Social media and the mainstream press have been buzzing recently about rapper 50 Cent and his Chapter 11 bankruptcy filing.
If you’ve read any of the news coverage, or followed the stream of mostly snarky comments on Twitter or Facebook, you might be inclined to believe any of the following three myths that have emerged lately about the entertainer:
- 50 Cent is flat broke and has spent his millions;
- 50 Cent is actually just fine financially; he’s simply using bankruptcy as a smart business move; and
- 50 Cent sought bankruptcy protection due to a recent $5 million judgment against him after he posted a sex tape of a woman without her permission
If you believe any or all of these claims, I’ve got a bridge in Brooklyn I’d like to sell you.
As I’ll explain in a moment, each of these assertions about 50 Cent are just dead wrong on so many levels.
But the fact that these myths and misconceptions are so widely believed reveals an awful lot: Not so much about the rapper – who is so far taking his situation in stride and with humor — but more about the American public, and how we devour all manner of celebrity speculation, gossip, rumor and innuendo, and then accept this tidal wave of pure hearsay and supposition as if it were the gospel truth.
Speaking of the truth, here are 3 facts about 50 Cent that no one has told you.
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He Doesn’t Make Anywhere Near the Money You Think
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His Bankruptcy is A Personal Matter, Not A Business Issue
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Tax Problems are Likely a Big Factor in His Bankruptcy Filing
Let’s take a closer look at each of these truths – as well as the myths that you’ve been led to believe about the “Candy Shop” singer.
50 Cent Isn’t Dead Broke – But Don’t Believe the Hype About His Income
50 Cent is not, I repeat, is not dead broke – at least not on paper, not in terms of his assets or income, and not by any popular definition of the word broke. Still, whatever you previously believed he earned is probably vastly off the mark.
When you hear someone say, “I’m broke,” you know what they mean: they’re talking about not having any money, about feeling cash strapped, or about lacking the funds to do something they want or need to do.
Life is going on for 50 Cent and he’s not out of money in the traditional sense of being broke. Last I heard, he’s eating well, he’s got a new movie and another album dropping soon, and he has a pretty nice roof over his head. Not to mention, he has more income and assets than most Americans.
Frankly, none of us currently know the specifics of 50 Cent’s finances. But to assert that he’s “broke” is clearly off the mark.
As of now, here’s what we do know: In his bankruptcy petition, 50 Cent listed his assets as being somewhere between $10 million and $50 million. Having at least $10 million in assets definitely isn’t broke by my definition.
But next comes the tricky part. How much does 50 Cent owe? The artist’s debts also were listed as between $10 million and $50 million, according to his bankruptcy papers. Since he’s seeking bankruptcy protection, it’s not unreasonable to theorize that his debts (what he owes) may outweigh his assets (what he owns).
Nonetheless, 50 Cent has 14 days from his July 13, 2015 bankruptcy filing to provide the court with a more specific accounting of his finances, including a precise list of his creditors and his debts. So we’ll find out soon enough to what extent, if any, his liabilities outnumber his assets.
Until then, even if we assume that 50 Cent is “technically” broke – or insolvent, by bankruptcy court standards or based on his liabilities exceeding his assets – what does or doesn’t this tell us?
It doesn’t suggest that he has completely run out of cash or assets, especially since 50 specifically noted the following in Page 1 of his bankruptcy filing: “Debtor estimates that funds will be available for distribution to unsecured creditors.” Translation: Dude still has a pot of resources somewhere that he can tap.
But the preliminary overview of the rapper’s finances does shed light on an important reality: that most of what we thought about 50 Cent all along was a myth, or at the very least an overblown mirage manifested by the media, and also fed by the entertainer himself.
Bling, Bling: The Art of Boasting and Bragging
We’ve all seen 50 Cent — and countless other singers, actors, athletes and entertainers — blinging on Instagram, Twitter and elsewhere.
With many rappers, in particular, much of their brand is tied to the art of boasting and bragging – not just lyrically, but also physically, with material goods.
Rappers know that they generate more publicity and fans when they flash wads of cash, sport gold jewelry and diamonds, hit the streets in tricked-out luxury cars, or show off their over-the-top mansions.
Let’s put aside for a moment questions about whether those cars and homes are actually fully paid for or whether they have loans and mortgages attached to them.
What’s often more important to a rapper’s public persona is how much you can floss. It’s about the image – whether real, somewhat exaggerated or entirely invented – that projects you as hard, living large and in charge.
Erroneous Media Reports
But for high-profile personalities like 50 Cent, one of the unfortunate byproducts of living in a celebrity-obsessed culture is that superstars’ alleged earnings and net worth are often revealed or publicly discussed in the media. By contrast, the average Joe’s income and net worth remain private, more often than not.
