U2 lose millions in investments - article

Hannah Kidson ([email protected])
Mon, 13 Jul 1998 18:58:04 +0100

    I found this article in the Sunday Times (UK), whilst eating my
breakfast - I thought it might be interesting for some of you:-
                    U2 loose millions in investments, by Maeve Sheehan
and John Burns
U2, the world-famous Irish rock-band, have had to restructure their
business after loosing �10million in German bowling alleys and other
unsuccessful ventures.
The band, worth an estimated �367m, are reorganizing their business
affairs because of poor business investments results. Ossie Kilkenny,
also accountant to the Verve and Oasis, is being replaced as U2's main
advisor by an American lawyer.
U2's management says that in spite of the success of Bono and his fellow
band members for the past decade they have not been making much money.
"They are certainly not broke but they are not as rich as they might be"
one rock management source said. "If you look back at their earnings
over the past 20 years and ask what they have to show for being the
world's leading band, you have to conclude that they have nice houses
and that is about it."
The worst investment was a loss of at least �10m in a company that
planned to build leisure centres for 10-pin bowling and Quasar, a laser
shooting game. U2 also invested in a deal ti buy six sites in Germany
for �8m but were refused planning permission for Quasar because war
games with replica guns are banned by the German government. U2 finally
baled out in 1993 after selling several of the prime sites at a loss.
The loss making deals have created a rift between Kilkenny and Paul
McGuinness, the band's manager. McGuinness has introduced a new
financial team, led by Alan Grubman, the leading American entertainment
lawyer. Kilkenny still audits the band's accounts and is involved in
investments with members of the band.
Most commentators valued the group at several hundred million pounds -
higher earners than the Rolling Stones or Michael Jackson. The Sunday
Times Rich List gave their net worth as �367m, based partly on �3 each
for each of their 76m album sales.
However, the profits were not always invested well. "If they had
invested the money in shares 10 years ago, they would have had a much
better return," a source said.
Management sources say U2's difficulties are as much their own fault as
Kilkenny's. "An element of disappointment has crept into their
relationship with Ossie. They are putting a shape on the next seven
years and want to introduce more accountability and discipline," said
one.
In a rare comment about the band, McGuinness said: "They are now in the
best position of any band ever, in that they own all their own copyright
and master recordings."
A friend of Kilkenny said: "Ossie and McGuinness made a lot of the U2
investments together. They are like a couple splitting up after 20
years and fighting over the kids."

Hope that was interesting for someone!
                        from Hannah

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