Canceled: Jay-Z’s Roc Nation Gets Iconix Lawsuit Dismissed For $15M
By CultureBanx Team
- Roc Nation Apparel Group ends 2-year licensing lawsuit with Iconix Brand
- Some intellectual property rights will be returned to Roc Nation for $15M
After years of fighting, hip hop mogul Jay-Z has settled an ongoing lawsuit between his Roc Nation Apparel business and licensing company Iconix Brand Group (ICON -7.35%). The rapper bought back some intellectual property assets from Iconix for $15 million as part of the settlement, which resolves two lawsuits and an arbitration proceeding.
Why This Matters: Jay-Z famously rapped I’m not a businessman, I’m a business man”, but when culture and business collide, sometimes neither side ends up winning. It appears this is the case, which put hip hop and commerce at odds with one another. Iconix claimed the 2007 licensing agreement in which Roc Nation granted it rights to manufacture and sell specific types of goods bearing the Rocawear name was being infringed upon. Roc Nation Apparel partnered with New Era to release a line of Major League Baseball caps bearing the Roc Nation logo and Iconix stated this fell within the scope of the parties’ original licensing deal.
Iconix wrote down the value of Rocawear by $169 million in March 2016 and another $34 million in 2018
There was a lot of money lost on both sides of this lawsuit. We’ll start with Iconix which acquired Rocawear in 2007 for $204 million, it has since written off almost the entire investment. Specifically, they wrote down the value of Rocawear by $169 million in March 2016 and another $34 million in 2018. Also, Iconix noted it took a $5.5 million charge after agreeing in principle to resolve a U.S. Securities and Exchange Commission probe into its write-downs.
Moving on to Jay-Z — who has an estimated net worth of $1 billion according to Forbes — he didn’t seem to have all his ducks in a row while dealing with Iconix, which is why his company is out of $15 million. It’s unclear which intellectual properties are now owned by his company, but the settlement also included Iconix selling back membership interests in Jay-Z’s Marcy Media Holdings.
Situational Awareness: Shares of Iconix are down 57% year-to-date and the company’s third-quarter revenue fell 23% to $35.5 million, missing analysts’ estimates. Now that “The trademark infringement case is Iconix Brand v. Roc Nation Apparel, 17-cv-3096, U.S. District Court, Southern District of New York” is behind them, perhaps the company can re-focus its efforts on trying to increase sales for its plethora of brands and shareholder value.