Can Drake Bring the Jay-Z/Nets Strategy to Toronto?

Drake Raptors

This upcoming NBA season will mark the Toronto Raptors’ 20th anniversary of joining the league, as well as the second year in the Drake era. Aubrey “Drake” Graham, Grammy Award winning singer and rapper, was nine years old during the Raptors inaugural season in 1995-1996. The Canadian entertainer was brought aboard the franchise before the start of the 2013 season to help plan for the future. Now in his sophomore campaign as the team’s Global Ambassador, Drake will oversee the celebration of two decades of professional basketball history in his hometown. He is also leading the way in a rebranding effort which will result in a new logo and uniforms prior to the 2015-2016 Raptors’ season. The spotlight on Toronto will continue to shine at least until the second week of February 2016, when the city will host the NBA All Star Weekend festivities. This is the first time in league history that the event will be played outside of the United States, and the events will surely be scrutinized as the Canadian city tries to regain its basketball prominence. The man headlining the promotional charge, a platinum-selling recording artist with an international presence about as great as they come, is not one known to take failure lightly.

It is not uncommon for an NBA team to have connections with prominent celebrities from their city. Many rappers frequently associate with players on their hometown squads, and are often spotted sitting courtside. Memphis rapper Juicy J has referenced his support of the Grizzlies several times on his albums, while Chicago based entertainers Common and Kanye West likewise voiced their ties with the Bulls on multiple occasions. However, no musician has taken more of an involved role with the organization he grew up cheering for than Brooklyn mega-star Jay-Z. The New York rapper actually owned one-fifteenth of one percent (0.00067 or 0.067%) of the team and their arena, the Barclays Center, before selling off his stake in 2013 to pursue a career as an agent. Although possessing just a fraction of control, Jay-Z nonetheless was the face of Nets ownership for nearly a decade (many casual fans probably could not identify a picture of Mikhail Prokhorov, the Russian multi-billionaire who owns a majority control of the franchise).

In 2005, when it was decided that the team would leave Newark, NJ for Brooklyn, Jay-Z led the charge of getting his home neighborhood prepared for the arrival of New York’s second NBA team. He began by announcing the club would drop New Jersey from its name, instead adopting the name ‘Brooklyn’. The rapper helped create the new black and white logo and uniforms, a stark contrast from the blue and red of the New Jersey days. Behind the scenes, he designed the interiors of the suites and clubs within the stadium, which were considered some of the most exclusive and upscale venues in the city. Brett Yormark, CEO of the Barclays Center and Brooklyn Nets, once said, “I don’t tell Jay-Z to do anything. I mean that. He tells me what to do. Listen, when it comes to our engagement, let’s just say he’s the CEO.”[1] The organization clearly believed that the entertainer tasked with marketing the luxury suites, known as “The Vault” and priced at $550,000 a year on a 3 year contract, knew how to grow the brand of the Nets within his city.

Jay-Z opened the Barclays Center to the public with his own concert last September in the fall of 2013. The musical genius also had the final say over what songs play on the sound system during game days. As his decision making power grew, club executives decided to make the Nets experience synonymous with the Jay-Z experience. Once inside the stadium, guests have access to a 40/40 club (a sports bar themed nightclub which Jay-Z owns) and a Rocawear store, a retailer of his clothing line. All of the advertisements seen by fans are distributed by Translation, a firm half-owned by Jay-Z.[2]

His involvement in the relocation process has made the Nets transition significantly easier and smoother than most franchises’. Professional sports venues are commonly constructed in areas where land is inexpensive to purchase and develop. Consequently, many low income families and local businesses are frequently displaced. The tension caused by the insertion of the arena into those neighborhoods can alienate fans who feel betrayed, as well as lead to protests and unforeseen conflicts. However, Jay-Z played a huge role in assuring local residents that new jobs would be created and Brooklyn would be better off in the long run. This helped to keep complaints and distrust at unusually low levels. Many from the area strongly believed that Jay-Z had their home’s best interests in mind, and they rallied around the man who was raised in a housing project less than two miles from the new stadium. The growing support can be seen by NBA record-level sales in merchandise, especially in a market competing with a second major organization. Within the first two days of the new Nets gear becoming available to purchase (prior to official jerseys being released), sales revenue was 10 times greater than had been historically averaged over a full year when the team was in Newark. The league, which shares merchandise revenue, would love for the Nets to continue to pad the NBA’s apparel sales, naturally leading to an overall increase in net income as well as inflating the value of each franchise.

