Lunch with the FT: Paul McGuinness
By Andrew Edgecliffe-Johnson

Published: December 4 2009 15:28 | Last updated: December 4 2009 15:28



“I figured out bad wine costs the same as good wine, so why not learn about it,” says Paul McGuinness as he orders a $69 bottle of Oregon pinot noir. “I probably imposed that on the young U2. We had a practice when we were first touring. We’d economise on hotels but go to good restaurants.”

More than three decades and 140m records after McGuinness, now 58, started managing four Dublin teenagers, the world’s most successful band stay in rather better hotels and he has been able to put his money where his mouth is, as an early investor in the Michelin-starred Manhattan restaurant where we now sit.

It has taken us three hours to get to our corner table in the Spotted Pig, which feels more of a village inn than the London gastropubs it is supposed to resemble. McGuinness had suggested we meet first at Madison Square Garden to watch U2 rehearse for the Rock and Roll Hall of Fame’s 25th anniversary show.

In an almost empty arena, I have been granted a private concert and a glimpse of why McGuinness is one of the few people in the miserable modern music industry to be noted for their business acumen.

EDITOR’S CHOICE
More from Lunch with the FT - Jun-12Jon Landau, Bruce Springsteen’s manager since 1974, approaches as we watch U2 warm up. “The thing I dislike about Paul is, before he came along, I liked to think I was the best manager in the world,” he jokes. “Now Bruce likes to say, ‘I call my manager the American Paul McGuinness.’”

Elvis had Colonel Tom Parker, and John, Paul, George and Ringo had Brian Epstein. McGuinness is U2’s fifth Beatle. He claims no creative role but can take credit for a series of eye-catching deals that have led to U2-branded iPods, 3D concert films, a 12-year touring deal with Live Nation, sponsorship from BlackBerry and, just before we meet, the first concert streamed live on YouTube, which was seen by 10m people around the world. Most importantly, Landau adds, McGuinness locked down the band’s master recordings and lucrative publishing rights.

On stage, I have watched Bono, the Edge, Adam Clayton and Larry Mullen run through a lengthy set with guests including Springsteen and Patti Smith. Mick Jagger, the only man who competes with U2’s stadium-filling ability, has prowled about the stage with Fergie, the lead singer with the Black Eyed Peas. She has floored everybody with a scorching assault on the opening bars of “Gimme Shelter”.

“Holy cow, Batgirl!” Bono says when she’s finished gyrating. The Black Eyed Peas supported U2 at the end of the tour that has wrapped up days before we meet, and McGuinness calls out, “Nailed it!” as the leather-clad vocalist walks past, earning a grin from behind her shades. “She’s notorious and scary and a lot of fun,” he tells me approvingly before we leave.

It is almost 3pm when our car draws up outside the small creeper-clad corner site in the West Village. The Spotted Pig is packed, we are famished, and McGuinness wastes little time in steering me to the best-known dish. “The gnudi!” He pronounces it – the “g” is silent – with naughty relish. In his striped wool tie, black shirt and corduroy jacket, McGuinness doesn’t look as if he hangs out with rock stars but he does look as if he enjoys his food.

There is a chill in the air, and the pumpkin and serrano ham salad sounds comforting, so I order that followed by the gnudi – plump dumplings stuffed with ricotta. McGuinness picks smoked haddock chowder and gnudi.

Like most of his deals, his involvement with the restaurant has paid off. “It has long since repaid its syndicate of investors,” he says. “It’s a combination of the atmosphere, the decor, the pricing, which is low for a Michelin-starred restaurant, and the very straightforward, English approach to the food.”

He sniffs the wine unfussily as he tells me how he got involved through the Spotted Pig’s co-owner, Ken Friedman, a one-time manager of the Smiths and a close friend. McGuinness, it turns out, is a man of many useful friends. (As he runs me through the story of how he came to U2 he loses me in a list of names as long as the cast of an Irish Russian novel).

McGuinness met U2 at a Dublin gig in 1978 – they were supporting a band his sister managed. “They were doing quite badly what they now do well,” he says. “Edge was playing notes rather than chords – this was punk and it was almost frowned upon to be playing individual melodies. Bono was very keen to make eye contact, and physical contact sometimes, with the audience. He was very hungry for making them look at him. He was then and is now an exhibitionist, as all great performers ought to be. It was just quite exceptional.”

McGuinness, who was managing a now forgotten folk rock band named Spud, signed them up in the pub next door, over pints the band members were too young to be drinking, and laid down some business rules. “I recommended very strongly that they split everything because I’d read about other bands where there were officers and men – the Rolling Stones being a classic example, and the Beatles – where the songwriting members of the group earned significantly more than the others.”

From their first deal, all four were credited as writers. “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,” McGuinness says.

Unusually, McGuinness negotiated an equal share for himself. Do you still get 20 per cent, I ask? Apparently not. “That was, in fact, reviewed later,” he says. “I had to build the management company, and they had to build the production organisation that makes the records and does the tours. If our overheads were going to be intertwined, that would be to ignore the reality. There should always be a division between client and manager.”

Those rights McGuinness did not secure for the band at the start, he doggedly clawed back as deals came up for renewal, using the band’s strengthened negotiating position.

“It was partly a moral thing,” he says, sounding for the first time a little like Bono. “You’d see a writer complain helplessly when his work was used in an inappropriate way, and we were determined that would never happen to us.”

