Trapital - the house of combs
the house of combs Hey! Big news for Dr. Dre. He’s reportedly selling his music income streams and some assets in an estimated $200 million deal with Shamrock and Universal. These assets generate around $10 million annually, so a 20x multiple is legit given rising interest rates. The last few years of Dr. Dre headlines have been quite the roller coaster of highs and lows: a messy and costly divorce, a brain aneurysm that he nearly died from, and an epic Super Bowl Halftime Show performance, and now this asset sale. All of those events impact how someone looks at their money, how they want it used when they’re gone, and when’s the best moment to make a move. Today’s memo is about another hip-hop artist’s business, Diddy. On this week’s podcast we took a trip to the House of Combs to catch up with my guy, Tarik Brooks, who is president of Combs Enterprises. We talked about Diddy’s latest ventures in cannabis, synergies across the CE brands, celebrity investors, and more. Let’s dive in.
Was this forwarded to you? can Diddy’s Ciroc playbook work with tequila and cannabis? The majority of Diddy’s wealth stems from his 50-50 partnership with Diageo for Ciroc vodka. At its peak, Ciroc has sold 2 million cases per year. But Diddy also has major stakes in DeLeon tequila and the newly-acquired cannabis assets from Creso Labs and Columbia Care. How much of that Ciroc playbook can be replicated with tequila and cannabis? Tarik says DeLeon is the fastest-growing tequila in the United States. Tequila is a less mature liquor than vodka, but U.S. tequila sales may soon outpace vodka as the #1 spirits category. Tequila has different drinking occasions, which shifts the marketing and messaging. Ciroc ads were known for those modern day rat pack trips to Las Vegas, DeLeon’s ads have taken a more romantic vibe. Cannabis is a more complex industry. Many Black business leaders want in to help reset the narrative. Historically, the criminalization of weed affects Black people disproportionately, but the legalization of weed has benefitted white business owners the most. Several Black celebrities have struggled to build sustainable businesses in an industry that is highly regulated and known for grassroots movements. Drake’s cannabis line More Life is no more, Jay Z’s partnership with The Parent Company has just restructured to save costs, and several others have come and gone. Berner’s Cookies business is one of the few successful cannabis companies led by a hip-hop artist. But Tarik doesn’t see Diddy as another celebrity investor in the space: “One of the biggest misnomers, when people think about Sean Combs entering cannabis, is thinking this as a celebrity cannabis deal…we think about a guy with an amazing track record of building culturally-relevant brands. Does he have the resources and platforms to raise the capital to a deal like this? Check. Does he have the ability to attract the talent you need? Check.” It will be interesting to see how Cresco Labs and Columbia Care fit in with the culture of REVOLT,Sean John, and other Combs Enterprises companies. audience insights from diehard customers at REVOLT SummitEach year, the REVOLT Summit in Atlanta brings the media company’s community together for an annual celebration of Black culture. It generates ticket revenue, sponsorships, and audience insights. Tarik says that the summit is a testing ground for new concepts and ideas for all the consumer brands in the portfolio, which makes sense. If we created a sales funnel for CE, the REVOLT Summit would be at the bottom section for the die-hard fans. The Summit is a high-priced event that attracts the fans most likely to support and promote your products for them. The right product can turn an audience like this into an informal street team where they tell their friends, who tell their friends, and so on. On the flip side, if the REVOLT Summit audience doesn’t enjoy a new product or idea, it’s safe to assume that others wouldn’t either. Bad Boy for lifeDiddy is sitting on one of hip-hop’s most-prized music catalogs, Bad Boy Records. He has gotten several offers during the catalog sales boom, but Tarik says they have turned them all down. “People have continually come through with offers and opportunities, and we’ve purposely taken our time as we’ve thought about what Puff’s experience is going to be over the next 10 years as he climbs his second mountain.” There are a few reasons why Diddy hasn’t sold. First, the CE portfolio gives the catalog an ecosystem to keep the assets relevant. For example, classic Biggie tracks can be leveraged in a spirit promotion or in REVOLT content. The music creates a halo effect across Diddy’s businesses. Second, Puff isn’t pressed for money in the way that a legacy artist may be. His business makes money. He’s afforded the time to experiment with the catalog and see if new monetization opportunities arise. And lastly, Diddy is getting back to music. Last year he launched Love Records under Motown. He just dropped a new single with PARTYNEXTDOOR to promote his upcoming album in early 2023. He would rather reap the rewards from the Bad Boy Records assets himself for the foreseeable future. In this episode we covered a bunch of other topics:
Listen to our full conversation here:
Hope you enjoyed this memo. If so, please share. Forward this email to someone who should read it. Text it to a friend. Drop the link in the group chat. Share on Twitter, LinkedIn, or Facebook. Or copy and paste the link below. https://trapital.co/2023/01/13/why-diddy-wont-sell-bad-boy-records/ money moves
enjoy Trapital? share it with a friend Tell them to sign up. I'll send them next Monday's memo. Hit the link below to share:
Or share Trapital quick via text, email, or Twitter. coming soon from Trapital Podcast: Streaming Insights and Trends from Ari Herstand. Ari and I talked about some new findings coming up in his new book, How To Make It in the New Music Business, 3rd edition. Comes out next Thursday! want your company featured in Trapital? We are looking for a few more sponsors in Q1 and Q2 who want to reach the artists, creators, and execs who read and listen to Trapital on a regular basis. Want to see how your brand can reach Trapital's audience? Reach out to us here.