The problem is that celebrities’ supposed earnings – as reported in the media – are often way, way off the mark.
And truth be told: celebrities don’t have the time, inclination or interest to chase after reporters and others, trying to correct every erroneous story, and denying or confirming every ridiculous report about their finances that pops up on social media.
Consider this: How many times have you read an article, listened to a radio report or seen some TV program about a mega-star and heard astronomical numbers being thrown about?
A recent example: Momager Kris Jenner supposedly negotiated the mother of all reality TV deals in 2015 and now Kim Kardashian and the cast of Keeping Up With the Kardashians all got a hefty pay raise to the tune of a record-breaking, $100 million deal with E!
A variety of media outlets, ranging from Variety and Time Magazine to CNBC and TMZ, all report this kind of “news,” so it must be correct, right?
Wrong! If you believe all this madness, you’re just as gullible as the 10-year-old kid who says: “I saw it on the Internet so it must be true.”
Smart superstars know not to believe their own press. But the public routinely fails to get that memo. The latest case in point is what the public, and the media, believed about 50 Cent, whose real name is Curtis James Jackson III.
Just two weeks ago, the New York Times served up a fairly glowing profile of the hip hop mogul’s business acumen, lauding his “exceptional business instincts.”
Among other things, the Times wrote of 50 Cent: “He is the chief executive of G-Unit Records. He founded a headphones company, SMS Audio. And he owns part of a vodka brand and Frigo, a line of luxury men’s underwear. He also has a cologne, a sneaker brand and a video game series.”
This is all true, and 50’s profile in the Times was, in my opinion, still very deserved – yes, even despite his bankruptcy filing. Again, the truth is: in many ways, 50 Cent has been very adept at extending his brand and making money well beyond the music business and his reported 22 million in album sales. That’s laudable.
But the Times certainly isn’t alone, especially when it comes to a misguided fawning over celebrities based on how supposedly lucrative and plentiful their deals seem to be, or how much they allegedly earn.
What Is 50 Cent’s True Income and His Real Net Worth?
Take 50 Cent’s much talked about 2007 deal for the sale of Vitamin Water to Coca Cola.
Only two months ago, Forbes put 50 Cent’s estimated net worth at $155 million, largely based, the publication said, on the Vitamin Water transaction. (Obviously that inflated figure was laughably wrong and grossly off the mark, based on 50’s own recent financial disclosures. In light of the bankruptcy, Forbes now says it plans to revise its figures, calling the rapper’s troubles “a steep and sudden fall from financial grace.” Okaaaay).
While Forbes said 50 Cent banked $100 million from the Vitamin Water deal, the Washington Post put the rapper’s estimated haul from the deal at somewhere between $60 million and $100 million. Meanwhile, The Wall Street Journal said the entertainer’s take was in the range of $40 million to $100 million.
Needless to say, these are wildly different numbers.
So my point is – you can’t always trust all the figures about celebrity wealth or income that you seen thrown about in the media, even when those numbers come from established, respected publications.
Likewise, don’t believe everything you read about celebrities in books either. In 2010, author Dan Charnas wrote “The Big Payback: The History of the Business of Hip-Hop.”
Among other things, the book chronicled 50 Cent’s rise to stardom and his various business exploits. Want to guess what Charnas pegged 50 Cent’s net worth at, five years ago? Nearly “half a billion dollars.”
Kind of like the cost of that Brooklyn bridge I’m selling. Any buyers?
The Truth About 50 Cent’s Bankruptcy: Personal vs. Business
On a more serious note, let’s talk now about the nature of this bankruptcy petition. More to the point: did 50 Cent truly file for bankruptcy protection as a “smart business move” or to reorganize his business finances as so many people are suggesting? In a word, No.
On one level there’s Curtis Jackson, the man, and then there is 50 Cent, the brand.
As an entertainer, 50 Cent is an established brand. He’s been featured in 21 movies, including Southpaw, the boxing drama that’s hitting theaters this month. He has an upcoming album debuting in a few months. He also has a company all those various business interests that the Times highlighted. So yes, we all get it that celebrities are brands, in and of themselves.
But let’s be clear: this bankruptcy filing wasn’t about 50 Cent’s business interests per se. It’s about him reducing his personal liabilities. The distinction may be a fine one. So 50 Cent, his handlers, or even the media can spin it any way they want.
However, the fact remains: the Chapter 11 bankruptcy filing was done to allow Jackson, the individual, to reorganize various personal debts, not to let his business restructure its obligations, as is often the case with corporate entities filing under Chapter 11.
A close look at 50 Cent’s bankruptcy paperwork also reveals this, in several sections.
