Inside Kurt Cobain's $450M empire

Kurt Cobain of Nirvana, 1993
Jeff Kravitz | FilmMagic | Getty Images

Twenty years ago Saturday, as best the coroner could tell, Nirvana front man Kurt Cobain ended his life with a shotgun at his Seattle home. An electrician found the 27-year-old's body three days later.

Rock stars who die at the height of their fame, however, never truly recede from either the public consciousness or corporate coffers. And despite his anti-hero, anti-corporate persona, the iconic Cobain is not the exception.

Nirvana, the band Cobain formed in Aberdeen, Wash., in the late 1980s, sold 350,000 albums in 2013 as well as 900,000 singles, according to Dave Bakula, senior vice president for industry insights at Nielsen.

With an average price of $10 per album and $1 per single, Nirvana's music sales last year would translate into revenue of $4.4 million.

That's on top of revenue from 72 million online streams at websites like YouTube, about 300,000 radio plays, merchandise, and name and likeness usage deals.

The brand of Kurt Cobain—his estate was recently valued at $450 million—is clearly big business, and could grow as Nirvana is inducted into the Rock and Roll Hall of Fame on April 10.

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Larry Mestel has experienced the power of Cobain's brand firsthand as CEO of Primary Wave, a company that held publishing rights to a large portion of Nirvana's catalog from 2006 until late last year.

"Kurt Cobain was a titan in pop culture," Mestel said. "He is one of a very small handful of artists that I consider the absolute peak of credibility and value when it comes to copyrights and music."

Mestel purchased a stake in the publishing rights of Nirvana's music from Cobain's widow, rocker Courtney Love, in a 2006 deal that has been estimated at more than $50 million. At the time, Love was the primary beneficiary of the publishing rights to Kurt Cobain's estate, which included more than 98 percent of the publishing rights to Nirvana's music.

Mestel and Primary Wave at one point held 50 percent of the publishing rights to Nirvana's music, before divesting their interest as part of a $150 million deal with BMG.

"His catalog has an income stream that has maintained a very steady pace and even growth when most music catalogs have fallen dramatically," Mestel said.

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The economic staying power of Cobain's has long been the cause of infighting between its stakeholders.

In 2010, Love reportedly relinquished rights to Cobain's name and likeness in exchange for a $2.75 million loan from the trust of the couple's only child, Frances Bean Cobain.

Also in 2010, Frances Bean, then 18, took control of her trust fund, representing more than a third of Cobain's estate.

Charles R. Cross, author of several books about Cobain, said that the struggles are not just for economic benefit, but also for the management of Cobain's estate in a way that does justice to his legacy. That includes exercising discretion when it comes to business deals involving the name and likeness of Cobain, and being careful not to "sell out" his image.

In one highly publicized dispute, Love was widely quoted as saying that the memory of Cobain had been "raped" by the use of the band's hit song "Smells Like Teen Spirit" in the 2011 movie "The Muppets." Primary Wave and Nirvana's two surviving members, Dave Grohl and Krist Novoselic, reportedly signed off on the use of the song in the movie.

A new commercial starring Cobain's likeness is also drawing fire. Dutch brewer Bavaria recently released the spot, which features Cobain and other deceased icons, including Elvis Presley, John Lennon and Tupac Shakur, hiding out and drinking beer together in a tropical paradise.

Bavaria's commercial draws a parallel to an early 1990s Diet Coke commercial featuring singer Elton John side-by-side with digitally recreated versions of the deceased stars Louis Armstrong and James Cagney.

One product deal that did receive a seal of approval from Love is a tie-up with Converse, which crafted a special edition Chuck Taylor sneaker featuring Cobain lyrics. Cobain regularly wore Converse sneakers, and was wearing a pair when his body was found on April 8,1994.

Other legends' widows have also had difficulty finding balance as they managed the images of their deceased spouses. Robyn Astaire, widow of iconic actor Fred Astaire, became known for tenaciously protecting the rights to Astaire's films, while at the same time approving the use of Astaire's dancing image in a late 1990s Dirt Devil vacuum cleaner commercial that aired during the Super Bowl.

"The industry of Kurt is still an extremely lucrative industry," Cross said. "The estate still earns millions, and Nirvana is still one of the biggest catalog artists."

Even so, Cobain must still compete for ranking among iconic, high-earning artists who died before their time.

"There is the Beatles, and then there's everybody else," said Primary Wave's Mestel. "Between the Beatles and everybody else, there's Kurt Cobain."

Deceased Beatle John Lennon is reported to have made $12 million last year.

In terms of combined album and single sales in 2013, Nirvana's estimated $4.4 million trails artists such as Michael Jackson ($8.1 million), Jimi Hendrix ($5.8 million) and Bob Marley ($4.9 million), but leads Whitney Houston ($3.7 million), The Doors ($3.3 million), Amy Winehouse ($2 million) and Janis Joplin ($1.7 million), based on data provided by Nielsen.

Regardless of where you rank him, however,Cobain has secured a prominent place in the pantheon of music greats, Cross said.

"There are many people [who] are stars and have fame and sell a lot of records," he said. "But we haven't seen anyone who combines that songwriting genius with that uniqueness of personality."

"I call Kurt the last rock star," Cross said.

—By CNBC's Adam Molon