Summer 2008; Words by Valencia Garcia

Live Nation closed it’s massive Jay-Z 360-degree deal on April 30.

The company filed a Form-8K with the SEC which states that the artist is getting 775,434 Live Nation shares, plus an option on an additional 500,000 with the exercise price of $13.73. The shares go to Marcy Media, the company affiliated with Jay-Z (born Shawn Carter), in connection with the formation of Roc Nation LLC, a joint entertainment venture between Live Nation and Jay-Z.

However, in her Weblog, Avenue 1′s Valencia Garcia — with the help of key sources on both sides of the table — offered a look at some of the expected terms:

Term: Ten years.

Albums: With 3 albums at a staggering $10 million advance per effort, one has to think that a disaster is eminent. However, given the rarely mentioned fact that the rapper retains the masters to his previous work excluding his first album, Reasonable Doubt, the proceeding 3 releases can consist of a combination of greatest hits, live albums, compilations, etc. It will not just limit to studio releases of new music.

Investments and Sponsorships: Those cries of ‘$25 million is too much to be given to a 38 year old rapper past his prime’ should dry up over due time. As we have seen over the past few years, Jay-Z has earned acclaim as a rapper and cachet as a mogul. The $25 million investment will return dividends within minutes, much like the time it takes to sell out his concerts.

Talent Consulting: This could prove to be the most trickiest of aspects in the deal. While “The Rolling Stones of Hip-Hop” has been credited with jump-starting the careers of notable acts such as Ne-Yo, Rihanna, and Kanye West, there has been a growing number of disappointments: Freeway, Lupe Fiasco, Tru Life, and more recently, Aztec Escobar.

Touring/Merchandise/Licensing: The meat and potatoes of the deal. The Jay-Z brand, no matter what album sales may scream, continues to dominate the rap music world, much like Michael Jordan’s initial retirement and continuing super-celebrity status in the basketball world via athletic shoes and self-branded apparel.

With CD sales down an estimated 32 percent over the past 8 years (2000), this deal could change the landscape of the recording industry, or could send some of Live Nation’s brass into an emotional and financial tailspin given their inexperience in the world of hip-hop music. In the world of Jay-Z, chalk this up as just another step up the green ladder to becoming the first active billionare rapper.