Rights deal lands U2 beautiful pay day

MULTIMILLIONAIRES U2 have struck a deal to make them even richer after selling the worldwide rights to their merchandising, tours and sponsorship deals.

Band members Bono, the Edge, Adam Clayton and Larry Mullen have signed a deal with Los Angeles firm Live Nation, which also owns Dublin’s Point theatre.

The 12-year deal includes merchandise and licensing rights, sponsorship and other commercial agreements, as well as fan club and other marketing services.

The amount of money U2 will earn in return is not being made public, but Live Nation recently struck a 10-year deal with Madonna for $120 million (€75.9m).

Madonna’s deal includes three albums, but U2 will remain with their current label Island Records, which is part of French-owned Universal.

The deal was made amid upheaval in the music business as sales of albums are falling. Record companies are suffering because music sales on the internet in the form of “downloads” have not made up for the drop in demand for compact disc albums and singles.

Instead, record companies like EMI are making their money by signing up artists and agreeing to so-called “360-degree” contracts, which include albums as well as sales of concert tickets, official merchandise and sponsorship.

Live Nation’s deal with U2 combines the valuable rights to money-making activities like merchandising, touring and commercial agreements but leaves alone the recording contract.

“It’s not a do-or-die situation that we have to be involved in the recordings,” said Live Nation chairman Michael Cohl. “We’d prefer to, but it’s not always available.”

Several of Live Nation’s senior staff have managed U2’s world tours for more than 20 years, the company said.

Now Live Nation also plans to rope in other established artists to similar deals, which it believes will help boost profits.

“Our intention is to work with artists who are already making it or on their way to making it,” he said.

Mr Cohl said his company will focus on signing established artists rather than developing new acts like a traditional music label would.

With the deals with giants such as U2 and Madonna, Live Nation will sell concert tickets through its website and also offer merchandise sales as well as fan clubs and other features.