Singer intends to issue bonds

Web posted May 5, 1999

By Kent Kimes
Staff Writer

Papa's got a brand new bag -- of cash.

Following in the footsteps of pop musicians like David Bowie, Ashford and Simpson, and the songwriting team of Holland/Dozier/Holland, James Brown is issuing securitization bonds seeking investors in his body of recorded work.

``James Brown owes his success to the public,'' said the musician's agent, Jeff Allen with Universal Attractions in New York. ``In essence he is sharing the wealth.''

Mr. Brown, who lives in Beech Island, signed on with New York bond whiz David Pullman, who brokered the famous $55 million Bowie Bonds transaction, a $30 million deal with Motown songwriters Holland/Dozier/Holland, and an eight-figure deal with Nicholas Ashford and Valerie Simpson.

While Mr. Brown is allowing outside interests to invest in his intellectual property, the bonds will be placed privately, Mr. Pullman said.

ABCNEWS.com reported that the deal will net Mr. Brown between $35 million and $55 million, a figure Mr. Pullman did not dispute.

But the value of Mr. Brown's bond issue cannot be disclosed yet because it is not finalized, said Mr. Pullman's publicist Lois Najarian. In a typical securitization, a company might take items that have a predictable cash flow, such as mortgages or automobile loans, and combine and pledge them as collateral for a loan or bonds.

But in an entertainment asset-backed securitization bond, artists get advance funds for future earnings of royalties rather than waiting years for them to be calculated and paid.

``It lets an artist get a big chunk up front,'' said Mr. Brown's attorney Buddy Dallas.

Also the deals tie up song rights, which eventually revert to the artist after the bonds are paid off. Mr. Brown owns all his song writing share and publishing, Mr. Pullman said.

``What's appealing about our deals and what caught James Brown's attention is that securitization is clearly a superior way for artists to maintain ownership of their music and not have to sell off their publishing for an infusion of cash,'' he said.

Mr. Brown's 750-plus song catalog, including the No. 1 hits I Got You (I Feel Good), Papa's Got a Brand New Bag, It's a Man's World, Say It Loud -- I'm Black and I'm Proud and Get on the Good Foot -- has created more than $100 million in entertainment assets from the publisher's share, writer's share and record royalties, according to Mr. Pullman.

Dubbed ``the hardest working man in showbiz,'' Mr. Brown maintains a rigorous touring schedule despite his age. He turned 66 on Monday.

Mr. Allen said the bond issue is a way the soul singer can reap the financial rewards of a 40-plus year recording career without letting go of his intellectual property.

Mr. Brown has piled up 98 top 40 R&B singles over a 40-year span, tops for any living recording artist, Mr. Allen said.

``It's time for him to enjoy the fruits of his labor,'' Mr. Allen said. ``This bond issue gives James Brown an opportunity to enjoy financial freedom without having to sell off any part of a musical catalog that has taken a lifetime to create.''

According to Augusta-based New James Brown Enterprises, the entertainer was in town Tuesday filming a music video.

Kent Kimes covers arts and entertainment for The Augusta Chronicle. He can be reached at (706) 823-3626 or feature@augustachronicle.com.