The strength of the Nets brand is something the league especially values as it continues to grow. These results were seen in no small part due to the intertwinement of Jay-Z’s own hip hop brand with the club’s basketball brand. Billboards could be seen from New Jersey to Manhattan to Brooklyn focusing prominently on the rapper, with the Brooklyn Nets remaining the secondary focus of the advertisements. The complementary relationship allowed each side to build their wealth and prominence (if it is even possible for Jay-Z to become more prominent, he did) through the joint endeavors, something most businesses aspire their owners to be able to bring to the table. Three months before the season began, sponsorship revenue was also double than what it had been the entire previous year.[3] The Nets sold out every game in their inaugural season, in large part to the flashy, high priced free agent signings that resulted from the opportunity of working with Jay-Z. His brand-building campaign, anchored by what he is most known for – rapping – is helping turn the Brooklyn Nets into a globally recognized organization. His hit track “Hello Brooklyn” has become one of the phrases which many associate with the move to the neighborhood and a slogan representing the emergence of New York’s second great team.

Up north, the Toronto Raptors took careful note of the success Brooklyn has enjoyed over the past two years. The Canadian-based basketball team hopes that their own hometown star can take the franchise into the NBA’s upper echelon. Will Drake bring to the Raptors what Jay-Z added to the Nets? Toronto and New York have more in common than one may think. Both are the largest cities and sports markets in their respective countries. Canada is rapidly growing in basketball popularity, with the last two 1st overall draft picks coming from the Toronto area (2013 Cleveland Cavaliers’ selection Anthony Bennett and 2014 Cavaliers’ pick Andrew Wiggins). Several current NBA stars have also spent a significant portion of their career with the Raptors in the past decade, including Vince Carter and Chris Bosh.

However, what separated the Nets from the Raptors were the respective states of the franchises when the hometown celebrities became involved. The New Jersey Nets were a club near the bottom of the league in percentage of league merchandise sales and sponsorship revenue. No key free agents seriously considered bringing their talents to north Jersey thanks to a prolonged losing culture. The team was due for sweeping changes involving their location, arena, and fan base. The Raptors, meanwhile, are a respectable NBA organization who recently re-signed top free agent guard Kyle Lowry to a 4 year, $48 million extension. They also have a 23 point-per-game shooter in DeMar DeRozan under contract for at least two more seasons before his player option kicks in, all at less $10 million per year. A very strong fan base currently exists, as the team averaged over 18,250 fans per game last season (roughly 92% of full capacity), good for top 10 in NBA attendance levels.[4] Since the 2011 campaign, the Raptors have actually trended upward in fan support, moving from 19th to 17th to 13th to 10th in the league attendance ranking.[5] Toronto appears to have a promising future in their present circumstances, something the New Jersey Nets never possessed. The most difficult aspect of the rebuilding process is the jump from “good” to “elite” in the public eye, something the Raptors have not yet been able to figure out.

While the Nets saw an increase in wins from 22 to 49 in their first season in Brooklyn, as well as a jump in attendance from dead last (30th) to 16th in the league, the Raptors do not require such rapid growth[6]. They believe that Drake could be the missing factor which will draw more fans to the games, shine the spotlight brighter on Toronto basketball, attract world-class free agents, and result in a long sought NBA title. To kick off the changes, he is planning to overhaul the uniforms and logo in an attempt to rejuvenate interest in merchandise and boost sales.

The team announced that the entertainer will receive an office next to that of Raptors CEO Tim Leiweke, as well as permission to bring aboard his own staff. [7] One area that Drake needs to address is the Raptor’s branding. Forbes currently estimates the Nets’ brand value at $91 million, while Toronto’s is nearly 50% lower at just $52 million.[8] The Raptors will be rolling out a fresh line of uniforms in the 2015-2016 season, and have already begun alterations by adding a special 20th anniversary patch to their current home jerseys. The new logo, which is still in development, has been discussed to be black and gold, the same colors as that of Drake’s October’s Very Own Sound (OVO) record label. Last January 2014, the Raptors sponsored a promotion in which fans received an OVO black and gold tee shirt.[9] Perhaps uncoincidentally, the Raptors opponent for that game was none other than the Brooklyn Nets. Many fans are seen in the stadium sporting black and gold clothing, including shirts from Drake’s OVO clothing line, so the transition phase seemingly will be smoother than most. They would certainly boost sales for a franchise which has maintained the same uniforms since the 2006 season, including nearly identical home jersey designs and color scheme since 1999.

