The Prince Who Built the Rolling Stones' Financial Empire

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Laurie Dieffembacq/Belga Photos/Getty ImagesMick Jagger of the Rolling Stones
In the summer of 1968, the Rolling Stones were in financial trouble. Between an onerous (some would say unethical) contract with manager Allan Klein and a set of draconian U.K. tax laws, there was a real possibility that -- like some of their contemporaries -- they would be forced to pack it in. What they needed was a white knight. Instead, they got a prince.

Rupert Louis Ferdinand Frederick Constantine Lofredo Leopold Herbert Maximilian Hubert John Henry zu Loewenstein-Wertheim-Freudenberg was technically a count, but everyone referred to him as "prince." Born to aristocratic parents, Lowenstein studied at Oxford and after school worked his way up through London's financial industry, first as a stockbroker, and then a financier when he and a group of investors bought the venerable bank Leopold Joseph & Sons in 1963.

The Stones? Who Are They?

Loewenstein was introduced to Mick Jagger by Christopher Gibbs, a London art-dealer and mutual friend, who thought the prince could help clean up the Stones' finances and extricate them from Klein's clutches. Though not familiar with him nor his band -- he had to ask his wife, who was younger and more in-tune with the music scene, who they were -- he immediately took a liking to Jagger.

Getty ImagesRupert Loewenstein
"I realized there was something exceptional in his makeup, that his personality was able to convert his trade as itinerant performer into something far more intriguing," Loewenstein wrote in his 2013 autobiography "A Prince Among Stones."

The first order of business was avoiding England's punitive tax structure, which levied a rate of 83 percent on its top earners and as much as 98 percent on investments. Loewenstein accomplished convinced the Stones to relocate to the South of France -– where they recorded "Exile on Main Street" -- in effect becoming "non-residents" for tax purposes.

Keeping taxes down was a consistent theme during his tenure, by channelling the group's earnings through Dutch-chartered companies and encouraging the band to rehearse in Canada, rather than the U.S. He reduced the band's tax rate on hundreds of millions of dollars of earnings to just 1.6 percent.

Getting Rid of the New Jersey Businessman

The second order of business was unravelling the relationship with Klein, a hard-nosed New Jersey businessman, whom Jagger suspected was not paying them everything they were due. Through a series of tense negotiations, Lowenstein got the Stones released, but not without granting Klein the rights to all their music recorded before 1971, something Keith Richards described as "the price of an education."

With their new-found freedom, he was able to move them from Decca to Atlantic Records, where they could get major distribution, and began to maximize the group's touring revenue by enlisting sponsors and advertising deals. He also copyrighted the infamous red tongue and lips logo, which helped make the band an international brand.

In Keith Richards' book "Life," he describes what Loewenstein's moves meant. "On a fifty-dollar ticket, up till then, [the band got] three dollars. He set up sponsorship and clawed back merchandising deals. He cleaned out the scams and fiddles, or most of them. He made us viable."

Close in Body, but Not in Musical Tastes or Lifestyle

And for 39 years, "Rupie the groupie," as he was affectionately called in the Stones' camp, was present on every tour, always right next to the "glimmer twins," Mick and Keith.

Ironically, Prince Rupert was never a fan of the music produced by his star clients, nor their lifestyles, preferring Mozart to Mick, and a "good vintage wine" to Jack Daniels or cocaine.

Loewenstein's last bit of financial advice before parting ways with the band in 2008 was to sell their assets and massive back catalog for a tremendous amount of money and wind down their touring and recording careers. This was one bit of advice that the Stones did not take.

The Lund Loop is a free once-weekly curated slice of what I am writing, reading and hearing about in finance, tech, music, pop culture, humor and the good life. But not sports or knitting ... ever!

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