U2 and Paul McGuinness: the end of the affair
When Paul McGuinness began managing U2, in 1978, they were playing in car parks. This week he announced he would no longer be the ‘fifth member’ of the most successful live band of all time. Why?
Him too: Paul McGuinness (back) with U2 at an Island Records party in 1980. Photograph: L Cohen/WireImage/Getty
Him too: Paul McGuinness in 1991, when he was on the Arts Council, with Dr Colm Ó hEocha, its chairman, and Anthony Cronin, Charles Haughey’s cultural adviser. Photograph: Paddy Whelan
Him too: Paul McGuinness with Bono in 2005. Photograph: Matt Kavanagh
Him too: Paul McGuinness with his wife, Kathy Gilfillan, last year. Photograph: Dave M Benett/Getty
It was music’s Alex Ferguson moment: the guiding hand of a high-achieving corporation standing down after a long and hugely successful tenure. The 35-year relationship between Paul McGuinness and U2, which saw the band go from playing from the back of a van in a Dublin car park to becoming the most successful live touring band of all time, ended rather mutely this week with McGuinness selling his Principle Management company to the concert promoter Live Nation.
As with Ferguson, the 62-year-old is moving upstairs, to become chairman of Principle. Day-to-day management is being taken over by Guy Oseary, who also manages Madonna.
McGuinness made a statement to the New York Times that suggested his age was a factor in the decision. “It could be seen as slightly poor etiquette for a manager to consider retiring before his artist has split, quit or died, but U2 have never subscribed to the rock ’n’ roll code of conduct. As I approach the musically relevant age of 64 I have resolved to take a less hands-on role as the band embark on the next cycle of their extraordinary career.”
Oseary has been in place for a few weeks. McGuinness told the band two years ago that he was considering standing down. After three and a half decades in the rock ’n’ roll trenches and with a new album and world tour ready to go next year, it’s entirely possible that McGuinness decided he had had enough of the long days that managing one of the world’s biggest bands entails.
It was a surprise to some that U2’s official website and Facebook and Twitter accounts had nothing to say about their manager’s departure once news broke on Wednesday that he was standing down.
By the time Weekend Review went to press yesterday the band had made no statement to the media in general, and neither they nor McGuinness had responded to questions from The Irish Times.
Some see the absence of a valedictory statement from the band as bad form. “McGuinness deserves better than this,” says one observer who has had close links with the band for many years. “The failure of the band to issue a statement has not gone unnoticed in the industry.”
This does not necessarily point to strained relations between U2 and their former manager. There has been no official confirmation of the deal by Live Nation, so the band might regard a statement as premature.
“Paul fought, fought and fought again for the band,” says one person who has worked with McGuinness and knows him well personally. “He would be the one up early and still at work late at night, arguing with local police chiefs and mayors about stage times and curfews. He was more than loyal, and he literally kept the band together at times. He’s an absolute gentleman who will defend U2 to the death.”
All one needs to know about what McGuinness did for U2 is to consider that Bruce Springsteen refers to his manager, Jon Landau, as the American Paul McGuinness.
In May 1978 a new band then known as The Hype were playing at Project Arts Centre in Dublin. Even then they had ideas about themselves. Paul Hewson, David Evans, Larry Mullen jnr and Adam Clayton figured they needed a manager to get them a record deal.
McGuinness was in the audience that night and was impressed by the inchoate new-wave noise he heard from the stage. Taking them to the Granary pub next door, where the members of U2 were too young to be served alcohol, he immediately impressed the ambitious, wide-eyed northsiders by telling them how to handle all the money that would inevitably flow in once they had an album in the shops.
He talked sagely about how The Beatles and The Rolling Stones had run into problems by not sharing their income equally between the band’s songwriting and nonsongwriting members. He persuaded them to share everything. “It has stood them in very good stead, because it backs up the democracy of a decision if everyone’s making the same amount of money,” he later said.
He also negotiated an equal 20 per cent of U2’s income for himself. For a long time he was, very unusually, paid as if he were part of the band. “This was reviewed later on. There should always be a division between client and manager,” he has said.
It was the money talk that got him the job, even if the band tried to sack him after two years, when he apparently failed to hire a van for an early UK tour. As Bono tells it, the decision to sack McGuinness was taken over hamburgers at Captain Americas restaurant on Grafton Street, but a young man at the next table who was just starting in the music business interrupted their conversation to vouch for McGuinness’s ability as a manager. So Louis Walsh saved McGuinness’s career.
In the 1980s, when album sales meant everything to a band, McGuinness not only scrutinised the record-company contracts but rewrote them in favour of the band. Traditionally, a label owns a band’s music and can use it how it likes – for greatest-hits packages, for example, or by licensing it for advertisements – but when U2 became stars, in the mid 1980s, McGuinness negotiated, not always delicately, that U2 should retain ownership of all their music. Even The Beatles never had that.
McGuinness also secured the band what is thought to be the highest ever royalty rate on their album sales. It is rumoured to be almost twice what other big bands were getting. Those early hard-fought victories still pay dividends today.
He also made the band, and himself, multimillionaires years before they would have become so from album sales or concert revenue. When their label, Island Records, couldn’t afford to pay them royalties from sales of their 1987 Joshua Tree album, McGuinness negotiated a 10 per cent share of the company in lieu of payment. Two years later, when Island was sold, this 10 per cent yielded £30 million for the band and their manager.
