The following extended Q&A with U2’s long-time manager Paul McGuinness is from the new issue of Billboard, which features a cover story on Howard Stern; a MIDEM special section with Billboard’s inaugural International Power Players list and 14 Things to Watch at this year’s confab; a look at a day in the life of Secretly Canadian’s Ben Swanson; Beats Music’s marketing plan and way more. Order this special issue here. Subscribe to Billboard here.
Few managers are so closely associated with one act as Paul McGuinness has been with U2, a group he took from a fledgling band of dubious musicianship playing Dublin bars to where it is widely considered the biggest group in the world.
News broke late last year that McGuinness would step back from day-to-day duties for U2 after more than 35 years, handing the reins to Madonna manager Guy Oseary, as the band’s management shifts from McGuinness’ Principle Management to the management division of Live Nation, with whom U2 signed a 12-year touring/merchandising/e-commerce pact in 2008.
In a statement, U2 said, in part, “Paul has saved us from ourselves many times over and we would not be U2 without him,” describing his ongoing role as “mentor in chief.”
The move represents a monumental change for McGuinness, who has devoted more than half of his life to guiding U2. While he has directed countless significant career moves along the way, perhaps the most visionary was realizing the potential of a band he recalls “weren’t very good at all” when he was first introduced to the group by influential Irish music writer Bill Graham — though McGuinness adds that his own lack of musical sophistication didn’t make the band’s lack of chops an issue.
But McGuinness did have the vision to recognize U2’s onstage alchemy — an intense connection between band and audience — and unlimited potential. The fiery ambition and creativity of both band and manager led to a career unlike any in pop history.
In recognition of his lifelong achievements and vision in moving the music industry forward, McGuinness will be the recipient of the 2014 Billboard Industry Icon Award. The honor will be presented at MIDEM in Cannes on Feb. 2. The inaugural Industry Icon Award was presented in 2012 to Sire Records founder/CEO Seymour Stein and in 2013 the honor went to Beggars Group founder/chairman Martin Mills.
Born in post-war Germany in 1951, McGuinness’ father was an officer in the Royal Air Force from Liverpool and his mother a schoolteacher from County Kerry in Ireland. The global perspective of U2’s development came naturally to McGuinness, who grew up on RAF bases around the world in such places as Malta, Yemen and various parts of England, first coming to Ireland for boarding school in 1961.
Raised in a non-musical household, McGuinness still was drawn to a career in the arts. He directed plays and tried his hand at journalism at Dublin’s Trinity College. After a brief career in film production (including a notable stint in the cult classic “Zardoz” with Sean Connery), McGuinness shifted his focus to music, working with such obscure Irish bands as Spud before that fateful introduction to U2 in 1978.
In a revealing, wide-ranging interview, Billboard picks up the story there, at the beginning of a relationship that forever changed the history of music.
Billboard: What was your first impression of U2?
Paul McGuinness: They were pretty smart — that was the first thing that was very clear. They were ambitious, they were interested in what was going on with other bands, and were very committed to performance. Bono particularly was down the front of the stage, looking for eye contact with the audience. Even at a young age, he was a very charismatic frontman.
What were some of your early wins in managing U2?
It was very hard to get a record deal. I thought they were so good, and it was so obvious that they would develop, that it surprised me greatly that pretty well every record company in London passed on them. We had some success getting A&R men to see them, but we had either bad luck, the shows weren’t very good or the A&R guys just didn’t see it. It took a surprisingly long time to get a deal, and in the end the deal we got from Island was the only one on offer.
“It surprised me greatly that pretty well every record company in London passed on them”
We were actually very lucky to get signed by Island, because their culture suited us perfectly. There seemed to be a policy of letting the artist be in charge. I’m sure it wasn’t as simple as that, but there was respect for the artist. What I did not realize at the time was that it was very important to have [Island founder] Chris Blackwell’s involvement. He wasn’t very involved in the signing of the band. He became a big supporter later, but the people who really signed the band at Island Records were [Island A&R man] Nick Stewart, press officer Rob Partridge and [talent scout] Annie Rosebury.
Were such superlatives as “biggest band in the world” even in your head at that point?
The only reason I wanted to manage a band at all was because I wanted to manage a very big band. I certainly wasn’t doing it philanthropically.
U2’s first three albums were critically acclaimed but less than blockbusters, and during that time the band really developed its performance chops. Did you always consider the live thing as a critical part of a band’s career?
