Sean "P.Diddy" Combs' Bad Boy Entertainment has entered into a worldwide 50/50 joint venture with Warner Music Group.

NEW YORK -- Sean "P.Diddy" Combs' Bad Boy Entertainment has entered into a worldwide 50/50 joint venture with Warner Music Group.

Sources value the pact at $30 million. The deal gives WMG a joint equity stake in the Bad Boy Records label and its back catalog, which includes material by Combs, Mase and the late Notorious BIG.

Combs tells ELW that under the agreement he will have a buyback option on the label and catalog at a later date.

At Warner, Combs will continue in his role as Bad Boy CEO. The New York-based label will be distributed in the United States through Atlantic, which will also provide marketing and promotional support.

A new P.Diddy album and a Notorious BIG tribute set are expected later this year.

Combs says his interest in WMG was driven by chairman/CEO Edgar Bronfman Jr. and U.S. Recorded Music chairman/CEO Lyor Cohen. "We started talking, and the vision that they have for Warner is a similar vision for what I have for the future of Bad Boy," he says. "They are also at a time where they need something hip hop, urban and specialized."

The move comes as WMG gears up for a $750 million initial public offering. The major label, which last year saw its market share in both rap and R&B slip to less than 10%, has been looking to build its strength in both genres.

"The Bad Boy name has not only stood for hip-hop music for more than a decade, but has evolved into a unique and vital brand," Cohen says in a statement.

In moving to WMG, Combs is buying Bad Boy out of a two-year old distribution pact with Universal Records that was scheduled to run through 2006. The Bad Boy/Universal deal yielded only one notable hit, the "Bad Boys II" soundtrack.

Says Combs, "We had controls in the deal that didn't enable me to overspend and didn't enable them to overspend."

Universal declined comment.