50 Cent took Vitaminwater equity rather than just an endorsement check; when Coca-Cola bought Glacéau for $4.1 billion in 2007, Forbes says he made $100 million

Imagine a scenario where a star rapper who survived a nine-bullet shooting spree receives an offer of a typical celebrity endorsement deal. A deal that involves immediate cash payment and a couple of commercials would have been enough to make most people sign right away. However, 50 Cent, the rapper and victim of the shooting, refused the lucrative proposition. According to Forbes, the rapper asked for something riskier but more rewarding: shares in the company instead of the cash. The decision would eventually reward the rapper with a nine-figure payout. It is not merely an example of a clever endorsement deal but also includes valuable advice on getting better opportunities in the industry. For the modern generation, which thrives on the multi-platform creator economy and promotions, this story provides relevant insights on the importance of equity-based deals.

The deal that was supposed to fail

At the time when the endorsement deal between 50 Cent and Glacéau was concluded, the latter was not a household name. In fact, the beverage company was a small, relatively lesser-known firm in New York when the rapper, apparently genuinely interested in the product, starred in a Reebok commercial alongside the drink. Following the report by Forbes, 50 Cent eventually received an equity stake in the company in exchange for a simple paycheck.

The report notes that the deal was far from successful at the beginning. No one expected the vitamin water brand to experience a significant increase in sales after being endorsed by a controversial rapper. Nevertheless, the rapper, seemingly determined to prove the critics wrong, integrated Formula 50 into his music, speeches, and public appearances.

The earnings that ultimately changed everything

In 2007, Coca-Cola Company acquired Glacéau for $4.1 billion in cash, one of the beverage giant's biggest acquisitions at the time. Because 50 Cent held equity rather than just a fee, that sale translated into a personal windfall. He walked away with $100 million and described the earnings from the deal as insignificant. He told Forbes, “People were talking about how much money I made, but I was focused on the fact that $4.1 billion was made.” The valuation of the deal, according to the rapper, was enormous, and the significant portion of it was due to his contribution. Undoubtedly, the rapper’s prediction saw the overall success of the brand that eventually became a household name.

The terms of the deal were not disclosed publicly. Particularly, during 50 Cent’s bankruptcy in 2015, the rapper claimed that keeping the terms secret was necessary to remain competitive in the industry. While the details of the deal may suggest a one-sided relationship between the rapper and the beverage company, the Forbes article shows that the situation might be more complicated than it appears.

The marketing aspect of the deal and the celebrity endorsement

While the Forbes article only partially discloses the details of the famous endorsement deal, the marketing aspect of the operation remains evident. Notably, the star rapper’s collaboration with the beverage company has been a successful experiment that validated the value of celebrity endorsements for brands. Particularly, according to a Harvard Business Review 2012 study titled “The Economic Value of Celebrity Endorsements,” published in the Journal of Advertising Research, celebrities’ cooperation with brands resulted in a “significant positive effect” for the latter. While the report suggests that companies need to carefully assess the risks and rewards of a celebrity endorsement deal, the positive examples proved that such cooperation could be worthwhile.

The takeaway for everyday influencers

While the majority of influencers will likely remain far from famous beverage companies, the example shows the importance of negotiating higher shares in a company for influencers’ content. Nevertheless, this also demonstrates that such deals are not fail-proof: in many cases, they can result in catastrophic losses for a company. It is therefore a reminder that asking for more is the only way to ensure that one's hard work and high-quality content will be rewarded accordingly.