Background
David Bowie was born David Robert Jones on 8 January 1947 in Brixton, London, and died on 10 January 2016, two days after his sixty-ninth birthday and the release of his final album.
Bowie Bonds
In 1997 Bowie did something no musician had done. Working with the banker David Pullman, he securitised the future royalties on the 25 albums he had recorded between 1969 and 1990 – 287 songs – and sold the resulting notes to Prudential Insurance for 55 million dollars, paying a 7.9 per cent coupon over ten years (Billboard, Forbes).
The structure is worth stating plainly, because it is often described loosely: he did not sell his catalogue. He borrowed against it, and the royalties served the debt. Ownership returned to him when the notes matured.
What Happened Next
Moody’s issued its first ever rating on a music royalty securitisation and graded the notes A3, investment grade. In March 2004 – seven years in, not one – it cut them to Baa3, a single notch above junk, citing falling recorded-music sales and a downgrade of the guarantor (Billboard).
The ending is widely reported wrongly, and was reported wrongly on this page until this correction. The bonds did not fail. Every payment was made early or on time, and holders received their 55 million dollars back with the agreed interest when the notes matured in 2007 (Billboard). Bowie sold ten years of income at 1997 prices immediately before the internet reduced what that income would be worth – an excellent trade for him, and one on which his investors were still paid in full.
The idea outlived the instrument. James Brown, Rod Stewart and the Isley Brothers followed with comparable deals (NPR), and the catalogue transactions of the last decade are descendants of it.
How the Estimate Is Calculated
Documented. The 1997 transaction: 55 million dollars, a 7.9 per cent coupon, a ten-year term, Prudential as purchaser, 25 albums and 287 songs, rated and later downgraded by Moody’s (Billboard, CNBC).
Estimated. Five decades of recording, touring and publishing income; and the value of the catalogue at his death, which his estate later sold in a separate transaction.
Not verifiable. His personal holdings at death, which were handled through trusts rather than public probate.
Why this range. The bond deal is the only precisely known figure and it is a loan, not income – counting 55 million as wealth would be double-counting royalties he had already pledged. The range below reflects accumulated earnings at his death.
The arithmetic. Recording, touring and publishing income across five decades, less UK and US tax at top rates and representation; plus the catalogue held at death, which the estate sold separately afterwards. The 55 million dollar bond issue is excluded from the total: it was a loan against royalties he had already earned the right to, and counting both the loan and the royalties would double-count the same money. These are broad assumptions rather than accounting: representation costs affect taxable income rather than sitting alongside it, and a headline marginal rate is not an effective rate across a whole career. The working below indicates scale, not precision.
Estimated Net Worth
$180 Million – $230 Million (at his death in 2016)