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, don’t 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 “Crank That” for a hot second almost a decade ago.
I was skeptical about Soulja Boy’s 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 didn’t announce what brand the endorsement was actually with. Who wants to say “I just made $400 million!” 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 Boy’s $400 million not-so-humble brag. In the press release, World Poker Fund Holdings claims that “Soulja Boy will mobilize his network to promote World Poker Fund’s online gaming assets such as CelebrityWorld.com and its soon-to-launch ‘in-flight gaming‘ platform which aims to service the 3 billion plus global travelers across multiple airlines worldwide.” It’s followed by a dumb canned quote by Soulja that he almost certainly didn’t write. It’s borderline comical:
Soulja Boy, “I 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 management’s ability to target its financial goals.”
Cool. Poker on planes. Biz babble about “currency” and “influencers” 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 can’t. Turns out Soulja Boy (or whoever communicated the deal to Soulja Boy) doesn’t 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 it’s a stock and revenue-sharing deal that’s capped at $400 million.
“He really kind of jumped the gun” by using the $400 million figure, Bird says. “The deal is capped at $400 million, and it’s based on a forward-thinking valuation of the company. He’s young, he’s 25 years old. He got really excited, and he tweeted something he probably shouldn’t have tweeted. He was getting a lot of pressure from within the entertainment community, so he wanted to put a statement out. Obviously, the company’s market cap is at $51.8 million. There’s 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.”
So… 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 company’s 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;
“It’s based on some legislation that happened over in Oklahoma three weeks ago,” Bird told me. “They issued a gaming license unlike any other gaming license in the United States, which allows [the tribe] to operate through a .gov portal. That .gov portal allows them to be unrestricted worldwide. Countries can’t 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.”
While the decision does not give the tribe exclusive rights to the portal, Bird says that the decision “gives this tribe at least a year, maybe a year and a half to get a head start and capture market share.”
They also operated at a $400,000 loss last year, as Forbes points out on their annual disclosure form.
Circling back to Soulja Boy — If it smells like bullshit, it’s probably bullshit. The man isn’t collecting $400 million any time soon.
Have to imagine he feels pretty dumb about having to eat crow on that brag. It’s just reaffirming to know that he’s still as much of a clown as you thought he was when rapped the phrase “superman dat ho!” in 2007.
Just a significantly less richer clown.