When someone brags about how much money they made in any venture in life, take it with a grain of salt. When that person is rapper Soulja Boy on Twitter, donât even bother listening to their candy ass.
Earlier this month I wrote about how Soulja Boy was bragging on Twitter about signing a $400 million endorsement deal. $400 million would make Soulja Boy one of the richest rappers in the world. Not bad for a 25-year-old who caused the world to âCrank Thatâ for a hot second almost a decade ago.
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I was skeptical about Soulja Boyâs insane deal that he claimed to ink, as was almost anyone who (a. understands how endorsement deals work (b. understands the value of a hard-earned dollar. Plus it was suspect how the rapper didnât announce what brand the endorsement was actually with. Who wants to say âI just made $400 million!â without the company writing the check being disclosed?
Now we know. This past Friday a company called World Poker Fund Holdings announced that they were the ones behind Soulja Boyâs $400 million not-so-humble brag. In the press release, World Poker Fund Holdings claims that âSoulja Boy will mobilize his network to promote World Poker Fundâs online gaming assets such as CelebrityWorld.com and its soon-to-launch âin-flight gamingâ platform which aims to service the 3 billion plus global travelers across multiple airlines worldwide.â Itâs followed by a dumb canned quote by Soulja that he almost certainly didnât write. Itâs borderline comical:
Soulja Boy, âI invest in things I understand. I enjoy music, and of course gaming. Being an influencer is a form of currency. Having portfolio diversification is critical if you want to be an effective brand ambassador. With regards to World Poker Fund, I believe in its strategy, its team, the vision, and managementâs ability to target its financial goals.â
Cool. Poker on planes. Biz babble about âcurrencyâ and âinfluencersâ written by PR people. Got it.
So who exactly writing this check? When you look at the public financials, World Poker Fund Holdings is barely an operational company, trading at $1.70 a share with a market capitalization of around $52 million. Let me ask as many others have asked: How the hell can a company so small pay someone $400 million?
It canât. Turns out Soulja Boy (or whoever communicated the deal to Soulja Boy) doesnât understand the language of his contract or know how stock compensation deals works.
Forbes unearthed the nuts-and-bolts business of the deal. Company spokesperson Matthew Bird puts it all in perspective, noting that itâs a stock and revenue-sharing deal thatâs capped at $400 million.
âHe really kind of jumped the gunâ by using the $400 million figure, Bird says. âThe deal is capped at $400 million, and itâs based on a forward-thinking valuation of the company. Heâs young, heâs 25 years old. He got really excited, and he tweeted something he probably shouldnât have tweeted. He was getting a lot of pressure from within the entertainment community, so he wanted to put a statement out. Obviously, the companyâs market cap is at $51.8 million. Thereâs no way they could cut a $400 million deal. Endorsement deals are calculated on a lot of different factors. This is not a fully cash transaction.â
SoâĤ If World Poker Fund Holdings becomes one of the most powerful companies in the world, Soulja Boy gets $400 million. Big, big if.
But, back on planet earth, World Poker Fund Holdings has a big hill to climb: The companyâs business model for their bringing poker on planes is attached to some complicated gaming industry licensing with the Iowa Tribe of Oklahoma, according to Forbes;
âItâs based on some legislation that happened over in Oklahoma three weeks ago,â Bird told me. âThey issued a gaming license unlike any other gaming license in the United States, which allows [the tribe]Â to operate through a .gov portal. That .gov portal allows them to be unrestricted worldwide. Countries canât block government-based sites. Hence, it gives them an opportunity to do in-flight gaming, which Party Poker and other casinos have never been able to do.â
While the decision does not give the tribe exclusive rights to the portal, Bird says that the decision âgives this tribe at least a year, maybe a year and a half to get a head start and capture market share.â
They also operated at a $400,000 loss last year, as Forbes points out on their annual disclosure form.
Circling back to Soulja Boy â If it smells like bullshit, itâs probably bullshit. The man isnât collecting $400 million any time soon.
Have to imagine he feels pretty dumb about having to eat crow on that brag. Itâs just reaffirming to know that heâs still as much of a clown as you thought he was when rapped the phrase âsuperman dat ho!â in 2007.
Just a significantly less richer clown.
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