“I like to get my hands on the controls,” he once told this reporter. “Always, in U2, we were determined not to be that corny thing of the whingeing, whining victim artists. Find out what is going on. Get into it. Get the means to defend yourself.”
It is this thorough, combative approach that has made him admired, respected and feared in equal parts in the music industry.
The son of a Liverpudlian Royal Air Force officer and a Co Kerry teacher, McGuinness was educated at Clongowes Wood College, in Co Kildare. At Trinity College Dublin, he didn’t complete his degree but was involved in directing student drama and writing for the college magazine.
He made two life-changing friendships at Trinity: the first with Kathy Gilfillan, who became his wife and is now director of the Lilliput Press publishing company, and the second with the Hot Press journalist Bill Graham. The music magazine was an early U2 evangelist, and when Clayton asked Graham to recommend a manager, the journalist directed him to McGuinness, whom he persuaded to go to that early Project Arts Centre gig.
In the intervening years McGuinness has also been a founder partner of TV3, part-owner of Ardmore Studios, where he once worked after college, and a member of the consortium that won the licence for the Dublin radio station Phantom FM. He has also been a member of the Arts Council.
He is a Shelbourne Hotel bar buddy of Eamon Dunphy, whom he commissioned to write the first U2 biography, Unforgettable Fire, in 1987. Some Irish music journalists who considered themselves close to the band at the time still haven’t got over the shock of Dunphy getting the gig.
In recent years McGuinness has been scathing about technology companies’ role, as he sees it, in enabling copyrighted content to be viewed and listened to free online without compensation for musicians. He was sufficiently alert to the shifting sands of the music industry, after Napster facilitated free downloads, to convince the band to do a “partnership advertisement” for Apple iPods.
McGuinness also negotiated a sponsorship deal with BlackBerry for a tour and organised the first big rock concert streamed live on YouTube, a U2 show at the Pasadena Rose Bowl, in California, in 2009.
As album sales slumped and the touring market soared, McGuinness knew that although people may not pay €10 or more for a new U2 album, they would pay up to €100 for a U2 concert ticket. In 2008 he and U2 signed a 12-year exclusive deal with Live Nation, which now looks after not just their tours but also their merchandising sales and the running of their website, U2.com.
The most recent U2 album, No Line on the Horizon, from 2009, sold just five million copies. The Joshua Tree, released 22 years earlier, sold 25 million copies. But the 360 tour that accompanied No Line on the Horizon grossed €550 million, breaking entertainment-industry records.
Today, sales of the new U2 album, which is due out in March, no longer really matter much. Sales of tickets for their world tour, which is due to begin in June, really do.
McGuinness did all the heavy lifting when the record company mattered, when getting the best deal for album sales made all the financial difference. In economic terms, the management of U2 by a company that specialises in live tours makes perfect sense.
“He changed the nature of music management due to his ferocious protection of the band’s intellectual property,” says McGuinness’s friend Rory Godson, the former journalist who founded Powerscourt Group, a communications consultancy based in London. “Before anyone else he was asserting the rights of the artist. Being the manager and not a creative member of U2, he spelled out that what they did as musicians really mattered,” says Godson.
“He’s a brilliant businessman and has that rare ability to make complicated matters very simple. He can solve a complex problem on the back of a cigarette pack.”
There have been difficulties over the years. U2 were close to losing their record deal after a poor second album, October. Bono and Edge were on the verge of leaving the band in the early 1980s because the rock’n’roll lifestyle conflicted with their Christian beliefs. There was a public falling out with their former accountant, and friend, Ossie Kilkenny. And there have been some unprofitable financial investments along the way.
Much to the band’s surprise, there was considerable public blowback from the move of some of the band’s music publishing income to the Netherlands in 2006. Whatever the views of the individual members on this issue, the band have always maintained collective responsibility with McGuinness, including for the controversial tax decision.
The nearest they have come to a public spat was in 2008, when McGuinness criticised the way Radiohead released one of their albums. Bono wrote to NME magazine, saying: “I wanted to set the record straight on behalf of the members of U2 on comments made to the BBC by our much-loved and valued manager, Paul McGuinness, regarding Radiohead’s decision to make the music of In Rainbows available as a download using the ‘honesty box’ idea for payment. We disagree with Paul’s assessment of Radiohead’s release as ‘having backfired to a certain extent’. We think they were courageous.”
There has been no other concrete evidence of disharmony.
McGuinness’s personal wealth has been estimated at more than €100 million, and he will pick up a significant amount of the £30 million that Live Nation paid this week for both Principle Management and Maverick, Madonna’s management company.
Those who have worked with him and know him say that, having done all the important contractual work and being acutely aware of the enormous energy that a new album and world tour will exact, he has decided to hand over the reins.
The music industry has changed immeasurably since he made those early lucrative deals, and in his New York Times statement McGuinness acknowledged that it is now time for a younger man. “I have long regarded Guy Oseary as the best manager of his generation, and there is no one else I would have considered to take over the day-to-day running of our business.”
How U2 react to losing him on a day-to-day basis remains to be seen. In the early days he was closest to Clayton, as they used to room together on tour, but relationships within the band are always changing.
So what next for McGuinness? “Outside the band he has a vast array of personal interests,” says Godson. “He’s interested in art, literature and investing. Just in the past few years he found his father’s wartime logbook, and this enthralled him.”
But he is a businessman at heart. Whatever McGuinness does next, he will stay true to what he told U2 all those years ago in the Granary Bar: “It is pathetic to be good at what you do if you’re bad at the business of it.”