David Bowie’s artistic prowess is well-known and praised the world over, however few people know of his financial genius.
Bowie was the first person to broker bonds –dubbed“Bowie Bonds”– serviced upon royalties from albums he released between 1969 to 1990.
Selling assets backed by expected future revenues was unheard of until Bowie developed the idea of securitising (or turning into something tradable) his royalities.
His investment model has since been adopted by other musicians and by professionals in other sectors.
Not only have artists like Rod Stewart and James Brown issued similar bonds, but sports athletes have also securitised royalities from sponsorship deals.
In 2013, a Fantex Holdings produced a security allowing investors to purchase a share of an athlete’s future income for an upfront fee – which are similar in principle to Bowie’s bonds from decades earlier.
Bowie developed these bonds in 1997 with the help of investment banker to the stars David Pullman.
Pay up! David Bowie developed the very first futures backed security bond backed by his own royalties. (Source: Imgur) Source: Imgur
Prudential Financial Inc. later purchased the bonds for around AU$78 million.
Since the bonds paid interest, the bonds were considered loans, which allowed the money Bowie made off them to be tax free.
With the advent of the music piracy era, Bowie’s bonds lost most of their value by 2004, but were successfully paid off by 2007.
To this day, bonds issued by artists or sponsored athletes are called “Bowie Bonds”, in honour of the musician and financial revolutionary.
David Bowie passed away last night after a long battle with bowel cancer.
Three days before his death, Bowie released his 25th studio album called ‘Blackstar’.
His music producers have said his latest album was "a parting gift to the world".
David Bowie - Pioneer. Innovator. Financial badass. (Source: uproxx.com) Source: Uproxx
