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Jay-Z Midas Touch Fades; Hip-Hop, Rap in Financial Crisis

Jay-Z Midas Touch Fades; Hip-Hop, Rap in Financial Crisis 1Jay-Z made a fortune on the rise of hip-hop and rap and now that the genre is in decline, his vast business empire is showing signs of financial distress.

Whether it’s hip-hop’s fading presence, the bad economy, an inattention to business, or a combination of all three, Jay-Z’s clothing line, Rocawear, is being rocked by financial distress.

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He launched the company during the height of the rap and hip-hop boom in 1995. It was an era that made millionaires out of rap stars seemingly over night. But big spending and bad luck have taken its toll.

Check out these celebrity bankruptcies

David Adkins (“Sinbad”): comedian; actor (2009).
Kim Basinger: Oscar-winning actress (1993).
Jay Black: “Jay and the Americans” (1986).
Lorraine Bracco: Oscar-nominated actress (1999).
Toni Braxton: rock star (1998, 2010).
Anita Bryant: singer; 1958 Miss America 2nd runner-up (1997 and 2001).
George Clinton: rock star (1984).
Natalie Cole: singer
Derrick Coleman: NBA basketball player (2010).
Gary Coleman: actor (1999).
Francis Ford Coppola: Oscar-winning film writer-director-producer (1990).
Cathy Lee Crosby: actress; American author (1992).
Vic Damone: singer (1971).
Dorothy Dandridge: Oscar-nominated actress-singer (1963).
Dino De Laurentis: Oscar-winning film producer (1988).
Walt Disney: Oscar-winning film producer;theme park pioneer (1923).
Lenny Dykstra: American baseball player (2009).
Keith Famie: Survivor II: The Australian Outback
Mick Fleetwood: rock star; “Fleetwood Mac” (1984).
Heidi Fleiss: Hollywood madam (1999).
William Fox: co-founder 20th Century Fox Film Corp (1936).
Marvin Gaye: singer (1970s).
Andy Gibb: rock star (1987).
Bob Guccione: publisher and founder of Penthouse magazine (2003)
Merle Haggard: country music star (1993).
Corey Haim: actor (1997).
Dorothy Hamill: Olympic gold-medal ice-skater (1996).
M.C. Hammer: rock star (1996).
Richard Harris: Oscar-nominated actor-producer-director
Isaac Hayes: Oscar-winning songwriter-singer (1976).
Sherman Hemsley: actor (2002).
Ron Isley: singer, Isley Brothers (mid-late 1990s).
La Toya Jackson: singer (1995).
Don Johnson: actor-producer (2204).
Randy Johnson: NFL football player (1977)
Kacey Jones: country music star
Clay Jordan: Survivor V: Thailand contestant (2001).
Chaka Kahn: singer (1997)
Larry King: talk-show host (1978).
Gary Kurtz: Oscar-nominated film producer
Veronica Lake: actress (1951).
Lorenzo Lamas: actor (2004).
Cyndi Lauper: rock star (1983).
Stan Lee: co-creator of “Spider Man (2001)
Meat Loaf: rock star (1983).
Mindy McCready: country music star (1997).
Vince McMahon: Professional wrestling businessman.
Melba Moore: singer-actress (1990s).
Willie Nelson: singer-songwriter-actor.
Mary Nolan: actress (1931).
Johnny Paycheck: country music star (1976).
Tom Petty: rock star (1979).
Burt Reynolds: Oscar-nominated actor-director (1995).
Debbie Reynolds: Oscar-nominated actress-singer (1997).
Mickey Rooney: Oscar-nominated actor (1962).
Harry Saltzman: film producer (James Bond movies) (1975).
Ray Sawyer: rock star; “Dr. Hook and the Medicine Show” (1973).
Anna Nicole Smith: model-actress
Dick Smothers: comedian (2010).
Jaime & Lynne Spears: Britney Spears’ mother and father (1998).
TLC: rock group (1995).
Donald Trump: real estate mogul several times.
Mike Tyson: boxer (2003).
Michael Vick: Philadelphia Eagles (2008).
Vinnie Vincent: rock star, Kiss (1989).
Tammy Wynette: country music star (1988).

A study by none other than the prestigious Harvard Business School found that hip-hop record sales skidded by nearly 20 percent between 2007 and 2008 when the financial crisis hit, leading other genres.

Between 2008 and 2009, the top 20 earners saw their incomes decline by 40 percent from the previous year, according to the study. No wonder Beyonce is working so hard.

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Rocawear isn’t the beginning of Jay-Z’s financial crisis. He was stung by a sour real estate deal, when he failed to get financing for his $66 million New York hotel venture.

The rapper, real name Shawn Carter, sued his development partners in 2010 charging that the soured investment had cost the mogul more than $1 million in interest, after partners defaulted on a $52 million loan. He sued seeking to collect $3.7 million, charging that his partners were bleeding him.

The lawsuit was settled in Dec. 2010 out of court. Terms were not disclosed but Jay-Z was forced to surrender his interest in the property.

Rocawear hit the skids last year, as global sales fell by $500 million, forcing his flagship Manhattan store to lay off half its 56 employees among other belt-tightening steps. In a last-ditch effort to revive the brand, Jay-Z is personally doing commercial for the line.

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Rocawear tried to cash in on the Occupy Wall Street movement with “Occupy All Streets” t-shirts, without cutting in the Occupy Wall St. movement. The shirts were pulled after an uproar.

Now it’s up to Jay-Z to personally save the company. The black and white spots will be titled “From Marcy to Madison Square,” tracking the moguls career from Brooklyn’s projects to New York’s most venerable concert venue, according to Women’s Wear Daily.

Meanwhile, the list of Hip-Hop bankruptcies continues to grow, from producer Scott Storch, who reportedly once spent $30 million in six months, to Young Buck, aka David Darnell Brown; T-Boz, aka Tionne Watkins of TLC; Toni Braxton, twice and Suge Knight.

Of course, celebrity bankruptcies aren’t limited to hip-hop stars. Larry King, Mike Tyson, Cyndi Lauper, Corey Haim, celebrity trainer Tracy Anderson and Sopranos actress Lorraine Bracco also filed for bankruptcy.

In the end, it doesn’t matter how much money you make; if your expenses exceed your income, bankruptcy looms in your future. Typically soured business ventures prove to be celebrity undoings. Can Jay-Z survive his?

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