The music mogul pointed to Diageo's $1 billion acquisition of competing tequila brand Casamigos, which was founded by George Clooney, as evidence of racial discrimination.
Spirits giant Diageo said it’s severing a partnership of 15 years with Sean “Diddy” Combs, who helped grow the company’s then-struggling Ciroc label as a brand ambassador and joint-venture partner.
The move was in response to the music mogul suing the British alcoholic beverage maker in June for racial discrimination, claiming that Diageo starved his vodka and tequila brands of promised investments and only marketed them to “urban” consumers. Diageo made the announcement on Tuesday in a court filing seeking to dismiss the case or move it into arbitration.
In a statement, Combs’ lawyer John Hueston said, “Diageo attempting to end its deals with Mr. Combs is like firing a whistleblower who calls out racism.”
“Over the years, he has repeatedly raised concerns as senior executives uttered racially insensitive comments and made biased decisions based on that point of view,” he added. “Diageo even acknowledged the problem by agreeing in his contract to treat DeLeón the same way it treated their other tequila brands.”
Diageo first approached Combs in 2007 to handle marketing and promotion for Ciroc in an equal-share joint venture. He said in the suit that he “sparked spectacular growth” for the Ciroc and DeLeón labels despite the company refusing to devote proper resources, arguing that they were “typecasted” as “black brands that should be targeted only to ‘urban’ consumers.” Diageo allegedly didn’t comply with its obligations in the agreement by producing lower quantities, distributing in “fewer outlets” and “limiting its marketing and promotion of” DeLeón, as compared to other brands, according to the complaint.
In 2014, Diageo acquired competing tequila brand Don Julio and committed to spending $400 million to grow the business. The company then spent $1 billion three years later to acquire Casamigos.
“Following its acquisition of these competing brands, Diageo effectively abandoned DeLeón,” states the complaint. “Diageo instead focused its market positioning efforts on brands like Casamigos (with its founders George Clooney, Randy Gerber, and Mike Meldman), Aviation Gin (with its owner Ryan Reynolds), and Ketel One (with the Nolet family) as its preferred choices for the broader market.”
Diageo, moving to dismiss the suit, stressed that its contract with Combs doesn’t require equal treatment of his brands but rather “measured and proportionate treatment and support of the DeLeón brand, while ‘taking into account’ a variety of differences among the brands,” according to a court filing.
The company said in a statement on Tuesday that Combs has “repeatedly undermined our partnerships and threatened to publicly defame Diageo if we did not meet his unreasonable financial demands.”
“We tried for years to salvage the broken relationship with Mr. Combs,” added the company. “We funded the purchase of DeLeón for the joint venture and proceeded to invest more than $100 million to grow the brand. Despite having made nearly a billion dollars over the course of our 15-year relationship, Mr. Combs contributed a total of $1,000 and refused to honor his commitments.”
While buyers in more affordable ranges are experiencing massive housing shortages, that’s not the case for the Los Angeles luxury home market.
"We have a good amount of inventory,” Josh Altman, co-founder of the Altman Brothers, a real estate agent firm that focuses on luxury homes, told Yahoo Finance LIVE (video above). "Good houses still are selling."
In Los Angeles, there are 400 available listings for single families over $5 million, representing 18% of the total single-family inventory of around 2,200 homes, according to a filter search on Redfin.com.
But there are a lot fewer buyers in this price range. A $5 million home requires buyers to earn around $850,000 a year, a bracketed range that includes less than 1% of Californians, based on data analyzed by SmartAsset. (Note: The average U.S. income is around $70,000)
"I think the buyer has the upper hand," Altman said.
Luxury buyers took a breather in April, though, after Los Angeles City imposed a so-called "mansion tax" — officially known as the Measure ULA — to help fund solutions for the city's homeless crisis. The measure tagged on an extra 4% in taxes for properties sold over $5 million and 5.5% on properties sold over $10 million. That was on top of the city's base transfer tax.
This new measure dented demand for houses over that threshold in Los Angeles. Only two properties sold in Los Angeles in April were over the $5 million mark, compared with 126 condo and homes sold in March, one month ahead of the ULA deadline, according to the Los Angeles Times.
"We had an extremely slow April," Altman said.
Sellers, knowing the tax was looming, tried to offload properties before April. One developer promised an Aston Martin, Bentley, or McLaren vehicle to the buyer of its $16.5 million listing, a new construction home in Beverly Hills, as long as the purchase was made before April 1.
The home didn’t sell and remains on the market, even after a price cut of $500,000.
Actor Mark Wahlberg sold his Beverly Hills mansion for $55 million in February only after a $32.5 million price drop.
"Across the board, the buyer mentality is all about a deal these days," Altman said.
With good reason. The ULA rates are not progressive, which means the taxes are levied against the total value of the property and not just the additional amount over the threshold.
For instance, a property transaction of $5,000,001 triggers $222,500 of tax revenue, according to the city's ULA tax calculator. The two luxury homes sold in April — at $5.7 million and $7.5 million — brought in over $500,000 for Measure ULA.
But there are signs that buyers are coming back, Altman said, noting that May was the strongest month with closings and June is "looking like it's going to double that," he said.
"I'm sitting in my car out front of a listing because I got a big showing," he said, "which is always a good sign."
By: Rebecca Chen
Tyler Perry reportedly stands as the new owner of BET. According to an initial report by Streamr, the media mogul will take control of Black Entertainment Television and VH1, both once owned by Paramount.
However, the original report by Streamr has been removed from its site. Paramount, BET or Perry has yet to confirm or deny the report.
If the deal is finalized, it will come several years after Perry partnered with BET to launch BET+, a streaming service which features original TV and film projects produced by Perry.
Started by Bob Johnson in 1980, BET provided Black content in an era where minorities rarely got an opportunity to showcase work on network TV. In 2000, Johnson sold BET for $2.3 billion to Viacom. Viacom would eventually become Paramount.
Perry has worked with BET since 2017 and has several original programs on the streaming service BET+. If Perry is able to secure the deal, he would be able to add the cable station and streaming service to his media empire which also includes the 330-acre Tyler Perry Studios in Atlanta.
It would also clear the way for BET to receive advertising dollars geared to minority owned media companies. General Motors and Coca-Cola have committed to significantly increasing ad spends for companies in that sector.
According to Forbes, Perry is worth $1 billion.