U2 Money Machine Cranks Into High Gear
Wednesday November 21 5:03 AM ET
dailynews.yahoo.com
By Kevin Smith
DUBLIN (Reuters) - They started out as post-punk pub rockers playing for spare change in dingy Dublin clubs and became one of the mightiest money machines in pop history.
U2, fronted by the flamboyant Bono, are estimated to have pocketed upwards of $575 million in the quarter century since their first release, with 2001 on target to be one of their highest earning periods to date.
Their 10th album, ``All That You Can't Leave Behind,'' has shifted nearly 10 million units since shooting to number one in 32 countries after its release late last year, and the accompanying ``Elevation'' tour has smashed box-office records.
Some 80,000 tickets for the first of two Irish gigs last summer reportedly sold out in just 90 minutes. Analysts predict that by the time the tour ends next month worldwide ticket sales will be pushing $141.8 million, with more than half of that generated in the United States.
Overall earnings for the year could top $283.7 million.
``There are several reasons why this latest album and tour are making a lot of money,'' said Niall Stokes, editor of Ireland's leading music magazine Hot Press.
``First, this album appeals to the U.S. audience much more than the previous one, and secondly they've stripped back the touring show so it's much cheaper to run.''
He said a key factor in the band's success -- with worldwide album sales of 100 million to date -- was a remarkable degree of mutual tolerance among its members.
``These guys grew up together and have managed to retain the chemistry that made them unique, where a lot of others would have imploded,'' he said.
MCGUINNESS IS GOOD FOR U2
Crucial to maximizing the pay-off from that chemistry has been the money-spinning savvy of manager Paul McGuinness, who has shared equally in their wealth while making cash from his own deals -- notably through stakes in Ireland's TV3 television channel and in Irish folk-dance spectacular, ``Riverdance.''
McGuinness, 50, discovered U2 playing in a community arts center behind Dublin's Clarence Hotel, which the group now own and have transformed into a chic Dublin watering hole -- part of a $496.4 million business empire that includes bars, nightclubs, and media companies.
Known in the industry as a dedicated hardball player with a tendency to stay aloof -- he did not respond to numerous Reuters requests for an interview -- McGuinness obscures the true worth of his principal clients by funneling their earnings through a maze of limited companies.
Not everything he touches turns to gold, however.
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Misfires include reportedly spending millions on plans to introduce the laser combat game Quasar into Germany before discovering replica guns were banned there, and losing chunky sums on a now-defunct music company, Mother Records.
``He's a tough negotiator -- if you sit down at the table with him, make sure you keep hold of your shirt,'' said a Dublin business acquaintance who asked not to be named.
``He's backed a few donkeys in his time, but his track record with U2 is awesome.''
BEAUTIFUL PAY
Another boost to U2's wealth has been the band's tax-free status in the Irish republic under a scheme introduced in the 1960s to exempt the earnings of artists whose work is generally recognized as having ``cultural or artistic merit.''
In terms of U2's cultural export value, and the extent to which it has raised Ireland's profile around the globe, the government must consider this money well spent.
Early on, the band negotiated a unique high-royalty deal with their label, Island Records, and took 10 percent equity instead of earnings on ``The Joshua Tree'' album which paid millions when the company was bought out by PolyGram in 1989.
Unlike most acts, they also own the copyright to all their songs, a perk which brings in another $9.9 million a year from play on radio stations, for example, and will yield royalties for 75 years after the last band member's death.
For Bono, 41, real name Paul Hewson, fame and fortune have also provided an opportunity to give something back.
A veteran of fellow-Irishman Bob Geldof's 1985 Live Aid concert and a committed Christian, he has devoted considerable time recently to Jubilee 2000, a campaign aimed at persuading Western governments to write off Third World debt.
Lauded by some for his humanitarian commitment, Bono has been derided by others for egotistical posturing, prompting one critic in a prominent British newspaper to comment: ``If Bono really feels for the starving of Africa he should shut up and write a very large check to Oxfam.''
There's no question that Bono, who lives in an $8.9 million mansion complete with heli-pad outside Dublin, and owns properties in New York and France, could afford it.
By the end of the year, some analysts predict, each U2 member could gross nearly $71 million, out-earning the $53.9 million apiece trousered by aging rockers The Rolling Stones last year, and smashing the $56.7 million record set in 1996 by pop colossus Elton John.
That should be enough to elevate anyone's spirits. |
