A series of concerts in the MSG Sphere will bring rich rewards for one of the most financially savvy acts in rock music history. John Meagher on how U2 accumulated their enormous wealth
They are set to be the most lucrative U2 shows ever, pulling in more revenue than their massive concerts at Croke Park and Slane Castle.
When the Dubliners — minus drummer Larry Mullen — officially open the world’s most technically advanced entertainment venue, the MSG Sphere in Las Vegas, this autumn, their formidable money-making acumen, as well as their artistic endeavours, will be scrutinised by a music industry in a constant state of flux.
U2 have long kept a close grip of their financial affairs — they are considered to be among the most commercially savvy bands of all time — but it has been reported that they will be paid $10m upfront to play Las Vegas, plus a remarkable 90pc of earnings from ticket sales.
James Dolan, the billionaire owner of the New York Knicks basketball team and Manhattan’s famed Madison Square Garden, is the brains behind the 17,500-seat MSG Sphere and it was he, reportedly, who signed off on the eye-catching U2 deal.
According to the New York Post, which broke the story, there will be 12 shows in total, with the first of them likely to happen at the end of September after the giant, ball-shaped venue is finally completed. With anxiety among investors at the ballooning cost of the $2.2bn arena amid difficulty in attracting corporate sponsors, Dolan will be hoping that U2 can deliver the sort of spectacular live set that will be the talk of the showbiz world.
With 175 million album sales behind them and a reputation as one of rock’s great boundary-pushing live acts, Bono, the Edge and Adam Clayton will be determined for the Las Vegas adventure to demonstrate that they are still firing on all cylinders, creatively.
The residency in Sin City will add significant sums to their collective coffers. Thanks to the business nous of former manager Paul McGuinness, they struck some of the most advantageous and financially savvy deals of any of their contemporaries, and their acute sense of their own value has ensured that they command top dollar every time.
U2 remain second on The Sunday Times Music Rich List for UK and Ireland, with an estimated wealth of just over €700m. Only Paul McCartney has made more money — and he has not, as yet, taken his chances in the neon lights and 24/7 casinos of Nevada’s desert city.
Sometimes, though, things go wrong even in the meticulously oiled cogs of U2. Back in 2011, Bono and The Edge had spent the best part of a decade obsessing over a musical that would light up Broadway.
On paper, it seemed as though Spider-Man: Turn Off the Dark would be a huge success: it had the biggest budget of any musical to open in New York, a galaxy of the finest theatrical talent were behind it, and the music and lyrics were courtesy of the creative heart of U2.
The smart money was on it becoming the next Wicked or The Phantom of the Opera. But even before it opened in June 2011, the production was beset with problems, including injuries to performers and stage crew. Its opening was pushed back and back and when The New York Times critic finally got to see a preview, the review was scathing: “The songs by Bono and The Edge are rarely allowed to take full, attention-capturing form. Mostly they blur into a sustained electronic twang of varying volume, increasing and decreasing in intensity, like a persistent headache.”
The Dublin duo must have felt as though they were experiencing a never-ending headache when, despite a strong opening week, ticket sales were persistently sluggish. Spider-Man was eventually caught in its own web and in January 2014, after suffering losses of $75m, it was closed down. Plans for it to tour and play a residency at Las Vegas were mothballed.
There is no doubt that the two friends will likely have been thinking of their ill-fated excursion into musical theatre as they plan their Las Vegas shows. They will be the first U2 gigs since 2019 and, for only the third time in their 47-year union, they will play without a founding member. Larry Mullen’s injury woes mean his place at the drum kit will be taken by little-known Dutch percussionist Bram van den Berg.
On St Patrick’s Day, U2 will be inescapable. David Letterman’s much touted documentary on the band will be unveiled and they will also release their 15th studio album, Songs of Surrender. Rather than an album of original material, it sees the quartet record a selection of songs that span their entire career. As Rolling Stone puts it, the songs are “radically rearranged and stripped down.” Forty songs are featured — the same number that formed the bedrock of Bono’s recently published memoir, Surrender. It isn’t an exact soundtrack, though, as some tracks differ from the songs picked for each of the book’s 40 chapters.
