Female Rappers Who Went Broke

So, it's so good to see you and catch up on some things. Cuz I'm a little stressed about my personal life and planning this boot camp. >> You know I filed bankruptcy. These women sold millions of records, filled arenas, [music] and changed rap forever. And then, somehow, the money was just gone. Five female rappers who went completely broke and the role the industry played in making sure that happened. TLC, Lisa "Left Eye" Lopes. TLC is one of the best-selling groups of all time. We are talking over 85 million records sold worldwide. Hits like "Waterfalls", "No Scrubs", and "Creep". Songs that defined an entire era. By every measure, they were one of the biggest acts on the planet. So, it makes absolutely no sense that in July 1995, right in the middle of all that success, TLC filed for Chapter 11 bankruptcy and declared $3.5 million in debt. How does a group that popular end up broke? Left Eye explained it herself. And once you hear the math, everything clicks immediately. This is how a group can sell 10 million records and be broke. And everyone, get ready to boo your math. Okay, there are 100 points on an album. TLC had seven. Every point is equal to 8 cents. All right? [music] 7 * 8 = 56 cents. >> But, as time went on, we burned a lot. >> That means every time an album gets sold, TLC gets 56 cents. So, 10 million records >> [music] >> $5.6 million. Seems like a lot of money. Well, it's not a lot of money when the record company has spent $3 million [music] to record your album. And in the record business, we pay all costs back to the record company. [music] We pay recording costs, video costs. Now, we have $2.6 million left. Well, guess what? When you have that much money, you're in about the 47, 48, 49% tax bracket. So, that immediately gets deducted to $1.3 million. Then, you split the rest three ways. You got about [music] $300,000 each. $300,000 each after selling 10 million records. Their deal with LaFace and Arista buried them in recoupable costs. Videos, studio time, management fees, all of it came out of their share before they ever touched a dollar. It was the kind of contract that looked good on paper to someone who had never signed one before and had nobody in their corner explaining what it actually meant. The bankruptcy forced a full renegotiation of the deal, which was really the only exit they had. Left Eye kept speaking on it right up until her death in a car accident in Honduras in 2002. The remaining members eventually rebuilt, but the damage that one contract did to three women at the absolute height of their careers is not something you just shake off. Da Brat. >> [music] >> Da Brat came out in 1994 with and made history as the first female solo rapper to go platinum. She built a real career out of that momentum, working with Mariah Carey and Jermaine Dupri, and racking up millions over the years. But one night, at an Atlanta nightclub in 2007, set off a chain of events that she is still dealing with long after. She hit a woman with a rum bottle during an altercation, pled guilty to aggravated assault, and went to prison. The criminal conviction was one thing. What came after it was a whole separate problem. The victim filed a civil lawsuit and the judgment against Da Brat grew past $6 million and eventually climbed to around $8 million once interest was added. She talked about it openly on Growing Up Hip Hop Atlanta and what she said cut right to the point. >> a judgment against me that just came paid. I ain't got that kind of money, so. The judgment from the thing I went to jail for, to prison for. I still got a $6 million judgment after the criminal part. Then she came with a civil suit, said she got some kind of brain damage. So, I'm trying to get that taken care of so I can pay her whatever she needs to be paid. I need to move on. Yeah, I got two awesome lawyers. Yes. She deserves something. [music] I hit her, you know? Yeah. But you can't draw water from a dry well. In August 2018, she filed for Chapter 11 bankruptcy listing assets of just over $100,000 against nearly $8 million in liabilities, almost all of it tied to that civil judgment. She had made around $8 million across her entire career, but between the label deals and the legal costs and everything that came along the way, very little of it was actually sitting in an account anywhere when it mattered most. The bankruptcy gave her a structure to keep working while managing the debt. She has since rebuilt through radio and television, but that judgment defined her financial life for a long time. Foxy Brown. Foxy Brown came out in 1996 with Ill Na Na, collaborated with Jay-Z right out of the gate, went platinum, and was immediately one of the most talked about female rappers in the industry. She had a real run at the top. Then, gradually, things started coming apart through a combination of legal trouble, a period of serious hearing loss, and releases that got more and more inconsistent as the years went on. She never filed a formal bankruptcy the way some of the others on this list did, but the financial picture was just as [music] bad. The IRS filed multiple liens against her between 2009 and 2010 totaling around $641,000, and with penalties and interest