|
Key phrases
Older messages
the decision to sell
Friday, January 20, 2023
Trapital Memo: why selling a music catalog is a complex decision
strength in algorithms
Friday, January 20, 2023
Trapital Memo: why algorithms keep getting better, Flo Rida's $82.6M come up, Ari's Take, and more
staying power
Tuesday, January 10, 2023
Trapital Memo: SZA, SOS, and how artists create staying power and market pull
year-end reflection
Monday, December 19, 2022
Trapital Memo: a brief review on Trapital's 2022 and what's planned for next year
what’s next for AI
Friday, December 16, 2022
Trapital Memo: GPT-3 in music, future of NFTs, catalog sales, and more in the Trapital Mailbag edition
You Might Also Like
Skadoosh!: 'Kung Fu Panda 4' Crosses $500M WW; 'Challengers' Widens Offshore Net; 'The Fall Guy' Starts Overseas Action - International Box Office
Sunday, April 28, 2024
View on web New reader? Subscribe April 28, 2024 Skadoosh!: 'Kung Fu Panda 4' Crosses $500M WW; 'Challengers' Widens Offshore Net; 'The Fall Guy' Starts Overseas Action -
‘Nowhere Special’ Director Uberto Pasolini On James Norton's Star Turn In Father-Son Drama - Specialty Box Office
Sunday, April 28, 2024
View on web New reader? Subscribe April 28, 2024 'Nowhere Special' Director Uberto Pasolini On James Norton's Star Turn In Father-Son Drama - Specialty Box Office By Jill Goldsmith This
The Amy Winehouse Business Is Booming
Saturday, April 27, 2024
View on web New reader? Subscribe April 25, 2024 The Amy Winehouse Business Is Booming Thirteen years after the retro-soul singer's death, tribute bands, album reissues, and a new biopic are
Russian Mercenaries Hunt African Warlord U.S. Couldn't Catch
Saturday, April 27, 2024
View on web New reader? Subscribe April 27, 2024 Russian Mercenaries Hunt the African Warlord America Couldn't Catch Wagner's hunt for Joseph Kony shows the Kremlin's reach is expanding
Zendaya-Palooza Box Office Weekend Pushes 'Dune: Part Two' To $700M WW; 'Godzilla x Kong' To Half Billion As Legendary Warner Pics Count $1.2B WW
Saturday, April 27, 2024
View on web New reader? Subscribe April 27, 2024 Zendaya-Palooza Box Office Weekend Pushes 'Dune: Part Two' To $700M WW; 'Godzilla x Kong' To Half Billion As Legendary Warner Pics Count
Zendaya and Luca Guadagnino's 'Challengers' Looks To Win Weekend Box Office Match With $15M+ Opening - Saturday AM Update
Saturday, April 27, 2024
View on web New reader? Subscribe April 27, 2024 Zendaya & Luca Guadagnino's 'Challengers' Looks To Win Weekend Box Office Match With $15M+ Opening - Saturday AM Update By Anthony D
'Kraven The Hunter' Heads To December, 'Karate Kid' To Chop Next Summer: Sony Release Date Changes
Saturday, April 27, 2024
View on web New reader? Subscribe April 26, 2024 'Kraven The Hunter' Heads To December, 'Karate Kid' To Chop Next Summer: Sony Release Date Changes By Anthony D'Alessandro This
What's Next for Harvey Weinstein?
Friday, April 26, 2024
View on web New reader? Subscribe April 26, 2024 What's Next for Harvey Weinstein After His New York Rape Conviction Was Overturned? Questions mount over whether Weinstein will face a retrial in
Zendaya and Luca Guadagnino Movie 'Challengers' Topspinning To $15M Opening - Box Office
Friday, April 26, 2024
View on web New reader? Subscribe April 26, 2024 Zendaya & Luca Guadagnino Movie 'Challengers' Topspinning To $15M Opening - Box Office By Anthony D'Alessandro This email was sent to
'Beyond Paradise' Renewed For Season 3 Plus Christmas Special By BBC and BritBox
Friday, April 26, 2024
View on web New reader? Subscribe April 26, 2024 'Beyond Paradise' Renewed For Season 3 Plus Christmas Special By BBC & BritBox By Max Goldbart This email was sent to newsletterest1@gmail.