“It was very much a Bono and Edge project,” Adam Clayton told this month’s Mojo magazine. “It started out being, ‘How could we do something that mirrored the chapters in Bono’s book?’ The songs had to show some sort of perspective and development.”
Advance reviews have been positive, with critics praising the inventive results and noting that many of the lyrics have been changed to reflect the worldview of men in their early 60s rather than the going-places-fast 20-somethings who were deemed, in Time magazine’s memorable 1987 cover story, to be “Rock’s hottest ticket”. But anyone hoping that there would be brand new songs in 2023 will be disappointed.
It has been six years since U2’s last album of original material, Songs of Experience — the longest gap in their recording career — and although they have been touting a follow-up album called Songs of Ascent for years, any work done on it seems to have been put in cold storage.
Instead, various members have spoken about work on new songs. Bono says they have been working on a “noisy, uncompromising, unreasonable guitar album” while The Edge insists “there’s an embarrassment of riches of new material” but admits their focus, for now, is on Songs of Surrender and Las Vegas.
The place has long been associated with big name musicians at the tail-end of their careers. Very often, the association is pejorative as ‘Sin City’ residencies have come to be seen, merely, as lucrative opportunities for past-it acts to cash in on former glories. The idea of the washed-up star making easy money in Vegas was popularised by Elvis Presley’s seven-year long residency at Westgate Resort & Casino between 1969 and 1976.
U2 are not the first A-list Irish stars to take on Las Vegas. The late Brendan Bowyer — who was the undisputed king of the Irish showband era of the 1960s — enjoyed a hugely successful residency there during the 1970s.
U2 have been planning this residency for several years. The dates were originally scheduled for 2021, with the intention to honour the 30th anniversary of Achtung Baby — the band’s thrilling early 1990s reboot — but the arrival of the pandemic pushed everything back for a couple of years.
The show was officially announced with a lavish TV commercial during the Super Bowl last month, but with the completion date not yet known, tickets have not gone on sale. Many will be hoping that the prices are more reasonable than those for Beyoncé’s Renaissance tour.
Even in their earliest days, U2 were regarded as a formidable live act, but their reputation as innovators in concert began with the Zoo TV tour between 1991 and 1993. If Pink Floyd had helped create the idea of an audio-visual stadium show some 15 years before, U2 showed just what could be possible when the latest technology and art combined.
U2 will likely have been paying close attention to ABBA’s current live show, Voyage. A high-resolution technical wonder, it features avatars of the band as they were in their late 1970s heyday and takes place in a purpose-built venue in London. It has been a huge commercial success since opening last summer and the plan, eventually, is to move it to Las Vegas.
The MSG Sphere will be a venue like no other. It will feature the world’s largest 16K LED screen, which wraps around the inside of the venue as well as 170,000 ‘beamforming’ speakers to deliver an unrivalled sound. It is believed that the Edge, who has always been the U2 member to obsess most on pushing the band out of their comfort zone, was especially keen on being the act that would open the much-heralded arena.
But the passage of time has taken its toll on the band. Mullen will miss the shows as a result of surgery he had to undergo on his back and neck. Bono has had his fair share of health worries, including the loss of his voice during the last U2 tour.
His memoir opens with a description of staring at the arc lights as he lies in an operating theatre in Mount Sinai Hospital in New York. It’s the end of 2016 and there’s been heart trouble. The chapter is called Lights of Home, after a U2 song that was released the following year. Its opening line is stark: “I shouldn’t be here ‘cause I should be dead/ I can see the lights in front of me.”
While band members would likely fiercely deny it, it has become difficult not to see U2 in 2023 as a museum to itself. It is far from uncommon for many successful bands to rest on old laurels — the Rolling Stones, famously, have been doing it for years and are still touring, despite the death of founding drummer Charlie Watts — but Bono always bridled at the idea that U2 would one day turn into a heritage act.