Could Toronto become the new darling driving league apparel revenue? It is certainly not out of the question. Forbes estimates the Nets’ market has jumped to roughly $300 million, including an increase in total franchise valuation from $357 million prior to their first season in Brooklyn to $780 million before the 2014 basketball season, even as the club finds itself in constant competition with the nearby New York Knicks.[10] The Raptors have a ballooning local market of $157 million and no other competition in Canada. [11] With the current trending growth in Canadian basketball, Toronto has every reason to expect exponential sales increases in the coming year. CEO Tim Leiweke has publicly stated that Toronto is shooting to exceed the predicted $100 million in city-wide revenue that comes with hosting the NBA All Star Weekend.[12] While it is common for a team executive to make such claims, there is real reason to believe that Toronto will shatter the benchmark expectations set of them.

The final step of the plan for the Raptors is attracting elite players to help bring an NBA title back to the city. Drake has connections with several of the league’s most talented athletes. He was seen embracing stars on multiple occasions, such as Dwyane Wade, DeMarcus Cousins, and Kobe Bryant. Drake and LeBron James have partied together in the past, as he was present at the Miami Heat’s most recent championship celebration at a Miami nightclub. Most notably, however, are Drake’s interactions with soon-to-be free agent and NBA MVP Kevin Durant. At a concert in Toronto, the rapper shouted to the crowd, “Before we leave, I just want to show one of my brothers something. You know, my brother Kevin Durant was kind enough to come to the show tonight and watch us. I just want him to see what would happen if he came to play in Toronto. Let him know what would happen.”[13] The audience responded with a standing ovation and a chorus of “KD” chants, which eventually drew the Raptors a $25,000 fine for violating the league’s anti-tampering laws. The lasting effect still remains clear- Drake has the attention of the NBA’s most marquee names. He has major social clout with his star basketball friends. The question remains whether he has the ability to draw their talents to his city and team.

In the end, will Drake be able to help convince ownership to spend millions in salary and luxury tax on the team as the Nets did? Or convince All-Star free agents to sign with Toronto? Nets owner Mikhail Prokhorov notoriously had no reservations about spending enormous sums of money and punting future assets to put together a team that included three time All-Star Deron Williams, seven time All-Star Joe Johnson, 10 time All-Star and former NBA Finals MVP Paul Pierce along with 15 time All-Star and former League MVP Kevin Garnett. Will we see the Toronto Raptors finding themselves in this position within the next few seasons? The steps of the plan are all connected – attracting the league’s premier talent will not only put the team in a better position to compete for a championship; it will also create a new demand for the jerseys and team gear, especially if they are sporting a new logo and color scheme. Together, these changes will hopefully push the Raptors into the spotlight and build up an international brand.

Could Toronto be the next hottest market in the league and the premier landing spot for free agents? With Drake on board, it is certainly a very strong possibility. If the Nets can go from the bottom of the league in attendance and merchandise sales to becoming the league’s shiniest new rebranding effort, then the Raptors can also improve their status playing in Canada’s largest market. Toronto is the third largest city in the NBA, behind New York and Los Angeles, (each of whom hosts two organizations) and the team is in a much stronger position than the New Jersey Nets ever were. Drake is not being asked to make the kind of sweeping changes that Jay-Z was. The leap between where the Raptors are now and where they want to be is a very manageable one. Will Drake be the one that helps them get there? I certainly believe so.

Will Graboyes
Georgetown University Class of 2017

Connect with Will on LinkedIn: https://www.linkedin.com/pub/will-graboyes/80/30a/9a4
Follow Will on Twitter: @WillGraboyes
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Image courtesy of thestar.com

[1] http://online.wsj.com/news/articles/SB10001424052970204136404577211581599161916?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052970204136404577211581599161916.html&fpid=2,7,121,122,201,401,641,1009
[2] http://www.nytimes.com/2012/08/16/nyregion/with-the-nets-jay-z-rewrites-the-celebrity-investors-playbook.html?pagewanted=all&_r=0
[3] http://www.crainsnewyork.com/article/20120805/MEDIA_ENTERTAINMENT/308059985
[4] http://espn.go.com/nba/attendance/_/year/2014
[5] http://espn.go.com/nba/attendance/_/year/2011
[6] http://espn.go.com/nba/attendance/_/year/2013
[7] http://www.bet.com/news/music/2013/09/30/drake-named-global-ambassador-for-toronto-raptors.html
[8] http://www.forbes.com/teams/toronto-raptors/
[9]http://www.thestar.com/sports/raptors/2014/01/10/raptors_rebranding_how_should_nba_team_pick_colours_for_its_newest_look.html
[10] http://www.forbes.com/teams/brooklyn-nets/
[11] http://www.forbes.com/teams/toronto-raptors/
[12] http://sports.nationalpost.com/2013/09/30/toronto-raptors-make-drake-global-ambassador-set-to-host-2016-nba-all-star-game-in-rebranding-effort/
[13] http://espn.go.com/nba/story/_/id/11338909/toronto-raptors-fined-25000-drake-concert-comments

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