Rock legend David Bowie was a financial innovator, too
January 11, 2016 by Sara Sjolin
He was among the first to issue so-called ‘celebrity bonds’
Rock legend David Bowie’s death at the age of 69 has prompted an outpouring of tributes to the late singer-songwriter.
But Bowie’s influence reached beyond the impact of his music, which remained on the cutting edge throughout his 40-plus-year career: He was also a financial innovator.
In 1997 he introduced an unusual marriage between the rock scene and Wall Street: He issued bonds backed by future revenue of the 25 albums he had recorded before 1990, paying a generous 7.9% interest rate over 10 years. The bond issue earned Bowie $55 million, which he reportedly used to buy back songs from his catalog owned by his former manager.
It may have sounded like a good idea on paper, but in March 2004, Moody’s Investors Service cut the Bowie Bonds to just one notch above junk. A spokesperson from the ratings agency said the downgrade “was prompted by lower than expected revenues generated by the assets due to weakness in sales for recorded music,” according to The Telegraph.
The Bowie bond was among the first of several so-called celebrity bonds, pioneered by investment banker David Pullman. Celebrity bonds from other artists, including James Brown and the Isley Brothers followed.
Bowie’s financial adventures didn’t end with the bond issue. In 2000, he launched his own online bank, BowieBanc, in collaboration with USABancshares.com.
Robert Goodale, the singer’s business partner at the time, was excited about the project, saying it opened the door for future ventures: “We wouldn’t rule out ‘Bowie’s Trading Desk,’ if someone came to us with a good proposal,” he said, according to Forbes.
Bowie’s Trading Desk never materialized, and the BowieBanc was short lived.
