Lessons from the Paul McGuinness school of business
By Arts & Media Correspondent Sinead Crowley
Saturday, June 27th 1987. I’m 13, my jeans are stonewashed and I have a job in the local shop that pays a pound an hour. A customer looks at me sadly.
“Are you not at the concert?”
“Oh, tomorrow,” I tell her. “I’m going tomorrow.”
“Ah that’s grand. All the young people should go to the concert.”
There was no need to specify which gig. U2 took over the country that month.
There were newspaper supplements, radio competitions, features on the television news. The lads were home from America.
Sure, they had brought with them silly hats and twanging accents, but what returned emigrant wasn’t guilty of that from time to time? Time magazine had called them The Band of the Decade, and they were ours.
Four men out in front and the fifth member, back stage, watching his plan come to fruition. Because Paul McGuinness always had a plan. He wanted to find a baby band, one he could nurture, work with and see evolve.
In U2 he found that band and his relationship with them was to last three and a half decades, everything split five ways. He became a force in world music. One of the few managers whose name was known almost as well as the band members’ themselves.
Working in America was key to the Principle Management strategy. Too many Irish acts had gone to London and remained there, or failed.
U2 stayed in Ireland and turned their focus westwards. Their American fan-base became central to their worldwide success, their epic live shows the key to their longevity.
The band became a brand. There was merchandise, live EPs and albums, concert movies.
In 1993 U2 replaced the Rolling Stones as the world’s highest paid act with an estimated $60 million, six album deal, all engineered under McGuinness’s watchful gaze.
They continually aligned themselves with new technology, whether it was the giant screens and live onstage phone calls of the Zoo TV tour or, in later years, the iPod.
And as the years went by, observing the speed at which the industry was changing, McGuinness was vocal on issues such as piracy and the illegal downloading and ‘sharing’ of music, most notably at the industry’s MIDEM event.
Not every business decision was welcomed here.
There was a rare PR misstep when the band moved a portion of its income offshore for tax purposes. It was, no doubt, an astute business move but one that angered many Irish people as the economy stalled.
But the band kept moving and the business decisions kept on being made.
In 2008 U2 signed a 12 year deal with Live Nation to handle worldwide touring, merchandising and the U2.com website.
At the time McGuinness was quoted as saying the biggest part of U2’s business was now their live business. Once again, he knew what he was talking about.
Music is different now. TV talent shows have replaced A&R men in the discovery of new talent and, in an era of downloading tracks and Youtubing performances, it’s not necessary to buy an album to consider yourself a fan.
U2’s last album sold what was, for them, a modest number of copies. However their “360 degree” tour became the most profitable ever, raising more than $700 million in ticket sales.
And now it’s Live Nation who will see the five-piece reduced to a four man band.
If the company takes over Principle Management as expected, the deal could net McGuinness around €22 million. Not a bad gold watch.
And isn’t it fascinating that, in an industry allegedly obsessed with youth and newness, it’s a gang of 50-somethings – Madonna and U2 – that are at the centre of the year’s biggest music deal? Touring acts that know how to fill a stadium and sell tickets.
You can download music but you can’t, as yet, download the live experience.
Paul McGuinness may be stepping aside but U2 will continue under new management, will release another album, and will sell a lot more tickets.
Hopefully they’ll even fill Croke Park a few more times.
Sunday, June 28th, 1987.
80,000 people sing ‘How Long to Sing This Song’, and Ireland realises that you can get there from here, as long as you have a plan.