We always realized that there were two parallel careers: one live and one on record. We felt instinctively in the early days that it was important to be a great live band so that we were not dependent upon the success of the records. The first album [“Boy,” 1980] was, as you say, critically well-received, but didn’t have any hits. The hits off that album came much later. The second album [“October,” 1981] was recorded in a bit of a hurry and, looking back on it, quite weak. The third album [“War,” 1983] was a No. 1 album in the U.K., and ’round about that time the live album we did at Red Rocks [in Colorado, “Under a Blood Red Sky”] and the accompanying film [“Live at Red Rocks”] really did a lot to break the band in all countries. “Unforgettable Fire” in 1985 went to No. 1 in most European countries and did respectably in the U.S.
It was then that we started to play in arenas in the U.S. We had built up a very strong live base in America. I believed that was very important, and in the early ’80s we would spend three months of every year in the U.S.
One of the most important connections we ever made was with [agents] Frank Barsalona and Barbara Skydel at Premier Talent, [who] really believed in the band. They could see that it was a great live act. I learned an awful lot just from talking with Frank. I used to sit in his office until late at night when everyone else had gone home, and Barbara was our responsible agent. They were both major forces in the success of the band.
In Europe and other territories outside North America we had an equally brilliant agent in Ian Flooks and his company Wasted Talent — the hot agency in Europe when we started out. They picked up on U2 right at the beginning, and we did every date we ever did in Europe for either them or an agent in Ireland called Dave Kavanagh. And we worked with promoters like Leon Ramakers and Thomas Johanssen in Europe since day one, as well as Michael Coppel in Australia.
Working with agents was fundamental to the early success of U2. The band wanted to be good live, and they were prepared to put a lot of time and effort into touring, and so was I. We were not prepared to be the kind of routine visiting English punk band. I attended pretty well every show they ever did.
Which shows stand out?
Many of our great shows have been at Madison Square Garden. It’s a very special place for us, and New York was always a very important market for us because it was such a great live market. We used to play multiple nights at the Ritz [now Webster Hall], and the money we made off those dates would subsidize the rest of the tour.
New York had very weak radio in the early ’80s. There were [rock stations] WNEW and WPLJ, and neither of those stations played U2. We were supported by a station in Long Island called WLIR. Really, we broke New York through performance.
“It has been fascinating over the last decade or more to see the change in status and regard for the concert business and concert people, who they regarded as sort of carnie folk”
In L.A. it was easier, because KROQ picked up on U2 right at the beginning, so the first show we ever played in L.A. was at the Country Club, a 1,200-seater in the Valley. It sold out because we had radio support in advance. Indeed, Robert Hilburn was writing about U2 in the L.A. Times before we even got there. So whenever I meet somebody in L.A. that says, “Ah, yeah, I remember seeing them in the Whiskey or the Troubadour,” I say, “Well, actually, you didn’t. We never played any of those places.” The first was the Country Club and the second show was the Santa Monica Civic, and that was in the course of the first tour. L.A. was always a very strong market for us, and so was Chicago, again, because of good promoters. I can’t remember where we played first, but I’m pretty sure it was for [Jam Productions’] Arny [Granat] and Jerry [Mickelson].
Boston was a natural play for us because it’s an Irish city, and again there was a great promoter. The first show we ever played in Boston was for Don Law [now with Live Nation] at the Paradise. There was great radio there in WBCN.
Not every band placed such a priority on touring, and certainly touring professionals weren’t as highly regarded by the music industry at large in those days.
It has been fascinating over the last decade or more to see the change in status and regard for the concert business and concert people. I remember back in the early ’80s the labels tended to behave in a very patriarchal and lofty fashion toward the concert people, who they regarded as sort of carnie folk. That has changed for the artists, it’s changed for the executives, and it has changed for the journalists.
When I first started working in America, it was when U2 were recording their first album. I went to New York and tried to get an appointment with Frank Barsalona but my father died back in Ireland. I called Frank’s office and said, “That appointment you were going to give me, I won’t be able to make it because my father has died, but I’ll be back next week.” So he had to see me — the guy whose father died — and we became very close after that. I did get a real education from him. He was a great monologist, and I was very happy to sit and listen.
You and I spoke at the Frank Barsalona memorial dinner last year, and seeing all those promoters you worked with back in the early days must have been a cool night for you.
It was great to see all those old rogues in one room [laughs].
They were rogues, but you needed them to believe in your act, and the business model at that time, if they believed, worked well to move them from the clubs up the venue chain.
Absolutely, and many of those guys we’re still working with, or with the successor organization that they [joined]. The big change in our business, I suppose, came when we stopped working with the agents. We worked successfully with Premier and Wasted Talent through the ’80s and most of the ’90s until 1997, the PopMart tour. That was the first tour we did with Michael Cohl and Arthur Fogel, who were called TNA in those days. That was a big change, but it was necessary because the cost of producing big outdoor tours was too much for the band to finance.
