The tattered stretch of West Slauson Avenue just off Crenshaw Boulevard in Los Angeles isn’t the first place you’d expect to see a Cadillac Escalade roll up and deliver a Grammy-nominated musician. At the tiny strip mall on the south side of the street, storefronts include an off-brand taco joint, a Boost Mobile outlet and an accountant’s office advertising same-day tax refund advances up to $6,000.
This is where Nipsey Hussle decided to spend a recent Friday morning, and for good reason. His Marathon Clothing store, which peddles Crenshaw hoodies alongside his own music, occupies the corner of the L-shaped plaza. His history here goes back even further—in fact, it’s where he got his name.
“Before we was renting here, I was hustling in this parking lot,” says Nipsey, 33, born Ermias Asghedom. “It’s just always been a hub for local entrepreneurs.”
Change is coming to Crenshaw, and Nipsey is aiming to be on its bleeding edge: This month, Nipsey and business partner Dave Gross swooped in to pay “a couple million” for the plaza. Within 18 months or so, they’ll knock everything down and rebuild it as a six-story residential building atop a commercial plaza where a revamped Marathon store will be the anchor tenant.
In the meantime, a light rail line is rising to link Crenshaw—which, crucially, qualifies as a tax-advantaged Opportunity Zone—to Los Angeles International Airport and other key nodes of sprawling Southern California. The plaza will be among the first to benefit: There’s a brand-new train station under construction just steps away.
Nipsey may not be hip-hop’s biggest name, but he’s certainly among the genre’s most entrepreneurial. His slow-burn career started to catch fire six years ago when Nipsey offered 1,000 copies of his mixtape Crenshaw for $100 apiece—Jay-Z bought 100 copies—and rolled the profits into his label, All Money In. He released just 100 copies of a subsequent offering, Mailbox Money, with a price tag of $1,000.
“[Nipsey] was not trying to be independent just for the sake of it, but thinking about the benefits of being an independent artist,” says Chris Lyons, who has known Nipsey for several years and runs Andreessen Horowitz’s Cultural Leadership Fund, which counts Nas and Diddy as investors. “The most important thing is his ability to just see where future trends are going and not being afraid to pioneer.”
For Nipsey, the hustle started at home. He grew up down the road from the plaza, in what he calls “the worst house on the best block,” cutting grass and shining shoes to make extra cash as a kid before falling in with local gangs. Fortunately, his musical role models were entrepreneurs as well, offering a way out of a dead-end path.
Dr. Dre, from nearby Compton, built Death Row Records into one of the most influential labels in hip-hop history before eventually shifting focus to his namesake headphone line. Watching Dre from up close and moguls like Jay-Z and Diddy from afar gave Nipsey “the blueprint of what could be done with the platform of being a successful rap artist,” he says.
Nipsey started putting out mixtapes in 2005; on one of his early songs, Hussle In The House, he made sure to include a few financial lessons of his own. “Straight off the block, I sold dope to buy groceries,” he rapped. “Now it’s rap money, no advance, it’s all royalties.” Nipsey also prophetically flicked at his future Opportunity Zone gambit: “Pay taxes to these corners and put in work, it’s a policy.”
For his first music video, he wanted to do something that both represented his hometown and offered a path to earnings beyond music. Leafing through an old yearbook, he noticed a picture of local legend Darryl Strawberry in a vintage Crenshaw High School baseball jersey. Nipsey ordered a batch of throwback blue-and-yellow shirts with “Crenshaw” scripted across the front to wear in the shoot.
When the video ended up on MTV, scores of people started asking about “Crenshaw Clothing.” Nipsey had other ideas. A friend had given him a book called The 22 Immutable Laws Of Marketing, packed with Procter & Gamble case studies. As Nipsey ruminated on these lessons in the context of his own journey, the word “Marathon” came to him—it had more potential, he thought, than Crenshaw, a location most people couldn’t place on a map.
Nipsey flirted with major labels, signing with Epic but leaving in 2010—with his catalog intact—after a management change left his official debut album in limbo. While continuing his prolific mixtape output, he became obsessed with the notion of social currency, prompting the release of his $100 mixtape in 2013.
“I believe that economics is based on scarcity of markets,” he told Forbes at the time. “And it’s possible to monetize your art without compromising the integrity of it for commerce.”
Meanwhile, Nipsey continued to give away other mixtapes to satiate his fans, who in turn supported him by buying concert tickets and merchandise. He turned down new record deals because the labels all seemed to want a piece of his burgeoning broader business.
He didn’t need the cash, thanks to his ancillary income and his TuneCore catalog, which was earning him monthly royalty checks in the low six figures. After a couple of years, though, Nipsey had built up a good amount of leverage. He decided to cut a deal with Atlantic that enabled him to make Victory Lap, his official major label debut.
