Diddy faces financial crisis: Billionaire lifestyle, legal fees

Lydia Moynihan

celebrity

by Lydia Moynihan

Is there a problem with running out of money?

Sean “Diddy” Combs appears to be facing a cash crisis as he racks up significant legal costs and dries up revenue from a lucrative partnership, according to an analysis of Diddy’s finances by The Post.

Diddy, 54, continues to struggle with the high-priced lifestyle of a big-time rap star amid a series of civil lawsuits and an FBI raid on his home in a sex-trafficking investigation (which he called a “witch hunt”). continues.

He was boarding a private jet in Miami when SWAT teams stormed his homes in Miami and Beverly Hills last month, but his Gulfstream was last seen in Antigua.

The Post’s analysis conservatively estimates Diddy’s total annual bill at $35 million a year, excluding the impact of his secret settlement with Kathy.His representative declined to comment.

Then, in 2023, a lucrative deal with drinks giant Diageo for the vodka and tequila brands that were the core of his income hit a snag.

His family is also likely to increase the financial burden for him. Diddy is the father of seven children, four of whom are under the age of 18, and although he currently has no long-term partner, he is thought to pay child support for several ex-girlfriends.

And in another financial threat, his son Christian “King” Combs was sued Thursday in Los Angeles by a woman who alleges he sexually assaulted her in 2022 when she was 24 years old. He denies the “obscene and worthless” allegations.

failed liquor trade

Diddy’s single biggest source of wealth for nearly 20 years was his partnership with drinks giant Diageo.

First, it became a 50-50 partner in the Cîroc vodka brand from 2007, and then from 2013 it brought in cash through the joint purchase of DeLeón tequila.

As part of the 2007 deal, Diageo gave him 50% of Ciroc’s profits and also gave him a marketing budget to promote alcohol, amounting to $15 million a year, according to Bloomberg. spent the budget on lavish parties on yachts, at home and all over the country.

In May 2023, Diddy sued the UK-based liquor giant, alleging that he was treated as a second-class partner to prominent liquor distributors like George Clooney because of his race, sparking a bitter dispute. Ta. $1 billion had been paid out since 2007.

He asked the Rev. Al Sharpton to portray his fight as one that would help the black community as a whole. “It’s like a slave master beating his slave,” Rev. Sharpton said of Diageo’s relationship with Combs. .

But Diageo has clearly had some legal momentum since last November when it was hit with a series of lawsuits alleging it assaulted, raped and trafficked women.

Among the lawsuit’s claims were allegations that women were assaulted at private parties funded by Diageo, where they were presented with “gift bags” containing sex toys, body chocolates and strippers.

Diddy dropped the lawsuit in January, implying that the beverage company had taken full control of the brand and had essentially won a complete legal victory, leaving her without future income.

While the marketing budget funds Diddy’s social life, the revenue stream from Ciroc “kept all his other companies afloat,” Bloomberg reported.

collapsed media empire

Among the other companies that have garnered the most attention in recent years is Revolt TV, a cable channel founded in 2013 by Diddy and other undisclosed investors.

Cable channels can make money if managed well, because managers take a portion of people’s cable bills, called “cable car fees,” which is stable, predictable income, and then sell advertising on top of that. It could be a box.

In 2013, Forbes reported that his stake was over 50% and suggested he could earn as much as $12.5 million a year from Revolt. Then the website was born.

But in November, Diddy resigned as chairman after his ex, Cathy, accused him of rape and sex trafficking.

Last month, TMZ reported that he sold his Revolt stock to an unnamed buyer for an undisclosed amount.

Rivolt’s downfall was not his only media disaster. Around the same time that he was indicted, a reality show about Diddy’s life that was to be produced for Hulu was canceled.

The company also quickly cut ties with his Black Business Empower Global marketplace.

But perhaps the more painful personal blow for Diddy now is that Bad Boy Records, which underpinned his rise throughout the 1990s with hits for both him and his Top Rank artists, most famously Notorious B.I.G., has been overshadowed. It’s probably hidden.

Diddy sold a 50% stake to Warner Bros. Music for an undisclosed sum in 2005 (a 2001 valuation suggested it was worth $100 million), but in recent years he has been involved in Failing to secure contracts or maintain them. Aside from Diddy, whose last release was a huge flop, the biggest artist is Machine Gun Kelly.

of failed clothing line

Diddy was trying to revive Sean John, a once successful clothing brand he sold for $70 million in 2016, but bought out of bankruptcy for just $7.5 million in 2021.

Although the company’s website proclaims it has “bringing the name back,” Diddy has yet to introduce new collections or post existing clothes on the Sean John website or Instagram. These clothes are still available for purchase on Amazon, Walmart, and List, but Macy’s has stopped selling them.

Sean John, like Diddy’s other businesses, are all private, allowing him to hide his financial status. Similarly, the LLC’s complex network makes it difficult to keep track of his assets. But his remarkable lifestyle and accompanying bills are much easier to put a price on.

A-List Money Pit

Diddy’s Gulfstream 550, a jet that can fly more than 6,500 miles than the distance between Los Angeles and London without refueling, will cost $60 million up front, followed by maintenance costs, according to jet research firm Conklin de Dekker. It will cost an additional $3.5 million each year.

It has long been widely reported that Diddy owns his own yacht, but he appears to charter it frequently.

Chartering the yachts he hosts as a host can cost up to $300,000 a week, suggesting his annual yacht expenses exceed $1 million.

People who work with luxury homeowners say Ms. Diddy’s two homes, a $35 million Miami waterfront mansion and a $40 million Los Angeles mansion with an underwater tunnel, have been taxed, Repairs and labor costs could cost an additional $5 million.

Diddy also has two large mortgages totaling nearly $100 million that expire in 2029 and 2036, respectively, and cost him nearly $8.5 million annually.

In 2018, Diddy paid $21.1 million for a painting of a Chicago park scene titled “Past Times” by Kerry James Marshall. The painting was the most expensive painting ever sold by a living black artist.

Diddy also has hundreds of other items, including a $300,000 Richard Mille watch, a 30-carat diamond pinky ring (which could be worth millions, according to jewelers), and a $500,000 diamond chain necklace. He also owns a million dollar jewelry collection.

family he supports

It’s unclear how much Diddy spends in total on child support, but according to a 2005 court filing, Diddy only pays $21,782 per month in child support for one of his seven children. I was ordered to do so. For the year he will make $261,420.

If he paid that amount without adjusting for inflation, the children alone could add an additional $1.8 million. It’s unclear if Diddy still supports all of his children, one of whom is 32, but reports suggest he supports several girlfriends.

Biggest new bill: lawyers

Mark Geragos, who has previously represented Diddy as well as Usher, Chris Brown, Michael Jackson and Nicole Richie, said Diddy’s current legal fees are “seven-figure sums” per year. I estimate it to be equivalent.

“Typically, cases like this are handled on an hourly basis, but Diddy has always used top-notch legal teams that can cost up to $1,750 per hour.”

What’s more, he settled with Cathy for an undisclosed amount and now faces a federal investigation that would result in a surge in legal claims and an expensive defense if charges were brought.

But does he have a secret stash?

Of course, given that Diddy has made millions of dollars since the 1990s, it’s very possible that he’s been able to put so much cash into investments that he can live off of them and have a war chest for legal fees. his former lawyer claims.

Geragos said he had no inside knowledge of Diddy’s finances, but added: “He’s been in tough situations before and usually bounces back…He’s very smart and insightful. “There is,” he points out.