There was always jeopardy — you never knew when a show might fall out of bed or get canceled or whatever. The band were carrying the entire risk. The Zoo TV tour [in 1992] was the one we financed ourselves, and it was scary. Underwriting big tours is now absolutely normal and everyone knows how that works, but in those days it was a very difficult meeting to have when I went and told Frank that we were no longer going to be with Premier, and I had to have the same conversation with Ian Flooks.
I’m happy to say that Ian and I are still friends, though he’s no longer in the business. Frank and Barbara are no longer with us, but I know it was a painful thing for them.
For PopMart in 1997 there was a bidding situation for the promotion rights, and it created some strange bedfellows in some of the partners that aligned.
Yes, we basically treated it like a corporate transaction. We invited bids for the tour, set within certain parameters. I remember a very formal document called the ITB, Invitation to Bid, and we sent that out to interested parties, and some of them formed consortiums. In the end, the band and I chose Michael and Arthur, and we’ve been working with Arthur [now chairman of global touring for Live Nation Entertainment] ever since.
Around the time of Zoo TV you made a decision to put big money into production. What was the philosophy? Was it providing value to fans, was it art, or was it commercially motivated?
Video was developing in a way that it hadn’t in the ’80s. Philips Corp. owned PolyGram, which was by then the owner of Island Records. Philips had developed some of the cutting-edge video technology, and I naively believed it would be a natural kind of corporate sponsorship and they would pay something to have that technology on display. It was the perfect vertical integration for Philips, the hardware, and PolyGram, the software.
I tried to get Alain Levy, the head of PolyGram at the time, interested, and he was. He could see the opportunity, but he couldn’t get Philips in Eindhoven [the Netherlands], which is where they were headquartered, to do it. We had to buy a lot of the equipment ourselves from Philips, which was extremely annoying — inexplicable, really.
Years later, Jan Timmer, who was the head of Philips, came to a U2 show in Holland and he saw all this technology manufactured by Philips, and Bono said to him, “Jan, how come you wouldn’t come through with the TVs and the screens?” And Jan said a very strange thing: “Bono, let me explain to you: Sometimes in a big corporation like Philips, even the boss can’t get what he wants,” which was a pathetic thing to say.
Regarding PolyGram buying Island, reports say the band made $30 million in stock when that transaction occurred for $300 million. That seems a fortuitous turn of events for U2.
We’ve never confirmed the figures, but we were part owners of Island by the time the PolyGram deal took place. That had happened because at one point Island was finding it difficult to pay us after the success of “The Unforgettable Fire.” So rather than get paid, we took stock in Island, and the following year  The Joshua Tree obviously made a huge difference to the environment. Island was still independent at the time of The Joshua Tree, and it went to No. 1 all over the world through a different licensee in every country. So when PolyGram bought Island, we richly deserved to participate in that success.
“The Joshua Tree” changed everything for U2. At the time, did it feel like a special record and a moment that could catapult the band to yet another level?
Yeah, it had two No. 1 singles in the U.S., “With or Without You” and “Still Haven’t Found What I’m Looking For.” I remember playing that album in the early part of 1987 to a group of Island’s licensees, who I had managed to gather in Cannes at MIDEM — in fact, at the Carlton Hotel, where this [Billboard Industry Icon] breakfast is taking place. I had rented a modest suite and was playing this record to the people that were going to have to sell it around the world.
They were hearing it for the first time and their eyes were lighting up. I could see them thinking, “Oh, yeah, bonus time. We’re going to do well with this.”
If you play music to the people who have to sell it and promote it to radio stations, sell it into stores, you get a very visceral response, and I remember feeling that in the room at the time. It was very exciting, and I knew then — actually, I probably knew already — that it was going to be huge.
I assume you were at some of those sessions and were hearing some of the music. You must have felt something special was happening.
Absolutely. It was an amazing record, and the producers Brian Eno and Danny Lanois, that was the first time we did what later became almost standard practice. Steve Lillywhite would come in to finish the record and make decisions not always welcomed by Brian and Danny. But Steve has been such a critical part of so many U2 records that it should never be forgotten.
When “The Joshua Tree” hit like it did, how did you keep U2 growing?
