UPDATED: Malibu Entertainment, a company connected to Jay-Z’s Tidal streaming service, was among the businesses applying for and accepting Paycheck Protection Program loans for between $2 million and $5 million, according to documents released by the Small Business Administration and Treasury Department; a source close to the situation tells Variety the loan was for $2.1 million. The loans are part of the federal government’s $2 trillion CARES act to assist small businesses impacted by the coronavirus.
The loan was approved on April 7, shortly after Tidal and Roc Nation, Jay-Z’s entertainment joint venture with Live Nation that shares addresses and apparently some other functions with the streaming service, laid off, furloughed or cut salaries 10%-20% across as much as half the company, as reported by Variety. A source tells Variety that 15 furloughed Tidal employees were laid off last week.
Contacted by Variety, a rep for Tidal had no comment.
While Malibu is technically a separate company — a Black-owned motion picture and video production business based in New York with 95 jobs supported, according to the SBA document — it is part of the Tidal infrastructure. It shares the two most recent addresses with both companies; a 2017 lawsuit alleged that Roc Nation, Tidal, Malibu Entertainment and Tidal parent Aspiro are essentially the same company (although the lawsuit was dismissed without a clear ruling on the matter); in 2017 Malibu submitted for H1B visas for graphic designers providing as a contact for Joseph Borrino, CFO of Roc Nation at the time, who used a Tidal.com email address; and several Tidal employees tell Variety that their paychecks come from Malibu Entertainment.
Jay-Z is hardly the only billionaire whose company took out a PPP loan. Yeezy, the apparel company owned by fellow billionaire Kanye West, also took a $2 million-$5 million loan, according to the documents, and there are many others outside the music world. Top touring acts the Eagles, Pearl Jam and Disturbed took loans between $350,000 and $1 million; for the touring acts, the financial support is intended to crews and other support staff for current and future tours. Messina Touring Group, which has promoted tours by Taylor Swift, Ed Sheeran, Kenny Chesney and George Strait, was also among the recipients, as were many independent labels and touring artists taking smaller loans.
A source told Variety that Tidal and Roc Nation made the March layoffs and furloughs quickly as the crushing impact of the coronavirus brought two of Roc’s primary financial pillars — music touring and sports — to a virtual standstill. Founded in 2008, Roc Nation is a multifaceted management-label-publishing company established as a partnership between Jay-Z and Live Nation, while Aspiro is the Norwegian parent company of Tidal that Jay purchased in 2015, when the streaming service was called WiMP.
Additional reporting by Gene Maddaus.
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