One part of the filing designates the debtor: it says “Individual”. It’s telling that the other boxes – for a “Corporation,” a “Partnership,” or “Other” – were not checked.
Elsewhere, the bankruptcy petition notes that 50 Cent’s liabilities are primarily consumer debts, defined as those “incurred by an individual primarily for a personal, family, or household purpose.”
Additionally, on 50 Cent’s bankruptcy form, it asks the debtor to specify whether the entity seeking bankruptcy protection is a small business. 50 Cent checked the box that stated: “Debtor is not a small business debtor as defined in 11 U.S.C.”
50 Cent’s lawyer even alluded to this fact, although the legalese in the following statement may have confused some people who misinterpreted the comment.
“This filing for personal bankruptcy permits Mr. Jackson to continue his involvement with various business interests and continue his work as an entertainer, while he pursues an orderly reorganization of his financial affairs,” the attorney, William A. Brewer III, said in a statement.
In other words, 50 Cent may be strategically protecting his personal assets, which, in turn, may help his business interests. Needless to say, that is a wise financial maneuver.
But the debts he owes and is seeking relief from in bankruptcy court are his and his alone – not his company’s. So this bankruptcy is a personal, financial move; not really a business move.
Jury Verdict May Be Minor Compared to Uncle Sam
Lastly, many people linked 50 Cent seeking bankruptcy protection directly (and exclusively) to him being ordered to pay $5 million to a woman who sued over a sex tape.
The woman claimed the “Get Rich or Die Tryin” artist posted the sex tape on line (of her and another man) without her consent.
In reality, that court judgment is likely one of many, many personal debts facing the rapper. It’s certainly not his largest debt, nor is it among his most serious obligations.
A separate lawsuit against 50 Cent resulted in him being ordered to pay a $17 million court judgment to Sleek Audio, a headphones company.
And there’s the tax issue that has so far escaped significant media coverage.
When Black Enterprise called the bankruptcy court to inquire about 50 Cent’s filing, the magazine was told that thus far 50 Cent only listed two creditors: the IRS and the State of Connecticut Department of Revenue Services.
Wait a minute; stop everything! This sheds a whole new light on things.
Since 50 Cent acknowledges owing taxes to the feds and the state of Connecticut, those tax debts could very well be the primary reason he headed into bankruptcy court. Again, how much he owes will soon be made clear.
But it was only two years ago that 50 Cent alluded to tax pressures, ironically in a 2013 feature interview with Forbes about the rapper’s vast car collection.
“If you’re familiar with my man Uncle Sam, you understand the only way you can actually feel better about what he’s gonna take, come the end of the year, is lifestyle,” the story quoted the artist as saying. “Only thing you can do is spend some of it.”
Is 50 Cent A Target of the IRS?
If the “In Da Club” rapper is presently deep in debt to the tax man, what 50 Cent has been saying in the wake of his bankruptcy filing about being a “target” takes on far greater meaning. As I’ve previously written, the IRS loves to go after celebrities, target them, and make an example out of them. And negotiating with the IRS is particularly tough for celebs. But bankruptcy can provide some leverage.
Whatever the case, it’s far too simplistic to think that a single event like one lawsuit, – albeit one culminating in a $5 million dollar judgment – would drive 50 Cent into bankruptcy given all of his ongoing business dealings.
I’m sure that even 50 himself would admit that he’s evolved as a businessman over the years, becoming more savvy, getting a team of financial advisors, etc. Back in 2007, though, when he got that lucrative Vitamin Water deal (whatever size it was), did he fork over all the federal and state income taxes he was supposed to pay? Only time will tell.
It’s doubtful though, that a $5 million judgment was the tipping point for a bankruptcy filing.
A much more likely scenario is that a host of personal debts – such as credit card bills, federal and state taxes, multiple court judgments, costly legal bills and other consumer obligations; heck, maybe even big medical bills following his hospitalization a few years ago – have all conspired to force his hand. Lifestyle costs and excessive spending probably haven’t helped either.
So neither extreme portrayal in the media has been accurate – 50 Cent isn’t flat-broke; nor is he “just fine” economically, as some have insisted.
The Numbers Don’t Lie
It doesn’t matter how many millions 50 Cent earned in the past or even whether his current income falls in the millions.
At the end of the day, there’s a cash flow problem with his personal finances, and his net worth has taken a serious hit. How do I know this? It’s simple: Any way you spin it, when individuals, companies or brands are well managed and financially healthy, they have no need to resort to bankruptcy.
That’s the bottom line truth about 50 Cent – despite what you may have seen on Instagram or read in Forbes.
As for me, I’m rooting for the rapper to make yet another comeback: financially and otherwise.
He’s overcome much tougher odds before.