The Joshua Tree tour — starting with the two hit singles, cover of Time magazine, No. 1 all over the world — we went on tour pretty well worldwide. We decided to try and make a movie that would take the band even wider. That was “Rattle and Hum” [in 1988] with [producer] Jimmy Iovine. That wasn’t actually the first time we’d worked with Jimmy, as he mixed the tapes for “Under a Blood Red Sky.” Jimmy had been disappointed not to get the job of producing “The Unforgettable Fire,” so when we decided to make a movie, it was a feeling that that was the way to really take the band worldwide. The examples we were looking at were Elvis and the Beatles and so on, who had achieved great things with movies, or some great things, in Elvis’ case.
The movie, and the double album that went with it, kind of took over the tour. We made the movie at our own expense and managed to sell it to Paramount, who wanted to give it very wide distribution. It opened on like 1,200 screens in the U.S., which in those days was a massive number. The plan for the movie was we would promote the movie by having a No. 1 album just before, which we did, and then the movie would be huge, we thought.
Unfortunately, it didn’t work out that way, and the movie performed basically to U2 fans, who loved it, but it did not bring a wider audience into the theaters. We had a pretty strange opening weekend. It had a huge Friday night, a modest Saturday night and a terrible Sunday night. I remember driving around in L.A. with some excitement with Paramount executives Barry London and Sid Ganis, who we had worked with on [the project]. Friday night was very exciting, Saturday night we were beginning to worry, and Sunday night we knew that essentially the audience for the film was very limited.
Jumping forward a bit, I’d like to revisit the multirights deal with Live Nation and the strategy there.
The deal with Live Nation is not really multirights in that, in regard to our recording and our publishing, the band owns all their own masters and copyrights going right back to the beginning, and those are currently licensed to Universal Music Publishing and Universal labels, Interscope in North America and Island in the U.K. and elsewhere. Live Nation [doesn’t] participate in those rights. The rights Live Nation have are to do with merchandising, concerts and online. That’s a very satisfactory and integrated relationship.
“Were it not for piracy, I believe iTunes and Spotify would be so much stronger, and would be able to pay the artists even more”
The friendship with Arthur Fogel goes back many years, and it has been very interesting to watch what has happened with the group of promoters that Bob Sillerman put together as SFX [which evolved into Live Nation]. This network of promoters that he basically bought all around the world and across North America were pretty well in every case the promoters that we were working with already. So when they bought TNA, and the name became Clear Channel and now Live Nation, we have basically stuck like glue to Arthur through that whole process. I’m sure there was a certain amount of pain when Michael Cohl exited Live Nation [as chairman in 2008], but we’re still involved with Michael, because he was the producer of “Spider-Man” on Broadway [for which U2’s Bono and the Edge wrote the songs]. So there’s a good relationship with him.
I know that at times things became a little tense between the former chairman and the new regime at Live Nation, but it suited us the way things went in the end, and Live Nation is an admirable corporation and I wouldn’t dream of working with anyone else.
Well, the proof is in the pudding. You can see it in the tour grosses, and I can only think that the merchandising and e-commerce have done equally well. As U2 is now roughly midway through this deal, do you have any regrets?
None at all. It’s tough at times for those guys, because running a worldwide concert company and at the same time satisfying Wall Street, that’s not easy, and [CEO Michael] Rapino does a pretty good job of making all that happen. Most people don’t realize that he and Arthur are as hand-in-glove as they are — they really are a pair. Rapino, of course, started out working for Michael Cohl all those years ago. The Canadians are taking over the world. Arthur’s very modest, but he’s my hero.
At MIDEM in 2008 you fired a shot heard ’round the world, so to speak, in criticizing the relationship between music and the technology business. Why did you feel so strongly on this issue?
Because the music business was in a very rapid decline and the recorded-music industry was reacting to it in a very defensive and unproductive way, basically trying to maintain the status quo, which was clearly not going to be possible. There had been two decades of explosive growth in the record industry before piracy, and particularly online file sharing devastated record sales.
I felt, and I further still feel, that the machine makers, the online distributors, the Apples, the Googles, the Internet service providers — that whole group of multibillion-dollar industries that had basically built themselves on the back of content — should bear more responsibility for trying to ensure that the makers of the music, the makers of the films, get properly paid.
“Their masters and their copyrights, have been, with difficulty and at some costs, completely retrieved”
The movie business has learned a lot from the way the music business was devastated, but they still suffer a great deal. The impact of piracy on the movie business is enormous but nothing like what happened to the music business.
My feeling is there are so many brilliant, creative people in those companies, if they had adopted a more positive and generous position toward recorded music, it would have been better. What we have now is legitimate digital distribution of all music and, if you’re an honest person, you can buy anything on iTunes, you can hear anything on Spotify. Those are efficient distribution systems. Of course, I would like to see the artists getting more. Were it not for piracy, I believe iTunes and Spotify would be so much stronger, and would be able to pay the artists even more.
