Stars and businessmen
Handsome, yes, as Bowie, but especially rich. following the example of handsome David; a handful of artists transformed their career into a cash making machine.
Rock star, actor, fashion icone. David Bowie was also a well advised businessman who knew how to to innovate in the financial world. He is not the only one who has known how to skillfully fructuate his triumph in the pop charts. A tour of the horizon on how to dope one’s fortune thanks to one’s career.
1-Create a Brand name and place music on The Bourse.When an album is a smash hit, propulsing the author into a superstar range, their « value » is multiplied by 10, a hundred, or more. That is enough to make a traders dream. Going from this idea certain artists owners of their own artistic rights have made their name a mark titled in the Bourse, where the share is susceptible to climb or lower in function of their « performances », as with any other firm. Of course, there must be a certain renown to attract investors ; these hoping to have certain guarantees about coming albums.
Kiss and the Beatles tried the adventure with diverse fortunes. If the made up hard rockers touched the jackpot in making an entreprise with property rights, and especially selling deriving products, the Fab Four had less luck. After having created Northen Songs with their manager Brian Epstein, they did not manage to stop the sale of a majority of the shares.
It’s Michael Jackson himself who became the major shareholder in Northen Songs, and in so the Beatles songs before mergering his catalog with Sony underneath the nose of Paul McCartney. If transforming music into shares becomes very profitable better to assure to conserve more than 50% at the future risk of losing control over one’s own catalog.
2-Get a Money Loan thanks to your author’s rights.This method initiated by David Bowie allows to loan a large sum of money even at the end of the career, here where a bank manager would probably have refused. The concept is wily et devishly efficient: if you are an artist with a catalog containing several albums considered classics, you dispose of a regular revenu thanks to royalties from your disc sales. Sooner than wait for money to trickle slowly into your pockets contract a loan creating obligations ; Bowie Bonds for example, then reimbursing thanks to the royalties from albums that have been released well beforehand.
The investor loans money to the artist benifiting in return to an avantaged rate (7.9% for the Bowie Bonds), wheras the payment is assured by the artist’s royalties on past success (no risk if the artist has a flop, and so can no longer pay). The artist immediately disposes of a large sum of money that he can invest elsewhere. Like this David Bowie has known how to contract a loan in 1997 more than $55 million having reimbursed the interests thanks to royalties from albums such as Honky Dory, Heroes or Aladdin Sane.
This system has been successfully imitated by hard rock groups Iron Maiden and James Brown, who managed to loan more than $30 million each others.
King of Pop
3-Buy other authors Catalogs.If authors rights earn you a lot of money but you wish to gain even more, How do you? Of course, you can bring out new songs. But you can also buy the rights and those of others. So you become a mini record house.
Paul McCartney like this owns a part of the Beatles Songs but also those of Buddy Holly, Carl Perkins and many others, which allowed him in the 80’s to earn more than $40 million royalties a year. This clever placement allowed him to become one of the richest artists in the world. But it equally caused him problems.
After having advised in 1982 a young Michael Jackson to invest like this, he didn’t doubt that he would after know such a phenomenal success, to a point enabling him to buy the exploitation rights for songs of the Beatles! McCartney must so pay the « King of Pop » to perform on stage pieces of music he had composed himself. An enraging situation for the bass player of the Liverpool Fab Four, even more so when « MJ » did not hesitate to money the utilisation of Beatles songs in ads as to finance his improbable life style and his law fees.
4-Invest Wisely.The most lucrative method when a successful musician remains to place your money in a domain that has nothing in common but brings in a large ratio, like any other investor. For example the case of Bono, leader of U2, already disposing of a solid gain issuing for his disc sales. But his fortune has climbed more when he invested $56.5 millions with four associates in an investment firm Elevation Partners to acquire, 2.3% shares in a young firm in full development. The name? Facebook, it was in 2009. Six years later, this firm has become a giant of the net and the shares of Elevation Patners represent more than $1.4 billion.
René Angélil, Céline Dion’s husband, deceased last Friday gathered a fortune valued at more than $700 millions CAD, the one hundred and first in Canada in 2013. His first active of course are the sales of 225 millons of discs from Céline Dion, but also her show in Las Vegas: each year, they have earned $114 million economic gain for the town and created 7000 direct or indirect employments. Finally René Angélil has also invested in a chain of restaurants and has bought a restaurant near Montreal. Without forgerting the inumerable participations of Céline Dion in ad campains.
Crédits photo : Pluris, DR