added on top of that, the total pushed close to a million. What makes that especially bad is that the debt covered unpaid taxes going all the way back to 2003 through 2006, which means the hole had been getting deeper for years before any of it became public. Alongside the tax liens, there were also additional lawsuits over unpaid studio bills and other outstanding debts that kept the pressure on from multiple directions at the same time. The pattern you see with Foxy runs through most of the stories on this list. The money was real when it was coming in, but there was no foundation underneath it, [music] no financial planning, no one in her corner making sure she was protected when things slowed down. Her career cooled off faster than she could adjust to, and by the time the bills came due, the income to cover them simply was not there anymore. Lauryn Hill. Lauryn Hill's story might be the hardest one to sit with on this list. Not because of how far she fell, but because of how high she actually was. [music] The Miseducation of Lauryn Hill sold over 20 million copies worldwide and took home five Grammys. She was not just successful, she was historic. And then she pulled back from all of it, got into a decade-long battle with the industry and the people around her, and stopped filing her taxes in the middle of all of it. In 2012, she pled guilty to three misdemeanor counts of failing to file tax returns for 2005, 2006, and [music] 2007 on somewhere between $1.8 and $2.3 million in income from music, film, and royalties. Her attorney explained in a Bloomberg Law interview what had been going on behind the scenes all those years. The explanation goes all the way back to the the late 1990s when Ms. Hill was uh in 1998, you know, she won five Grammy Awards for her breakout album, The Miseducation of Lauryn Hill. But then got into a a a turmoil uh with the sort of commercialization of the music industry that they were asking her to do things she was uh not prepared to do. Uh it then became a battle, as she put it, for her own survival. And she had to break with the music industry, break with the people around it that were trying to destroy her. Uh and as part of that struggle and turmoil that she engaged in over the next decade, unfortunately, not paying uh and excuse me, not filing her tax returns was part of it. The government pushed for three full years in prison. The judge sentenced her to three months plus three months of home confinement, partly because she had paid back roughly $970,000 before sentencing, which actually went beyond what the case legally required. That helped, [music] but it did not close the chapter. More recently, New Jersey filed two additional tax liens against her totaling nearly $892,000 connected to cash flow problems from a canceled Fugees reunion tour. She has been working through a repayment plan and cooperating with the state, but the financial pressure has been a constant in a career that, at its peak, [music] should have made all of this impossible. Lil' Kim. Lil' Kim is one of the most influential female rappers to ever [music] do it, and that is not an argument. Her debut, Hard Core, went double platinum. The two albums after it both went platinum, and she inspired a whole generation of artists who came up behind her. Nicki Minaj, Cardi B, Megan Thee Stallion, they all point back to Kim in some way. She is a legitimate icon of the art form, which makes it genuinely difficult to process that by 2018, her estimated net worth had fallen to somewhere around $500,000. The financial collapse had multiple entry points. In 2008, her former label sued her for $2.5 million, which blocked her from putting out new music at a time when she needed to be earning and drained her resources through what became a long and expensive [music] legal fight. By 2012, she already owed close to a million dollars in back taxes, and the numbers only kept going up from there. Her income had dropped from around $820,000 a year to roughly $400,000 by 2016, [music] but her spending had not adjusted to match it. She was still putting over $10,000 a month into travel, more than $2,000 a month on wardrobe, and additional money on staff. Something was always going to break. In May 2018, she filed for Chapter 13 bankruptcy in New Jersey reporting around $2.5 million in assets against more than $4 million in liabilities. Those assets were mostly tied up in her Alpine, New Jersey mansion, [music] a 6,000 square foot home she had bought in 2003 for $2.3 million. The debt included nearly $1.85 million in unpaid federal and state taxes going [music] back to 2004, more than $2 million owed on the home loan, and close to $200,000 in legal fees. The house had already been scheduled for auction with a starting bid of $100. She proposed paying $5,500 a month to work her way out. The bankruptcy was eventually dismissed in 2019 after she restructured, and based on available records, she is still [music] in that house in Alpine today, which says something about how hard she fought to hold on to it. Do you think rappers can rise again from the rock bottom? Let me know in the comments section. Click on one of the cards on your screen to see more videos like this. See you in the next one.