Your position received a bit of negative reception by some who took the position of “Doesn’t U2 have enough money?” But your perspective was much broader than that.
As I discovered at that time, if you raise your head above the parapet, you get shot down. The blogosphere is an awesome beast, as members of Congress tried to pass [the Stop Online Piracy Act discovered]. The legislators got the fright of their lives, and exactly the same thing happened to members of Parliament with a similar bill. Google had a black flag of mourning, Wikipedia went off the air for the day — that ability to unleash a kind of online mob is going to scare politicians. The relationship between the online industries and politics and government is being called into question all over the world now, and it’s not just piracy — it’s taxation, privacy, censorship, all sorts of things. There is nervousness in the air, and the music business is a small part of the overall thing. Those corporations are extremely powerful, and I hope in the future they will observe their responsibilities to the creators of the content.
Any regrets in raising your head above the parapet?
No, not at all. Because what I was saying I wasn’t saying on behalf of U2, and I tried to make that very clear. Not that I have a mandate or anything, but I was speaking on behalf of all writers, all performers, all labels, all publishers. The damage was being done to all of them, not just my clients. That’s no reason not to make the case, just because I have successful clients.
What was behind the decision to step back from managing U2, and the band’s signing Guy Oseary and moving to Live Nation’s artist management division?
I’m 62, and I did not feel like doing the next tour. As you have observed, I’ve been to pretty well every show U2 have ever performed, and I just did not want to continue doing that into my 60s. The rights to U2’s music, their masters and their copyrights, have been, with difficulty and at some costs, completely retrieved. I had some equity participation in that, but the right people to sell that equity to were the band. That’s really what has happened in this transaction: U2 have acquired the remaining rights, and they now own 100% of their masters and their copyrights.
So you sold your piece, basically?
Yes, and Live Nation were very helpful in supporting the transaction. They financed the transaction.
What is the band’s take on all of this?
I’m not going to speak for them on it. They issued a statement that was very supportive and they have been completely supportive throughout this transaction. We are the best of friends. I’m delighted they chose Guy to take the reins. We’ve known him for a long time. He’s a smart guy, and I wish them all the best. I will be, if you like, lurking in the background, always available to help if I am needed, but it’s more of a back-seat role.
That is a seismic shift in your day-to-day life.
Yeah, it is, and I’m rather enjoying it, I have to say.
What about the roles of your associates in Principle, like Susan Hunter, Trevor Bowen and Karyn Kaplan, going forward?
Trevor and Susan are staying with me, because I have some other businesses I’m involved in. I’m an owner of the Film Studios in Ireland, and I’m involved in a number of restaurants in the United States with my old buddy Ken Freidman. He and I have been friends since the early ’80s — he was my first American friend, really. Karyn Kaplan is going to be working on the next campaign with Guy.
There has to be some assessment as you step back. How do you feel about what you accomplished? Is it a sense of “job well done”?
To some extent, yes. They’re doing their best work ever. I’ve heard most of the new album, and it’s absolutely amazing. They’re creatively ambitious — they really want to have hits and a successful record. They know as well as anyone else that their tours will be successful whether they have a big record or not, but they don’t want to slip into that kind of heritage category of artist. So finding a new audience has always been very important to U2 with every record.
In that way they are as driven and creative as they ever were. Unlike a lot of other artists in our business, they didn’t get fucked by bad deals — they’re in charge of their own destiny. They have the keys, they have the car, and they’re planning to drive it forever, as far as I can tell.
For a band so focused on touring, to have the most successful tour in history by every metric has to be satisfying. [U2’s last tour is the highest-grossing, most attended tour ever, according to Billboard Boxscore.]
Yeah, they love performing. You’ll be amazed and impressed by the new tour, which they’ve been working on the design and concept throughout this record project. It will blow everyone away yet again. They’re on fire.
What would you like your legacy to be?
Well, it’s quite an honor to get this award from Billboard. I have great affection for Billboard. I’ve been reading Billboard for 40 years, and whenever somebody comes to work for me, I say to them one of the things you’ve got to do is read Billboard every week, because that’s where the information is. In fact, now you’ve got to read Billboard every day.
Reading the trades is a very important part of the job if you’re in this business, and I have always loved the business. I’ve enjoyed the business, the friends I’ve made in it, the things I’ve discovered. This trip to MIDEM at the end of January — I’m a regular. I’ve been going to MIDEM for 30 years. I’m now in the “veteran” category, which is an honor. This award was given last year to Martin Mills, somebody I’ve admired greatly over the years. Before that it was Seymour Stein, a very old buddy of mine. So how could I say no?