Cash Kings 2012: Hip-Hop’s Top Earners

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(From Forbes.com, September 5, 2012) The Forbes 2012 list of top twenty hip-hop earners has been released, and the veterans are dominating the top of the page. Andre “Dr. Dre” Young sits atop the list with $110 million in pretax earnings, which more than doubles the $45 million year of Sean “P Diddy” Combs, earning the second most in the hip-hop business.

The explanation for Dr. Dre’s success cannot be found in his latest Detox album’s sales, which were subpar at best. The explanation can be found by simply turning on any major NCAA or professional sporting event and watching nearly every athlete strut off of their respective team bus prior to the game sporting a pair of large red, black, or white Beats By Dr. Dre headphones.

Business ventures are nothing new to the hip-hop game, but unlike most rappers, who choose to brand different types of vodka or shoes, Dr. Dre chose the broad market of headphones to venture into at the advice of Jimmy Iovine, Interscope Records chief. Iovine told Dr. Dre six years ago, while debating launching a shoe line, “(Forget) sneakers, let’s sell speakers!” The idea paid off when handset maker HTC paid $300 million for a 51% stake in Beats By Dr. Dre last year, with Dr. Dre receiving $100 million pretax.

Dre is not the only man in hip-hop cashing in on non-music business ventures. Most of P Diddy’s $45 million year came in his share of profits from Diageo’s Ciroc vodka; Jay-Z’s bronze medal, $38 million earnings came largely in part from his ownership stakes in cosmetics company Carol’s Daughter, the Brooklyn Nets, and a joint venture with Duracell batteries.

Ranking fourth on the list is Kanye West, bringing in $35 million following his Watch the Throne collaboration with Jay-Z. Dwayne “Lil Wayne” Carter and his fellow Cash Money label artists, Drake, Birdman, and Nicki Minaj hold the fifth through eighth spots on the list. The hip-hop’s top 20 earners raked in $415 million all together last year, marking the most successful year in hip-hop since 2008’s $515 million.