Bowie Bonds

Generali

http://www.theatlantic.com/business/archive/2016/01/david-bowie-bonds-banking/423627/

David Bowie's back catalogue was the first of several, including the Isley Brothers, James Brown and ultimately the mighty EMI's to be securitised.

It's worth noting that every penny under the structure of the bond was repaid to investors prior to the bond being would up.

Interestingly Mr Bowie's record company, that so often seemed to have had the whip hand in financial negotiations with artists, didn't fare so well. The securitisation that was used to take over EMI was rather more of a flop and the company ended up being owned by Citibank.

chucknorris

Generali wrote: »

http://www.theatlantic.com/business/archive/2016/01/david-bowie-bonds-banking/423627/

David Bowie's back catalogue was the first of several, including the Isley Brothers, James Brown and ultimately the mighty EMI's to be securitised.

It's worth noting that every penny under the structure of the bond was repaid to investors prior to the bond being would up.

Interestingly Mr Bowie's record company, that so often seemed to have had the whip hand in financial negotiations with artists, didn't fare so well. The securitisation that was used to take over EMI was rather more of a flop and the company ended up being owned by Citibank.

Obviously he was quite innovative, I found this bit the most interesting:

Bowie didn’t choose to sell his royalties because he was in dire financial straits, but instead because he predicted a vast shift in the way the world consumed and sold music. In a 2002 interview, Bowie told The New York Times, “The absolute transformation of everything that we ever thought about music will take place within 10 years, and nothing is going to be able to stop it. I see absolutely no point in pretending that it’s not going to happen. I’m fully confident that copyright, for instance, will no longer exist in 10 years, and authorship and intellectual property is in for such a bashing.” He noted that in the interim, artists should take advantage of the ability to control the distribution of their music, and to make some money off of it.

Initially Bowie bonds were given a solid investment-grade rating by Moody’s, but in 2004, as album sales dipped around the world, the bonds were downgraded to the level right above junk status. Still, after 10 years, the bond had been repaid to investors in full, and other famous creative securitizations have followed, including those built on the work of James Brown and Rod Stewart, and on the comic strip “Peanuts.”

princeofpounds

Given the change in credit rating, it was probably a good move for him.


What I'm not sure about, though, is who originally had the idea. Was it really him, or more about him picking up on the idea from an advisor?

Graham_Devon

princeofpounds wrote: »

Given the change in credit rating, it was probably a good move for him.


What I'm not sure about, though, is who originally had the idea. Was it really him, or more about him picking up on the idea from an advisor?

It was Bowie and 2 others. Other sources (Wikipedia, Financial Times) put David Pullman as the mastermind of the scheme.

In the mid-1990s, David Bowie, his financial manager Bill Zysblat, and banker David Pullman came up with a new scheme to generate cash from Bowie's extensive back catalogue.

Generali

AIUI, Mr Stardust was trying to sell his back catalogue and his manager came to him with an idea from Mr Pullman.

chucknorris

Generali wrote: »

AIUI, Mr Stardust was trying to sell his back catalogue and his manager came to him with an idea from Mr Pullman.

it was good to hear that he was thinking outside the box, I wasn't particularly a fan of his (although I did like some of his music). Nevertheless it was sad that he died so young, I wasn't aware of his condition, a reminder to us all of how fragile life can be.

padington

Irony of the digital world is that it has somehow financially wrecked the intangible ( music, stories, middlemen ) and financially knighted the things that very much exist in the real world ( houses, classic cars, visual art).

Bowie saw it coming and made the trade early.

the_flying_pig

it was quite interesting.


he also had a dial-up ISP no?