Edward Helmore
Dreams of riches from entertainment bonds, to be secured against future royalty earnings, seem to be turning to dust.
Japanese investment house Nomura Securities has closed the entertainment securities division in which it put so much hope. Its flamboyant head, Ethan Penner, has been fired. His partner in the scheme, former Eagles manager and record producer Irving Azoff, is suing Nomura on the grounds that it misled him.
Two years ago older rock stars were getting dizzy with expectations from the bonds. David Bowie, after all, had raised $55-million. Nomura said the value of the business could reach $1- billion as property rights were harvested and star-struck investors bought a part of the idols’ legacy. But none of the stars named as likely clients ever signed up.
So what went wrong? For most artists it was simply that the maths didn’t add up. Assessing the value of individual songwriting royalties, often riddled with conflicting ownership claims, was too much work for the investment houses, and rarely enough to interest big investors.
Said Cliff Burnstein of Q Prime, the management firm that represents Madonna and Courtney Love: “I’ve never been able to figure out why it would be worthwhile.”
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