Seinfeld eyes jump onto Bowie bond bandwagon

By RICHARD WILNER

        Jerry Seinfeld’s next big gig may not be on television but in the bond business.  The comedian is believed to be exploring the idea of floating some so-called Bowie Bonds, backed by the millions in royalties he will pocket from the successful syndication of his television series.

        The overwhelming popularity of “Seinfeld” on NBC, which is helping the syndicated nightly broadcasts on WPIX to huge ratings, should help Seinfeld fetch mega-millions in annual royalties well into the next century.  Seinfeld would simply funnel that expected royalty stream into a stand-alone entity, sell it as an asset in the form of bonds and receive the total year’s value of the royalties up-front in cash.

        The securitization of the syndication rights’, royalties, or any intellectual property, is all the talk in Hollywood.  Television producers, authors, rock ‘n’ rollers and even some fashion designers and other creative types are burning up the phone lines to their business agents and ordering them to find out more about the latest rage.  One New York businessman hot and heavily into the royalty stream bond business recently squeezed in 30 such appointments in an already tight schedule during a five day visit to Beverly Hills.

        The new type bonds are known in entertainment circles as Bowie Bonds because rocker David Bowie was the first to issue such bonds.  He floated $55 million in bonds last year, - all snapped up by Prudential Insurance.

        Sensing the soon-to-explode market Bowie’s management team, RZO Companies, recently teamed up with Prudential Investments.  The partnership, Entertainment Finance International LLC, said it hopes to bring in more than $1 billion in Bowie Bonds to the market every year.

        Assets like mortgages, car loans and credit card receivables have been bought and sold for years and make up a lion’s share of the $150 billion asset-backed market.  But the size, influence and financial power of the entertainment business is now more evident than ever as individuals are able to leverage their wealth to diversify their portfolios.  “Bowie wanted to diversify his assets which, quite naturally, were almost entirely invested in himself,” said Joseph Rascoff, of RZO.

        The cash received from the bonds can also help the artist in tax planning, estate planning or just give them some cash to buy that mansion on the hill.  “Our Entertainment Finance International will also allow us to do smaller deals by having a warehouse company to bundle these smaller deals,” Rascoff told The Post.  “Most of the deals out there are smaller than Bowie’s $55 million – probably in the $10 million-to-$20 million range – so we can bundle several smaller deals, share the costs, and bring them tot he market.”

        Rascoff said the partnership with Prudential Investments also guarantees a buyer for the bonds so the deal doesn’t have to be shopped around which can spread about financial information the secretive stars would rather keep to themselves.

        David Pullman of Fahnestock & Co’s newly created Pullman Structured Asset Sales Group, a pioneer in the Bowie Bond business, also believes that the new niches will be sizzling in short order.  Pullman said he doesn’t expect to form an exclusive partnership with an investment group.  He believes having the ability to shop the market will give the deal the best price.

THE NEW YORK POST April 20, 1998