Much of their focus in recent times has been on an actual bricks-and-mortar U2 museum. They have secured permission for it to open in Hanover Quay in Dublin’s docklands on the site of their current studio.
An examination of accounts of U2’s firms here gives little clue to the band’s enormous wealth.
The band’s main company here is Not Us Ltd and its chief activity is the promotion of musical events and other ancillary activities. The four members have an equal share, yet at the end of the band’s lucrative 2018, the firm’s losses had increased by €1.9m to €13.77m. The firm’s balance sheet has deteriorated since with the most recent accounts — signed off by band members, Paul Hewson (Bono) and David Evans (the Edge) — showing that accumulated losses had increased to €20.8m at the end of 2021.
It feels like a long time since U2 sparked considerable criticism in 2006 by shifting parts of its business affairs from here to the Netherlands in response to a cap on tax breaks for artists in Ireland. In a 2015 interview, Bono defended the move: “It’s just some smart people we have working for us trying to be sensible about the way we’re taxed. And that’s just one of our companies, by the way. There’s loads of companies… Just so people know, we pay a fortune in tax; and we’re happy to pay a fortune in tax.”
Away from the stage, the frontman has lost the odd fortune too. In 2004, Bono and his wife, Ali Hewson, established the sustainable fashion brand, Edun, in an effort to bring about positive change through its trading relationship with Africa and its positioning as a creative force in contemporary fashion.
Shareholder and luxury brand group, LVMH cut its ties with the eco-brand in 2018 and the noble aims of the firm have come at an enormous financial cost to Bono and the firm’s investors with the company’s most recent accounts for 2021 showing accumulated losses of $87.33m.
Edun is not the only business setback suffered by Bono away from the concert arena. In 2008, the Clarence Partnership, whose shareholders include Bono, Ali, The Edge, financier Derek Quinlan and developer Paddy McKillen secured planning permission for a €150m plan, designed by British architect Norman Foster, to transform the Clarence Hotel in Temple Bar into a 141-bedroom five-star hotel and spa. However, the financial crash intervened and the project never commenced.
Involvement in the Clarence was an early investment for Bono and The Edge but due to the limited hotel size, it has never produced major profits for the two band members.
In 2019, Bono, The Edge and the other shareholders in the business sold the leasehold on the hotel to Paddy McKillen Jnr’s Press Up group for €3.74m. Bono, the Edge and Paddy McKillen Snr retain ownership of the hotel building following the conclusion of the deal. Intriguingly, McKillen Snr was also involved in the U2 museum project, but his interest was bought out by the band recently.
Bono’s most high-profile foray into the world of high finance was his involvement with the US based Elevation Partners, which he co-founded in 2004 and named after the U2 anthem, Elevation. The private equity investment fund invested $1.76bn and achieved a 12pc net internal rate of return, according to data compiled by Bloomberg.
The fund made a total of eight investments including BioWare/Pandemic Studios that were later acquired by Electronic Arts and a $100m purchase in Facebook stock from private shareholders two years before Facebook’s initial public offering. Other investments included Forbes Media, Palm, and MarketShare and the fund’s activities were completed successfully in 2015 with the sale of its last portfolio company.
U2 long ago earned a reputation as one of the shrewdest bands in music history when it comes to business. Thanks to Paul McGuinness’s negotiating brilliance, they secured some of the highest royalties of any act for their recorded music in the 1980s and 1990s, and, in 2008, their 12-year ‘360-degree’ deal with promoter Live Nation, was hailed as a groundbreaking arrangement for a band of their magnitude.
In an era where the physical sales of albums has plummeted and where there is greater emphasis than ever before on making money on tours, merchandise and sponsorship, U2 were ahead of the curve.
Even without Larry Mullen at the drum kit, their stunning money-making abilities will be in evidence once more at the end of this year. But for long-term fans, a key question remains: how long will the wait be before U2 release an album of brand new material?
Additional reporting by Gordon Deegan