“It’s a partnership. … I shook hands and said I wouldn’t give full details, but we’re sharing everything: profit, masters,” he says. “I was holding out for a long time for these terms.”
Nominated for Best Rap Album at this year’s Grammy Awards, the record paired his rapidly improving socioeconomic status with a career-long message of fiscal responsibility. In one verse, he blustered about Benzes and Bentleys—and touted his trust accounts alongside the “million-dollar life insurance on my flesh.”
At the same time, Nipsey was looking for other ways to expand his empire. He met Gross, a private-equity and real-estate investor, courtside at a Lakers game several years ago. (“We started drinking tequila,” says Nipsey. “By the third quarter, we was more friendly.”) They bonded over Gross’s idea for an inner-city co-working space now known as Vector90.
They eventually teamed up to buy the plaza on West Slauson, currently zoned for buildings that max out at 40 units. Nipsey and Gross are aiming for 100 units, which requires a lengthy entitlement process, so they’ve been working with the city and local council members on the details—hence the long timeline. And they’re building smart.
Buried in the tax overhaul of 2017 is a provision to encourage investment in state-designated low-income enclaves known as Opportunity Zones. Under the law, investors can shift capital gains into institutions located in these areas, where the capital is taxed at a reduced rate; new opportunity investments can grow tax-free.
There are basically no limits on the amount of money that can be plowed into an Opportunity Zone or the amount of tax that can be avoided. Is it possible the program is excessively business-friendly? Not for its ambitious goals, backers say.
“The incentive needs to be powerful enough that it can unlock large amounts of capital, aggregate that capital into funds and force the funds to invest in distressed areas,” billionaire Sean Parker told Forbes last year. “Instead of having government hand out pools of taxpayer dollars, you have savvy investors directing money into projects they think will succeed.”
Parker was part of a diverse group of Opportunity Zone proponents that included Senators Tim Scott of South Carolina, a Republican, and Cory Booker of New Jersey, a Democrat. Like Parker, they argue that bold moves are necessary to fix entrenched ills: To qualify for the program, an area must have a median household income 80% less than nearby neighborhoods’ or a poverty rate of at least 20%.
Gross and Nipsey saw a perfect fit for Crenshaw.
“This is the quintessential Opportunity Zone investment,” says Gross. “The law is supposed to support ground-up entrepreneurship, giving opportunities and jobs to all communities and improving the neighborhood.”
The purchase of the plaza also marks the beginning of a coalition called Our Opportunity—led by Gross, with Nipsey as a founding partner—that will aim to team with local legends in 10 cities as part of a broader Opportunity Zone-based fund. From there, Nipsey envisions building a tax-advantaged lifestyle empire, all linking back to his music.
“The vision is to launch franchises,” says Nipsey, imagining a line of The Marathon Clothing stores, barbershops, fish markets, restaurants. “There’s such a narrative to this parking lot—that’s a part of my story as an artist.”
-Zack O’Malley Greenburg; Forbes Staff
Forbes Africa’s Best Photographs In 2019
[Compiled by Motlabana Monnakgotla, Gypseenia Lion and Karen Mwendera]
Kabelo Mpofu, an entrepreneur, took over his mother’s shop in Meadowlands, in the South African township of Soweto. He is hopeful of making the family business a success despite big retail stores opening up in the townships and swallowing up the corner groceries.
Africa is the youngest continent in the world. Every year, South Africa observes June as Youth Month, honoring the anniversary of the Soweto Uprising on June 16. In this image, the country’s sprawling township of Soweto comes alive with youth dancing in the winter weather to local and international music at the Soweto International Jazz Festival, an annual confluence of history, art and culture.
Women hold up placards against gender-based violence during a ‘Shutdown Sandton’ campaign; this after a spate of brutal rape and killings in South Africa.
Car dealerships were among the businesses set alight in Johannesburg’s Jules Street, during the spate of xenophobia attacks in South Africa in August this year. The spark that fueled the raging fire began in Pretoria, the country’s capital, when a taxi driver was shot dead by a foreign national who was selling drugs to a youngster in the central business district.
Sibusiso Dlamini, the co-founder of Soweto Ink, works on one of his regular clients at his tattoo parlor founded in 2014 with his long-time friend, Ndumiso Ramate. In 2019, Soweto Ink held the fourth annual tattoo convention, and for the first time in partnership with BET Africa, to break tattoo taboos in Africa.
Mmusi Maimane, the former leader of South Africa’s opposition party, Democratic Alliance, is about to cast his vote in front of local and international media houses who had wrestled to get the perfect shot in his hometown in Dobsonville, Soweto, during the elections in South Africa in 2019.
The brother of South African journalist, Shiraaz Mohamed, begs for government intervention after Mohamed was kidnapped in Syria on January 2017 by a group of armed men. The group demanded more than $500,000 for his freedom.
