Power Moves Only: David Bowie Was Brilliant Always

Growing up, David Bowie was a mythical creature to me.  Raised in a fortified shelter of parochial schools and church, my exposure to his music was limited.  Instead I knew him as Jareth the Goblin King who liked to steal babies and break into song from the confines of his Labyrinth.  Eventually his music caught my attention due to its galactic sound and direction.  But what needs to be logged forever into the hallowed halls of iBankCoin was his success in finance.  David Bowie executed one of most successful leveraged buyouts of [his own] intellectual property in the history of music.

He wanted to own 100% of his music but could not afford to buy out his former manager, the 50% co-owner of his songs.  He turned to the bond market and in the process pioneered the use of intellectual property as collateral.  ‘Bowie Bonds’ were backed by the current and future revenues of the 25 albums he recorded before 1990, in his more heady years.  A portion of the proceeds were used to buy back rights to his content.  A leveraged buy out of his own work, a boss power move.

The bonds performed flawlessly.  They were bought for US$55 million by Prudential Insurance.  The debt was issued with an A3 rating (the 7th highest rating) at an interest rate of 7.9%.  His royalties succeeded in paying back the debt and the interest entirely.  His vast library of early work (287 songs) and the rights to the income from the songs reverted back to the spaceman/fashion/film/music legend.

We lost a rock god, but we’re also saying goodbye to an innovative businessman who possessed incredible foresight and confidence.  RIP Jareth, ruler of the Goblins, your legacy will never fade from my world.