Show me the money: 'bonds' let film stars collect future earnings

The joke about Hollywood marriages is that A-listers get hitched early in the morning. That way, if it doesn't work out, they haven't wasted the whole day.

It might seem unlikely, therefore, that some stars are hanging on in failing marriages because they cannot afford the lump sum divorce settlement. Yet this is exactly what one billionaire entrepreneur believes and it is why he has come up with a solution that allows stars to mortgage their future movie royalties.

Mark Cuban - who struck gold when he sold his dot.com business and is now the owner of the Dallas Mavericks basketball team - is talking to several celebrities looking for payments of tens of millions of dollars. In return, they will give up rights to some or all of their profit share in blockbuster movies and long-running television shows.

It is an innovative financial wheeze that mirrors the launch in the Nineties of so-called "Bowie bonds" in the music industry, where singers and songwriters were able to cash in now rather than wait for a drip-drip of income over many years.

And it even threatens the delicate power balance between the big studios and their stars. According to some commentators, it could cast Mr Cuban in a new role as attack dog on behalf of actors who think they are not being given a fair share of movie profits.

Michael Sherman, a Hollywood entertainment lawyer, said that one of his clients was already considering the scheme, and that stars could find it attractive for a variety of reasons.

"They might need a big house, or a boat, or to fund a movie, for example. Or it could be for the purpose of valuing something for a divorce or a partnership dissolution or for estate planning."

Under California's divorce laws, which entitle a spouse to 50 per cent of the com-bined fortune, any split will probably be an actor's big-gest single one-time expense. Mr Cuban's new company, Content Partners, will pay out up to $25m (£13m) in return for 50-100 per cent of the artist's profit share from his or her work to date. That profit share, based on box-office receipts, DVD sales and television re-runs, can takes years to calculate.

Mr Cuban sold his basketball-over-the-internet company to Yahoo! for $5.7bn and bought the Dallas Mavericks in 2000. Since then he has become one of the most controversial NBA team-owners in history, racking up more than $1m in fines for criticising the league and its referees.

The idea for Content Partners came after he stumped up a seven-figure sum to fund George Clooney's Oscar-nominated Good Night and Good Luck last year. Clooney could have funded the project more easily if he was able to cash in future profits from his earlier blockbusters. Mr Cuban's scheme is reminiscent of the "Bowie bonds" used in the music industry, but he has been trying to dampen the analogy. Named after David Bowie, who pioneered their use, the lesson from these bonds is that nothing in the entertainment industry is predictable. Bowie raised $55m up-front in 1997 when he parceled out rights to the next 10 years of royalties from his back catalogue.

But illegal downloading and file sharing sent CD sales into a tailspin - and the value of the bonds has followed.

Content Partners will not issue bonds that are tradable among other investors, and Mr Cuban says the company is more like a venture capital firm. It is betting that it can recoup more from studios over ten or more years than it pays upfront to the artist.

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Business Analyst - 12 Month FTC - Entry Level

£23000 - £27000 per annum: Recruitment Genius: A Business Analyst is required ...

Recruitment Genius: Chefs - All Levels

£16000 - £23000 per annum: Recruitment Genius: To succeed, you will need to ha...

Recruitment Genius: Maintenance Engineer

£8 per hour: Recruitment Genius: This is an opportunity to join an award winni...

Recruitment Genius: Telesales Executive & Customer Service - Call Centre Jobs!

£7 - £9 per hour: Recruitment Genius: Are you outgoing? Do you want to work in...

Day In a Page

Isis in Syria: Influential tribal leaders hold secret talks with Western powers and Gulf states over possibility of mobilising against militants

Tribal gathering

Influential clans in Syria have held secret talks with Western powers and Gulf states over the possibility of mobilising against Isis. But they are determined not to be pitted against each other
Gaza, a year on from Operation Protective Edge: A growing population and a compromised and depleted aquifer leaves water in scarce supply for Palestinians

Gaza, a year on from Operation Protective Edge

A growing population and a compromised and depleted aquifer leaves water in scarce supply for Palestinians
10 best trays

Get carried away with 10 best trays

Serve with ceremony on a tray chic carrier
Greece debt crisis: EU 'family' needs to forgive rather than punish an impoverished state

EU 'family' needs to forgive rather than punish an impoverished state

An outbreak of malaria in Greece four years ago helps us understand the crisis, says Robert Fisk
Gaza, a year on from Operation Protective Edge: The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas

Gaza, a year on from Operation Protective Edge

The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas
How to survive electrical storms: What are the chances of being hit by lightning?

Heavy weather

What are the chances of being hit by lightning?
World Bodypainting Festival 2015: Bizarre and brilliant photos celebrate 'the body as art'

World Bodypainting Festival 2015

Bizarre and brilliant photos celebrate 'the body as art'
alt-j: A private jet, a Mercury Prize and Latitude headliners

Don't call us nerds

Craig Mclean meets alt-j - the math-folk act who are flying high
How to find gold: The Californian badlands, digging out crevasses and sifting sludge

How to find gold

Steve Boggan finds himself in the Californian badlands, digging out crevasses and sifting sludge
Singing accents: From Herman's Hermits and David Bowie to Alesha Dixon

Not born in the USA

Lay off Alesha Dixon: songs sound better in US accents, even our national anthem
10 best balsamic vinegars

10 best balsamic vinegars

Drizzle it over salad, enjoy it with ciabatta, marinate vegetables, or use it to add depth to a sauce - this versatile staple is a cook's best friend
Wimbledon 2015: Brief glimpses of the old Venus but Williams sisters' epic wars belong to history

Brief glimpses of the old Venus but Williams sisters' epic wars belong to history

Serena dispatched her elder sister 6-4, 6-3 in eight minutes more than an hour
Greece says 'No': A night of huge celebrations in Athens as voters decisively back Tsipras and his anti-austerity stance in historic referendum

Greece referendum

Greeks say 'No' to austerity and plunge Europe into crisis
Ten years after the 7/7 terror attacks, is Britain an altered state?

7/7 bombings anniversary

Ten years after the terror attacks, is Britain an altered state?
Beautiful evening dresses are some of the loveliest Donatella has created

Versace haute couture review

Beautiful evening dresses are some of the loveliest Donatella has ever created