David Bowie has introduced pop investment, but will others follow in his footsteps, asks Neil Spencer
The days when David Bowie represented the cutting edge of modern pop may lie back in the Seventies, but the 50-year-old Bowie proved he’s still an innovative force in the business of music when he invented the pop star as stock exchange investment.
The issue of “Bowie Bonds” on Wall Street raised a handy 34-million for Bowie and his business partners, and became the first financial deal to use future song royalties as security. Snapped up by institutional investors, the Bowie bonds will pay their holders 7,9% a year; substantially more than, say, a long-term building society account, and, reckons Wall Street, just as secure given the earning power of Bowie standards like Let’s Dance and Jean Genie.
Where Dave dances, others may follow. That Bowie’s New York business manager, Bill Zysblat, also handles the Rolling Stones has not escaped notice. Add to that Mick Jagger’s financial shrewdness — a London School of Economics alumni, his affairs are handled by Prince Rupert of Loewenstein — – and a Sticky Fingers gilt might seem inevitable. Talk of a Stones stock market flotation, though, turns out to be a dirty rumour.
“Absolutely no chance,” says the band’s publicist Bernard Docherty, “Mick went potty when he read about it. Keith Richards on Wall Street? Forget it. In any case, they don’t need to issue bonds — Voodoo Lounge [the last album] sold eight million copies.”
Financial need, or rather lack of it, remains the prime reason why most members of the rockocracy are unlikely to follow Bowie’s lead. Most of pop’s bankable names already have more dosh than they know what to do with.
Bowie might not have to count the coppers, but he’s not in the same fiscal league as fellow fiftysomethings Elton John (worth about 140-million) and Eric Clapton (60- million) for the simple reason that his records don’t shift in mega quantities.
Put simply, any act that can still generate millions of record sales has no need to issue bonds; they can borrow money from a record company without the tiresome need to pay interest.
The success of George Michael’s comeback album, Older, has already vindicated the decision by Stephen Spielberg’s Dreamworks label to buy the stubbled one out of his sour Sony deal for $40-million, with a further $25-million to Michael himself. A proven back catalogue helps; a substantial part of the huge $80-million advance splashed out by Warner Brothers to REM last year was for future royalties on the group’s old albums.
Acts looking to add gilts to gold records, then, are likely to be past their commercial prime, but with a bulging portfolio of classic songs with a future life as lift music, film soundtracks and advertising jingles.
Anyone who thinks they’re hard enough to take on the suits down at the stock exchange, though, is welcome to have a go.
Below is a list of the rock market and who the floaters and sinkers would be.
U2
As the most successful group, with one of the hardest-nosed managers in the business, U2 are collectively worth around 300- million and are more interested in artistic credibility than more cash, though they might want to expand their grip on the Irish economy. The Bono Bond, a surefire winner, could raise up to 75-million.
Michael Jackson
The self-styled King of Pop’s crown is so tarnished he might find a Jacko Bond an issue too far, even for him. Staggeringly wealthy, his 1993 advance from Sony was said to be over 600-million.
But a Jacko Bond would raise only around 75-million. A notoriously tough businessman, he might prefer to issue a bond to capitalise on his ownership of the Beatles songbook.
The Beatles
Paul McCartney, whose 420-million fortune makes him the UK’s 30th-richest person, has little need of funds, especially since he, George Harrison (95-million) and Ringo Starr (80-million), have made a financial killing with the Beatles’ Anthology.
Yet if a bond based on future royalties to the Lennon and McCartney catalogue were to be issued by Jackson, it could raise up to 250-million.
Madonna
No longer shifts units in the quantities of her heyday, and never a profligate tunesmith. Would probably fare better selling future royalties to her holographic image than to her songs. Nonetheless the Ciccione Bond could raise 50-million.
Oasis
Too early in their growing career to cash in on their modest two-album roster, whose abundance of instant classics could nonetheless make a Noel Bond a 15-million winner.
Elvis Costello
A prodigious songwriter with an enviable catalogue, his critical garlands aren’t matched by hard record sales. A lack of cover versions means an EC Bond would raise a modest 3-million.