'Bowie bonds' - the singer's financial innovation (2024)

FAQs

'Bowie bonds' - the singer's financial innovation? ›

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. In 1997 Bowie sold asset-backed securities

In 1997, Bowie sold bonds worth $55 million, backed by the royalties from his catalog of songs. These bonds had an interest rate of 7.9% and were due to mature in 10 years. Over the course of their lifespan, the catalog continued to generate steady income, resulting in a profitable return for the bondholders.

David Bowie used the proceeds from the bond sale to purchase old recordings of his music owned by his former manager. His rights to royalties from wholesale sales in the U.S. were securitized into bonds. In effect, by creating the bonds, he ultimately forfeited royalties for the life of the bond.

He blurred genres, with an undeniable influence across the spectrum of Western music. Through his musical mashups, he influenced more modern musical genres than any other rock star, living or dead. Surprisingly, Bowie started his musical career in folk, with his self-titled debut album David Bowie (1967).

The bonds have been retired. And Mr. Bowie's estate is now once again the sole owner of his music and its royalties.

The Bowie Bonds eventually fell victim to the economic problems plaguing the music industry. As CDs were replaced by MP3s and online streaming services, Moody's downgraded the investments and artists would struggle to replicate Bowie's initial success.

By forfeiting ten years worth of royalties, Bowie was able to receive a payment of US$55 million up front; Bowie used this income to buy songs owned by his former manager. Bowie's combined catalog of albums covered by this agreement sold more than 1 million copies annually at the time of the agreement.

Quietly, Bowie had made funeral arrangements for a direct cremation in advance and was cremated in secret shortly after his death as he wanted to “go without any fuss”.

Stability and Returns: One of the key attractions of Bowie Bonds was their reliable and consistent returns. The bonds offered a fixed interest rate of 7.9% over a ten-year period, which was considered quite attractive compared to other investment options available at the time.

In the second half of the 1970s, Bowie's addiction caused numerous slips as he repeatedly tried to get clean. During this period, he experienced guilt, shame and bouts of deep depression, thought to be caused in part by the side effects of cocaine withdrawal.

Why was David Bowie innovative? ›

Bowie did not rely on his own genius, he constantly sought fresh stimuli by collaborating with different people. Most collaborations led to innovations in style and musical direction. He could easily have cruised along simply recycling his early hits. Instead he kept looking for fresh ideas.

He even had invented a new language for his 1977 song, Subterraneans. In 1996, he pioneered the Internet-only release of a song, Telling Lies. A year later, he went further; Bowie launched his own Internet service, Bowienet, the first music artist to become an Internet Service Provider (ISP).

He is regarded as one of the most influential musicians of the 20th century. Bowie was acclaimed by critics and musicians, particularly for his innovative work during the 1970s. His career was marked by reinvention and visual presentation, and his music and stagecraft had a significant impact on popular music.

David Bowie: Singer's estate sells rights to his entire body of work to WCM.

High-quality bond investments remain attractive. With yields on investment-grade-rated¹ bonds still near 15-year highs,² we believe investors should continue to consider intermediate- and longer-term bonds to lock in those high yields.

A new music investing startup called JKBX lets fans share in their favorite musicians' success by allowing people to buy securities whose value derives from an artist's streaming royalties.

In his will, Bowie left half of his assets to his surviving wife, and the remaining half split equally to his children. He also left $2 million to an assistant and $1 million to a nanny.

A bond is a loan that the bond purchaser, or bondholder, makes to the bond issuer. Governments, corporations and municipalities issue bonds when they need capital. An investor who buys a government bond is lending the government money. If an investor buys a corporate bond, the investor is lending the corporation money.

In return for buying the bonds, the investor – or bondholder– receives periodic interest payments known as coupons. The coupon payments, which may be made quarterly, twice yearly or annually, are expected to provide regular, predictable income to the investor..