South African President Cyril Ramaphosa with his body guards at the Sandton Convention Centre in Johannesburg, South Africa, where the three-day South Africa Investment Conference was held in November.
In a world that’s embracing new technology, inspiration is being found in bug behavior. The hard-bodied dung beetle is now key to robotics research, in Africa too. Astounded by this discovery early this year is Marcus Byrne, a researcher at the University of the Witwatersrand in Johannesburg who has been studying dung beetles for over 20 years. He holds up a metallic replica of a dung beetle in his hand in his office at the university.
Mzimhlophe Hostel, a hostel among many others in Soweto, erupted with service delivery protests prior to the elections in South Africa. In the same vicinity, an informal settlement was also allegedly set on fire. Brothers Mduduzi (32) and Kwenzi Gwala (22), pictured, had arrived in Johannesburg looking for employment. They sold African beer, but their shack was set alight while they were still at church. They lost all their stock and possessions.
A thrift market in the heart of Johannesburg’s central business district, not too far from a busy taxi rank, known for its pavement robberies. Despite the crimes, thousands of small entrepreneurs trade in this raucous market every day.
ANC, DA and EFF supporters dancing and chanting outside the Hitekani Primary School in Chiawelo, Soweto, South Africa, as they await South African President Cyril Ramaphosa to cast his vote in his former primary school.
Tenants in the discarded Vannin Court in Johannesburg look on from their balconies as jubilation erupts on the ground floor.
Vestine Nyiravesabimana makes money weaving intricate baskets made of grass to feed her nine children in Kigali, Rwanda.
Can Diddy’s Ciroc Recipe Work On Alkaline Water?
The first time Sean “Diddy” Combs took a sip of Aquahydrate alkaline water—given to him by pal Mark Wahlberg at a Las Vegas boxing match in the early 2010s—he found it to be an ideal antidote for evenings spent consuming adult beverages.
“I went out that night and had a Vegas night, and I woke up and had a Vegas morning,” Diddy told me in 2015. “I drank two of the [Aquahydrate] bottles and it was, like, the best tasting water that I’ve tasted. And it really, honestly helped me recover.”
Diddy became the face of the company alongside Wahlberg shortly thereafter, and the pair invested $20 million in Aquahydrate over the years while billionaire Ron Burkle’s Yucaipa added another $27 million.
They aren’t the only ones with lofty ambitions for the brand: last week the Alkaline Water Co., the publicly-traded purveyor of competitor Alkaline88, bought Aquahydrate in an all-stock deal that valued the latter at about $50 million.
For Diddy, who ranks No. 4 on our recently-released list of hip-hop’s top earners and boasts a net worth of $740 million, alkaline water holdings are just a drop in his financial bucket. His Diageo-backed Ciroc vodka—and its myriad flavors, from Red Berry to Summer Watermelon—is responsible for the lion’s share of his wealth. But it’s clear he thinks alkaline water, flavored variants included, could swell his portfolio. So do his new partners.
“You put both these brands under one public company, it makes a ton of sense,” says Aaron Keay, Alkaline’s chairman, of the Aquahydrate deal. “We see synergies on distribution, we see cost-savings on cost of goods. On production, on logistics, on staffing. … And we don’t see both brands actually then competing for the same target market.”
In the past, flavored water has enriched investors including some of Diddy’s hip-hop world comrades. A little over a decade ago, 50 Cent famously took Vitaminwater equity in lieu of stock as payment for his endorsement—and walked away with some $100 million when Coca-Cola bought its parent company for $4.1 billion in 2007.
A ten-figure valuation for an alkaline water company seems an outlandish target even for the notoriously bombastic Diddy. But Keay notes Alkaline clocked $33 million in revenues over the past fiscal year and had been expecting $48 million in 2020; now, with Aquahydrate on board, he projects closer to $60-$65 million. That compares favorably to Core Water, which was doing some $80 million as of last year before getting acquired.
“For two or three years, Core Water was just another clear water,” says Keay. “Then they added about a half dozen flavors. Sales doubled. They got bought for $500 million. I mean, for us, $500 million would be a big number off of where our market cap is right now.”
Diddy appears to be an ideal ally in achieving that goal. With Ciroc, once a middling vodka in Diageo’s roster, he was able to articulate importance of the brand’s defining trait: it was made from grapes, not grains (never mind that this might technically disqualify it from being considered a vodka). His contention, according to Stephen Rust, Diageo’s president of new business and reserve brands, is that grapes are simply sexier than potatoes.
“One of his favorite things [to say] is, ‘If you can have a vodka that comes from a history of winemaking, why would you do that versus the history of coming from potatoes?’” Rust explained in an interview for my book, 3 Kings: Diddy, Dr. Dre, Jay-Z, And Hip-Hop’s Multibillion-Dollar Rise. “That’s Sean.”
