Your Favorite Rapper is Poor: The Corporate Cash Edition

If readers have learned anything from Refined Hype’s mini-series “Your Favorite Rapper Is Poor” it’s that the rap game is not a get-rich-quick scheme. It’s more like a debt-piling, get-homeless-quick scheme. The truth is, money is hard to come by in the music biz, especially if you keep your career confined to the studio. The key to making serious money lies in well-chosen business ventures. Sponsorship is the topic today and, oh boy, is it part of the game – about just as much as rapping is.

First off, money from sponsorships isn’t divvied up like money from music sales is. (For those of you who haven’t read the previous articles in this series, take a look at the "One Hit Wonder Edition" for a nutshell understanding of how artists make money off their recordings). The money you make from sales is always a fraction of the total income; the producer wants some, the distributor wants some, and the label wants most. But if you’re like 50, you already have money coming in by the garbage bag from sponsorships. Consider his story with Vitamin Water:

In 2004, 50 Cent’s manager Chris Lighty had an idea. His business acquaintance Rohan Oza, then-marketing executive of Glaceau Energy Brands, was looking to push his new product Vitamin Water to the national scale. Lighty recommended that 50 lead the movement (50’s deal with Reebok was proving extremely lucrative). The same year, after some serious convincing on Oza’s part, Fiddy inked a deal with Glaceau. He agreed to endorse the product and take a 10% share of the company that would increase over time. In return, over the next three years, 50 hyped Vitamin Water, appearing on ads across the country and snatching every bit of attention that Oza could ever imagine (Who didn’t love that commercial with 50 conducting a symphony to “In Da Club”?). The deal was working on both ends and soon the quirky drink became a household name. Then in 2007, Coca Cola bought Glaceau for $4.1 billion. 50 ended up cashing out at somewhere between $60 and $100 million, rocketing his net worth to almost a half-billion dollars.



Guess how much of that $60-ish million 50 kept? Every cent. Nobody – label, producers, songwriters or distributors – could touch that money. This is why sponsorships are huge for artists. It gives them another income to enjoy aside from the shavings they get from their label. 50 doesn’t need to rely on percentages of sales and tour money anymore to make a profit, he just pocketed more money than he will ever make off of an album, no matter how big.

Now that being said, every emcee doesn’t have the same opportunities as 50. Before meeting the Queens rapper and finding him to be articulate and well-mannered, the high-ups at Glaceau were reluctant to work with someone who prides himself on being shot nine times. His image had to be appropriate for large-scale advertising campaigns. Think about some of the rap endorsements you’ve seen (Dr. Dre, Diddy, Drake, etc.). Have you ever seen an interview with Jay-Z? He’s intelligent, down-to-earth, likeable. Let’s be real, there are some rappers out there that might scare your children if they were ever featured in a commercial ad. And in these kinds of partnerships, the rapper becomes the face of the brand their pushing. As soon as southern emcee T.I. got into legal trouble last October, men’s grooming product company Axe ousted him from their promotional campaign. Other celebs who fell from grace including Tiger Woods (Gilette), Chris Brown (Wrigley Company) and Kobe Bryant (McDonald’s) share similar stories.

But before all the rappers’ hearts break, let’s not forget that it was rhyming that got 50 in the position to make moves he did. 50 Cent would just be Curtis if he didn’t have skills. But those skills can only take you so far. The financial smarts like those of 50 and Chris Lighty can launch an artist’s career from the ground level of say Fabolous to the stratosphere of Diddy and Jay-Z. (Note how the discrepancy between bank accounts isn’t necessarily proportional to that of talent). These guys let their careers grow out of the studio and into the world of business, giving them opportunities that “just rappers” could only dream of. Moves like these transform a musician to a mogul.