players, hung out with fans at a meet-and-greet salute — and, of course, enjoyed the best seats in the house.

With her minority stake in the 2021 WNBA champion team, Williams joins an exclusive group of pop stars who own part of a sports team, including Usher, J. Cole, Pitbull, Fergie, Marc Anthony and Justin Timberlake. And with Sky recently valued at $85 million, her investment is paying off in more ways than one.

“It checks a lot of the boxes — [she] she's from the city, she's a sports fan, she's a woman, she's part of an iconic team,” says Jonathan Azu, founder and CEO of Culture Collective, which runs Williams. “It has the characteristics of why you would do something like this: 'I'm associated with this team, so it brings a lot of value to my brand.' ”

For an artist, this kind of value is both figurative and literal. Whether it's Usher buying a small stake in the NBA's Cleveland Cavaliers, Anthony and Fergie becoming minority owners of the NFL's Miami Dolphins, Cole buying the NBA's Charlotte Hornets, or Pitbull becoming a co-owner of NASCAR's Trackhouse Racing Team, the money is a key motivator.

“The stock market may go down, but the value of, say, the Texas Rangers is not going to go down,” says Michael Rapkoch, founder and CEO of Dallas-based Sports Value Consulting. Usher's $9 million investment in the Cavs, for example, may have more than quadrupled in value since he first made it in 2005, according to Forbes calculates. “I'm very happy to say that I don't just have a basketball team, I have a championship team,” Usher says Advertising sign, noting that the Cavs won in 2016 under his watch. “This legacy is tied to something I invested in.”

Perhaps the most famous artist turned team owner is Jay-Z, who spent $1 million on a small stake in the NBA's Nets in 2004, helped move the franchise from New Jersey to his native Brooklyn, and then left the team in 2013 to avoid a conflict of interest with Roc Nation Sports agency. His windfall from this deal, according to Forbesit was estimated to be $1.4 million.

Investing in a team can also mean easy self-marketing. When Timberlake, whose investment group owns 2.8 percent of his hometown NBA team, the Memphis Grizzlies, played camera operator at home games, Sports Illustrated covered the story. “Sports is entertainment. There's crossover at every level,” says Mark Cuban, who recently sold his majority stake in the NBA's Dallas Mavericks for $3.5 billion. Advertising sign.

That said, even a minority stake can be risky — “no different than any business,” as Cuban puts it. “If it's not working well [and] Customers are not happy, you can lose a lot of money.” That's why none of longtime Bay Area music executive Tim Jorstad's clients have ever bought stakes in groups, even though many of his clients, including the Doobie Brothers, Jefferson Airplane and members of Journey and the Grateful Dead, are local sports fans.

However, the perks tend to outweigh the potential downside for artists who crave a piece of the sports pie. “It's a fun investment. [Artist-owners] go to a lot of games and sit in the owners' box and go out on the field and screw up,” Jorstad says. “There are very few other regular investments where you have this kind of public exposure.”

Additional reporting by Gail Mitchell.

This story will appear in the February 10, 2024 issue Advertising sign.