With alkaline water, Diddy has demonstrated a similar knack for sizing up a product and extracting an elemental notion that passes muster with consumers (if not necessarily scientists). If “you’re full of acid,” Diddy once explained to me, you need to “get your body leveled out.”
Vodka and water, of course, are two very different products, and the same tactics won’t necessarily translate from one business to another. Flavored water itself seems to have been over-carbonated of late, as the recent struggles of brands like La Croix show; Alkaline’s shares have slumped this year as well.
Perhaps that’s why Alkaline is looking beyond its flagship bottled water business. Future plans call for a move towards cans in a nod to environmentally-conscious customers, as well as expansion into the nascent CBD-infused beverage space. Keay figures Diddy and Wahlberg, along with fellow celebrity investor Jillian Michaels, should provide a boost across the board.
“Once the FDA makes a ruling about how CBD is going to be distributed through those chains and channels, those guys are going to want trusted brands, brands that they know already have a consumer following,” says Keay. “And that was another big reason why it made sense to bring [Diddy, Wahlberg and Michaels] in, because it’s only going to help.”
–Zack O’Malley Greenburg; Forbes
The Highest-Paid Actors 2019: Dwayne Johnson, Bradley Cooper And Chris Hemsworth
A bankable leading man is still one of Hollywood’s surest bets, even if your name isn’t Leonardo DiCaprio. While the lucrative twenty-twenty deal ($20 million upfront and 20% of gross profit) doled out to the likes of Harrison Ford and Tom Cruise may be more or less gone, Hollywood still has its big-money brands, those actors who can promise an audience so big that they command not only an eight-figure salary to show up on set but also a decent chunk of a film’s nebulous “pool”—or the money left over after some but not all of the bills are paid.
Dwayne Johnson, also known as the Rock, tops the Forbes list of the world’s ten highest-paid actors, collecting $89.4 million between June 1, 2018, and June 1, 2019.
“It has to be audience first. What does the audience want, and what is the best scenario that we can create that will send them home happy?” Johnson told Forbes in 2018.
It seems he makes the audience happy. Johnson has landed a pay formula as close to the famed twenty-twenty deal of yore as any star can get these days. He’ll collect an upfront salary of up to $23.5 million—his highest quote yet—for the forthcoming Jumanji: The Next Level.
He also commands up to 15% of the pool from high-grossing franchise movies, including Jumanji: Welcome to the Jungle, which had a worldwide box office of $962.1 million. And he is paid $700,000 per episode for HBO’s Ballers and seven figures in royalties for his line of clothing, shoes and headphones with Under Armour.
While Johnson’s deal is the biggest in the business right now, he’s not the only one with a lucrative deal. Robert Downey Jr. gets $20 million upfront and nearly 8% of the pool for his role as Iron Man, and that amounted to about $55 million for his work in Avengers: Endgame, which grossed $2.796 billion at the box office.
That gross was so big that it secured spots on this year’s top-earner list for Chris Hemsworth, Bradley Cooper and Paul Rudd, in addition to Downey; together, they earned $284 million, with most of that coming from the franchise.
“Celebrities such as Downey and (Scarlett) Johansson currently have extreme leverage to demand enormous compensation packages from studios investing hundreds of millions of dollars in making tent-pole films, such as The Avengers series,” entertainment lawyer David Chidekel of Early Sullivan Wright Gizer & McRae told Forbes.
READ MORE | Worldwide Box Office, The Best It’s Ever Been
Cooper is the rare actor who can thank a bet on himself for his 2019 ranking. The actor earned only about 10% of his $57 million payday for voicing Rocket Raccoon in Avengers.
Seventy percent came from A Star Is Born, the smaller musical drama that he directed, produced, cowrote and starred in with Lady Gaga. The movie was a passion project for Cooper, and he forfeited any upfront salary to go into the film and Gaga’s salary. It paid off—the movie, which had a production budget of only $36 million, grossed $435 million worldwide, leaving Cooper with an estimated $40 million.
The full list is below. Earnings estimates are based on data from Nielsen, ComScore, Box Office Mojo and IMDB, as well as interviews with industry insiders. All figures are pretax; fees for agents, managers and lawyers (generally 10%, 15% and 5%, respectively) are not deducted.
The World’s Highest-Paid Actors Of 2019
10. Will Smith
Earnings: $35 million
9. Paul Rudd
Earnings: $41 million
8. Chris Evans
Earnings: $43.5 million
6. Adam Sandler (tie)
Earnings: $57 million
6. Bradley Cooper (tie)
Earnings: $57 million
5. Jackie Chan
Earnings: $58 million
4. Akshay Kumar
Earnings: $65 million
3. Robert Downey Jr.
Earnings: $66 million
2. Chris Hemsworth
Earnings: $76.4 million
1. Dwayne Johnson
-Madeline Berg; Forbes
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