When Celebrities Become the Suits

It used to be that businessmen wanted to be celebrities. Now it's the celebrities that are getting the business bug.

For rapper-cum-entrepreneur Sean "Diddy" Combs, that means going beyond the merchandising agreements and product endorsements now commonplace for stars, and actually diving into accounting statements and PowerPoint presentations in a new deal with Diageo.

Combs said today that he would be forming a "strategic alliance" with the liquor conglomerate to lead brand management for Ciroc, an ultra-premium vodka that Diageo introduced in July.

Diddy already counts among his business achievements a reality show on MTV, the successful clothing brand Sean John, a pair of fragrances by COTY, and two upscale restaurants—in addition to the music career that started it all.

The synergies between Ciroc and Sean Combs are evident. Combs pegs himself as a "master in the art of celebration," his own personal brand image now having much less to do with hip-hop than it does luxury, indulgence, and entertainment. (Diddy even specified that he was not planning to market the Ciroc brand specifically to the hip-hop community, but to high-end consumers of all kinds.)

In a superpremium vodka market that's getting more crowded with new entrants by the day, Diageo sees in Combs an opportunity to distinguish its brand from the herd, employing the same style of celebrity branding that has been so successful for the fragrance industry.

But Diddy is in a position where he could launch his own, namesake brand for any number of liquors—one might wonder why vodka, and why hasn't launched his own enterprise.

Vodka's attractive because it's lucrative, a $3 billion industry overall with the ultra-premium range as its fastest growing sector. Ciroc itself is one of the few vodkas in the world that is made from grapes, rather than grain or potato, which Diageo has used as a selling point to create a high luxury brand strategy worthy of the Diddy himself.

Plus, Combs had already been stung by the champagne industry, another staple of extravagant entertaining. In July of 2006 a group of rappers, spearheaded by Shawn Carter (aka Jay-Z), boycotted Cristal Champagne after the winemaker made comments about the product's hip-hop clientèle that many in the industry found offensive.

The terms of Diageo's agreement with Diddy call for a 50/50 profit-sharing split on additional sales going forward, and Combs stressed that he planned to be integrally involved in the brand, as corporate point-man on advertising, marketing, events, product placement, and public relations.

That level of business involvement sounds like more than a full-time job, and for someone with quite a few other pokers in the fire. But regardless of how integral Diddy ends up being in day-to-day decisions —the idea of sharing risk and reward with Diageo is a big departure from the structure of a good old fashioned endorsement deal.

by Liz Gunnison

^{Photograph of Sean "Diddy" Combs at his press conference today in New York by Stan Honda//AFP/Getty Images}