McGuinness, who guided the band to worldwide fame and fortune after he started managing them in the late 1970s, is reported to be selling his Principle Management company to the American music giant Live Nation, which previously bought into the Irish promotions company MCD.
The deal will see McGuinness becoming Principle Management’s chairman, with the day-to-day management of U2 being handled by Madonna’s manager Guy Oseary.
It has also been reported that Live Nation will buy Madonna’s management company Maverick as part of the $30m (€22.3m)-plus deal, which has set the music world reeling.
McGuinness was always a hands-on manager with U2, accompanying them on all their world tours and scrutinising every deal.
But he is believed to have become frustrated with the delay of the band’s next album, the long-awaited follow-up to 2009’s No Line On The Horizon.
In a statement McGuinness revealed: “It could be seen as slightly poor etiquette for a manager to consider retiring before his artist has split, quit or died. But U2 have never subscribed to the rock and roll code of conduct.
“As I approach the musically relevant age of 64 [a reference to The Beatles’ song ‘When I’m 64’] I have resolved to take a less hands-on role as the band embarks on the next cycle of their extraordinary career.
“I am delighted that Live Nation, who with Arthur Fogel have been our long- term touring partners, have joined us in creating this powerful new force in artist management.
“I have also long regarded Guy Oseary as the band manager of his generation, and there is no one else I would have considered to take over the day-to-day running of our business.”
One music insider said: “I really don’t see this as Paul actually splitting from U2. He’s kicking himself up to the boardroom in Principle Management. Live Nation are buying into the company and he will still be the chairman. He’s stepping back all right, but he’s not completely splitting from them, from what I hear.”
While rumours of illness, a dispute, or the controversy over the band moving their tax affairs out of Ireland were still doing the rounds last night, another former music executive who worked with the wily manager in the past said: “I think he just wants to kick back and enjoy himself a bit. He enjoys film and the arts, so he will keep himself busy. He also has houses all around the world that he can now enjoy.”
McGuinness was always regarded as the fifth member of U2 and guided them through lucrative business decisions over the decades.
U2’s long-standing publicist Regine Moylet and her firm RMP will remain working for the band.
A former student at Trinity College in Dublin, Germany-born Paul McGuinness first saw U2 perform back in May 1978 at a gig in Dublin where they were supporting a band called The Gamblers.
He had been urged to check them out by the late rock journalist Bill Graham, a writer with Hot Press magazine who the group had contacted for publicity.
He persuaded them to take him on as their manager, and hard work was key from the get-go.
McGuinness, who left Trinity before completing his degree, directed plays in the university and had begun working on several film productions as a technician.
However, he was also interested in music and before U2, had briefly managed the traditional/ folk band Spud.
He began negotiating with record companies in Britain on behalf of U2 and accompanied them on tours of both England and America, where they roughed it in small vans, grubby venues, and cheap hotels. But the five showed a steely determination to make it.
They eventually signed to Island Records, which released their debut album, Boy, in Oct 1980, to generally positive reviews.
In 1984 he founded Principle Management, primarily to look after the band. They released more albums but the big breakthrough came in 1987 with their Joshua Tree album, which became a worldwide hit and conquered the American market.
McGuinness worked tirelessly for the band. His business acumen ensured that they received high royalty rates on album sales and good deals on concert performances.
Bono later revealed how Paul had been nicknamed The Goose in the early days. He said: “The Virgin Prunes came up with that name for Paul. He was The Goose.”
McGuinness married Kathy Gilfillan in 1977. They met while at Trinity College and now have two, grown-up children.
In Ireland they have a country retreat in Annamoe, Co Wicklow, as well as a town house on Ely Place, off Baggot St. The couple also own properties in New York and the south of France.
McGuinness is a tough operator but remains fiercely loyal to friends and acquaintances from his early days.
Last year, McGuinness opened an exhibition of early photographs of the band by Patrick Brocklebank and seemed delighted to meet several old pals from that era.
Besides being involved in setting up TV3, he is also a director of Ardmore Studios, a member of the Phantom FM consortium, was elected to the Arts Council in 1988 and is co-founder of the Celtic Heartbeat label.
He is also an outspoken advocate on the rights of artists, record labels and music publishers.
He has railed against unofficial downloading of music and accused several, big-name companies of building “multibillion-dollar industries on the back of our content without paying for it”.