Our first course arrives, and he invites me to try his rich chowder, decorated with crackers and shredded rocket. I offer a forkful from my plate – the roasted pumpkin is warm, the ham salty and the toasted pumpkin seeds appealingly nutty.

McGuinness has emerged as a vocal campaigner for internet service providers to pay up for the music consumed over their networks, an idea that has gained support since he raised it in a speech two years ago. Publishers’ drive to be paid for their content, symbolised by Rupert Murdoch’s talk of online subscriptions, has helped, he notes, although he says it is a pity that the News Corp chairman’s “road to Damascus conversion” did not take place sooner.

So why give away valuable content, such as a concert, online? “We don’t quite give it away,” he corrects me. YouTube will pay royalties to Universal Music, U2’s record label and publisher, and share advertising revenues. It is pointless to try to stop fans posting concert clips online, he argues. What is possible, he says, is to expect ISPs to pay rights holders their dues.

McGuinness, who was born in Germany to a military family and lived in Malta, Aden and England before going to Ireland’s Clongowes Wood College, is unsparing in his criticism of how the clashing agendas of Europe’s member states have delayed changes sought by his industry.

“As the EU expands, it is clearly the case that these small, peripheral nations have no significant cultural heritage to protect in an international context, whereas Germany, France, Britain and Ireland certainly do,” he says bluntly, in an accent more English than Irish. “When the Czech Republic held the EU presidency, for example, simply by not tabling a motion on [copyright] term extension, they were able to defeat it. The Czechs!”

Our plates are cleared away and McGuinness snaffles a stray piece of rocket stranded on the table between us. The soup has made him hot and he wipes a hand across his brow.

I ask about U2’s latest album, No Line on the Horizon, which was released in February this year and has sold fewer copies than any album by the band for a decade. “We were not anticipating that we would not have a hit single to drive the record,” McGuinness admits. “That was an unpleasant surprise.”

Our gnudi arrive in a brown butter sauce with a few crisp sage leaves on top. “Isn’t that wonderful – the gnudi?” he asks, enjoying the word again. The album has still sold more than 4m copies, he says, but he doesn’t hide his disappointment. “It didn’t work in the marketplace. It worked creatively, I think. If people give themselves the treat of sitting down with big speakers, playing it properly and giving it the time that an album needs, I think it’s a magnificent record.”

Few people now listen that way, he laments, but they will pay an average of $100 a ticket to see U2 in concert, even in an uncertain economy. In 44 sold-out dates since June, the band played to 3.2m people, for a gross of about $320m. Running the numbers aloud, McGuinness calculates that with a similar number of dates planned for next year, the tour should gross about $750m including merchandise sales, smashing the $389m record set by U2’s Vertigo tour in 2005 and 2006.

It has done so in part by using a 360º stage to increase each venue’s capacity by a fifth. Partly because of the custom-built, claw-shaped set, the tour costs are about $750,000 a day, “whether we play or not”. The tour should still be “highly profitable ... but very often that gross figure is carelessly written about as having gone straight into Bono’s pocket”. Our clean plates are taken away. It is after 4pm and it seems no table has emptied since we arrived. McGuinness orders a double espresso and I ask for an Earl Grey tea; his appearance may be rumpled but there is ruthlessness in his eye as he tells me about the importance of attention to detail when auditing the band’s payments from record companies and publishers: “On not one of those occasions did we fail to uncover an underpayment.”

Don’t such tricks help explain why people feel labels are just getting their comeuppance? “All right, it’s been the law of the jungle many times,” McGuinness says as our drinks arrive. “But what dismays me a little about the online universe is that these corporations, like Google and MySpace and Apple, don’t have anything that’s the equivalent of artist relations.”

One day, tech groups will have their own talent scouts and digital versions of record labels, he predicts. For now, the “great cultural collisions” taking place worry him. “I find I’m often dealing with [technology] executives who are really quite careless and frequently arrogant about the cultural impact of what they’re doing. I wish there were an atmosphere of nurturing and respect, which I really don’t see.”

Our waitress brings a candle. It’s late autumn in New York, and starting to get dark. McGuinness, who is married with two adult children, will soon fly back to his homes in Dublin and London and I ask what he has planned before the tour starts again in May. A stalled Spiderman musical, written by Bono and Edge, backed by McGuinness, should open on Broadway in the spring, and the band is talking about delivering another album very soon. “If they pull it off, that would be great, but I’ve learnt over the years to plan for all eventualities,” he says.

I ask for the bill, as McGuinness tells me his own musical tastes run from the Rollling Stones’ Exile on Main Street to the sung Latin mass at London’s Brompton Oratory. “There is no check,” the waitress tells her investor, and considerable confusion ensues. “No, I’m afraid that’s no good. Do you ever see that column in the Financial Times called Lunch with the FT? They have to pay. Oh that is funny.” He is still chuckling as I hand my card over (just the tea and coffee end up being free) and ask whether he’ll ever retire.

“Oh, I’d hate to. People used to think that rock and roll was music for teenagers. But we’ve just come from Madison Square Garden where Sir Mick was performing aged 66. I’m always delighted when Mick makes a record or does a tour because he makes U2 look so much younger.”

Andrew Edgecliffe-Johnson is the FT’s media editor

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