Despite Decline in Profits, Top Hip Hop Artists Cash In On Endorsements

After attending the NBA Draft in June, Jay-Z threw a party at his 40/40 Club in midtown Manhattan, carousing into the wee hours of the morning with the likes of LeBron James and Spike Lee. Not bad for a guy who took a 57% pay cut this year.

The Brooklyn-born rapper pulled in an estimated $35 million over the past 12 months, topping our annual list of Hip-Hop Cash Kings. It's far from the $82 million he made last year, but more than enough to reclaim the crown from 2008's monarch, 50 Cent. The Queens native drops to fourth place with $20 million, down from $150 million a year ago.

Click here to learn more about Hip-Hop's top earners at our partner site, Forbes.com.

Both rappers had a hard time living up to prior yearly totals fattened by one-time mega-deals. For 50, it was a $100 million windfall from the sale of his stake in VitaminWater parent Glacéau to Coca-Cola; for Jay-Z, a front-loaded $150 million deal with concert promoter Live Nation.

"The timing of Jay's deal couldn't have been more perfect," says singer-songwriter-producer Akon, fourth on this year's list. "Those numbers aren't going to be flying around anymore."

Last year, the top 20 Hip-Hop Cash Kings made $500 million; this year they made $300 million, a 40% drop. 50 Cent's VitaminWater stake was responsible for one-fifth of the total take last year. Its absence accounts for half of hip-hop's year-over-year decline. Similarly, concert promoters have stopped pursing big "360" deals like the one signed by Jay-Z and LiveNation last year. "Those deals are pretty much done for now," says Chris White, an entertainment analyst at Wedbush Morgan Securities.

The Forbes Hip-Hop Cash Kings list includes male recording artists whose work is primarily classified as hip-hop or rap. Their female counterparts can be found on our Cash Queens of Music list. Earnings estimates, which include income from record sales, digital downloads, touring, films, TV shows, endorsements, books and other entertainment ventures, are calculated between June 2008 and June 2009. Management, agent and attorney fees are not deducted.

In order to determine our list, we interviewed numerous sources within the music industry--including lawyers, media buyers and many of the artists themselves. We also conducted research via Billboard, Pollstar, Nielsen SoundScan and the Recording Industry Association of America, among others.

The diversified Diddy ranks second on our list with $30 million, down $5 million from last year, bringing in cash from clothing line Sean John, record label Bad Boy and reality TV shows Making the Band and Run's House. Kanye West rounds out the top three at $25 million, also $5 million less than last year, thanks in part to revenues from the tail-end of his "Glow in the Dark" tour and solid sales of his fourth album, 808s and Heartbreak. The self-proclaimed Louis Vuitton don moonlights as a shoe designer, recently crafting a successful limited-run Nike line called the Air Yeezy; another for Vuitton is due out this summer.

Akon and Lil Wayne are among a select few who actually made more this year than last. The Senegalese crooner and dreadlocked rapper pulled in $20 million and $18 million, respectively, on the strength of frenetic touring schedules and lucrative collaborations.

One area where hip-hop continues to thrive is in the licensing and endorsement business. Jay-Z earned an estimated $1 million for the Budweiser ad campaign featuring his song "Show Me What You Got." Fellow rapper Common augmented his earnings by plugging Ford's Lincoln Navigator; Diddy by shilling Ciroc vodka.

"Despite the economy, hip-hop is just as powerful as it's ever been in the endorsement and licensing world," says Ryan Schinman, chief of Platinum Rye, the world's largest buyer of music and talent for corporations. "Tween stars and rock legends are very reliable, but the impact of hip-hop on pop-culture and fashion continues to lead the charge."

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