Diageo vs Diddy spat exposes risks of celebrity deals

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Diageo entered into a profit-sharing arrangement with US rapper and entrepreneur Sean Combs, also known as Diddy, when celebrity partnerships were still rare.

Article originally published by The Financial Times. Hargreaves Lansdown is not responsible for its content or accuracy and may not share the author's views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest.

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04 Aug 2023

In 2007, US sales of Diageo’s premium vodka, Cîroc, were lagging. In an attempt to boost its relevance, the London-listed drinks giant made the surprise move of signing the rapper to take charge of the brand’s marketing.

Cîroc flew off shelves under Combs’s direction and by 2010 became the fastest-growing brand in the US, rivalling premium vodka labels owned by Pernod Ricard and LVMH.

“I hit the club, ordered some Grey Goose, switched it for Cîroc to give Puff’s stock a boost,” sang Jay-Z in his and Kanye West’s 2011 track “Primetime”.

Sixteen years later the relationship between the two sides has descended into acrimony, with the musician and conglomerate poised to enter a bitter legal battle over the terms of their partnership. The subject of the dispute is their joint venture, DeLeón, a premium tequila brand the two sides acquired in 2014.

The case comes as a warning shot to