Rapper Faces $16 Million Loss in a Partnership Dispute with Florida Company

Celebrity product lines can be lucrative, but beware the fine print.

For many celebrities and entertainers, artistically creative years are followed by lucrative years during which licensing, endorsement and joint venture deals lead to high-value personal incomes. Business opportunities are often governed by contracts, which have the potential to result in costly litigation if not adhered to completely. A dispute between celebrity rapper 50 Cent and a Florida personal headset manufacturer and marketer illustrates the need for a clearly-outlined contract in any entertainment-related business agreement.

In 2010, 50 Cent (whose real name is Curtis Jackson), partnered with Sleek Audio of Bradenton. Specifically, Jackson lent $285,000 to the company so that they could develop 50 Cent-branded headphones. Sleek created the headphones per its agreement with Jackson, but Jackson became frustrated with the speed at which Sleek brought the new products to market. In 2011, Jackson brought Sleek’s headphone designs to the Delray Beach manufacturer SMS Audio, who then proceeded to produce several headset lines for Jackson.

In its complaint, Sleek claimed that Jackson did not follow through on his obligation to launch a product line with them, and then launched a line featuring designs Sleek-owned designs. Faced with courtroom litigation, Jackson eventually agreed to have the dispute arbitrated.

During the arbitration proceedings, Jackson expressed frustration with the company’s alleged poor management, he claimed that Sleek fraudulently induced him to invest in the company. The arbitrator responded with sympathy to Jackson’s frustration, but also indicated that it did not justify Jackson taking Sleek’s intellectual property to another firm. The final ruling was a serious blow to Jackson: $4.5 million in attorneys fees and $11.7 million in damages.

As this case demonstrates, frustration, impulse and even good business sense are no substitute for carefully following both the law and the specific terms of a business contract. If you need legal assistance regarding entertainment and contract law in Florida, contact Attorney Tom J. Manos in Miami. We can assist you both in the creation of business agreements and with litigation in the event of a dispute. Call us at 305-341-3100.