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When the U2 marketing juggernaut rumbles onto the stage tomorrow night in San Diego to kickstart the band's latest world tour, it will also begin a process which is likely to make the world's top rock act almost €200m richer by the end of the year.

Apart from sheer longevity, what sets the group apart from others of similar vintage is an unparalleled ability to keep grinding out new material and turning it into hard currency.

Paul McGuinness, the group's savvy manager and equal partner, has left nobody in any doubt about what the latest tour is all about.

"They are determined not to become their own kind of tribute band," McGuinness told a Canadian newspaper last week. "It's not a greatest hits show. It's very important to us to get the new material into the spotlight, so you can expect most of the new album will feature in the set."

In other words, as well as providing the customary merchandising opportunities, this tour is all about increasing sales of How to Dismantle an Atomic Bomb, the band's latest album, which has already sold an estimated 9m copies worldwide.

Last year's Sunday Times's Irish Rich List put U2's collective wealth at €617m, which ranked them seventh in the country. This year's list, which will be published next weekend, is expected to show a slight increase.

This fortune has been amassed with the not inconsiderable help of the band's tax-free status under the artists' royalty exemption scheme allied with McGuinness's business savvy. It is now the basis of a sprawling, multi-billion-euro business empire that ranges across property, media, clothing and new technology.

U2 are, in McGuinness's words, that "rarest of things: a major touring attraction that is still having No. 1 records all over the world after 25 years."

If initial estimates are correct, the new tour could bring in $250m (€193m), well above the $143m reaped from the 113 shows on its last spin around the globe in 2001.

The current tour comprises 103 dates, with more being added all the time, keeping the band on the road until just before Christmas. A 28-date initial sweep across North America will be followed by 30 gigs in Europe, from where it is back to America and Canada for another 45 performances.

The daily numbers are impressive. The 160,000 tickets for the the two shows in June at Dublin's Croke Park were sold in 50 minutes, at prices ranging from €68-€90. With the tour visiting stadiums of similar size this suggests a gross income of more than €5m a day, and that's before merchandising and album sales are totted up. Even taking account of the expense of hiring each venue and setting up and dismantling the set, it makes for an enormously profitable venture.

In rock terms U2 have performed the remarkable trick of managing to retain artistic credibility without pretending to loathe commercialism. For Bono, the lead singer, part-time messiah and focal point, the two are not mutually exclusive.

"What's wrong with wanting to be a big commercial band and also an art project?" he once mused. "The notions that you can't do that are retarded. If you are a writer and you write a book that captures the public's imagination and it becomes a bestseller, does that take away from the book you wrote?" The singer is one of the driving forces behind Elevation Partners, a venture capital fund that is currently in a bidding war for Eidos, the troubled British computer and video game maker that spawned the Tomb Raider series and its cyberheroine, Lara Croft.

Bono's group has bid $135m cash in the attempt to secure what would be Elevation Partners' first investment. The singer is in constant contact with his partners through wireless e-mail.

Bono has always been happy to serve both God and Mammon. In October, the multi- million-dollar deal the band signed with Apple Computers to put U2's new album and back catalogue onto the company's iTunes service together with a customised U2 iPod added $2 billion to Apple's market value. Despite criticism from some fans that the deal is the ultimate "sell-out," the band has managed to shrug off the increasingly naive-looking "purists" who still think rock should be about rebellion.

Defending the iPod move -- which nets the band $25 from every U2 iPod sold -- Jimmy Iovine, the head of Interscope Records who once produced U2, said it merely reflected the technological and societal changes. "When we were kids, doing a TV ad, appearing on the Super Bowl halftime show or singing at the Grammys would be a bad move for credibility, but not any more," he told the Chicago Tribune.

U2 chose Apple -- after turning down three $20m offers to appear in television commercials -- because it managed to "fit what they wanted to do aesthetically" and reached a younger audience with a hip, in-demand product. Not coincidentally, within 72 hours of Bono and the boys endorsing the iPod, Apple's share price hit a 52-week high of $53.20.

"The iPod adds a very important step in the transition of the record industry," Lovine said. "You've got to think like the kids, and this is legit in their heads. Television is a way to reach that audience, because it's harder than ever to get radio play today."

That desire to keep a line of communication with each new generation of fans has come to define U2. It has also, not by coincidence, made them hundreds of millions of dollars, for which Bono credits McGuinness. "The biggest bodyguard of all has to be our manager," Bono said at the Rock and Roll Hall of Fame induction ceremony in New York earlier this month. "The reason no one in this band has slave scrawled across their forehead. Thank you very much."

U2 may acknowledge McGuinness as the financial brain behind the band but this has not prevented Bono, the Edge, Larry Mullen and Adam Clayton dabbling in the world of business themselves -- albeit with mixed results.

In contrast to their high-energy publicity machine, the four Dubliners have largely managed to keep their investments low key with the exception of numerous property deals. Aside from sprawling pads in the wealthy Dublin suburbs of Dalkey, Killiney and Sutton, they individually have properties in London, New York, New England, Malibu and southern France.

Their collective forays into property investment have proved less successful. Bono was forced to give a loan of almost €4m last year to the Clarence hotel, which he co-owns with the Edge and Harry Crosbie, owner of the Point, to keep it afloat after sustaining years of losses.

An investment in the Dublin branch of Planet Hollywood in 1998 proved to be another bad move for the band. The outlet was forced to close its doors, having struggled since it opened.

The U2 front man has also launched a clothing range, despite the unlikely self-deprecating admission that "the man who brought you the mullet" knows absolutely nothing about fashion. Bono and his wife, Ali Hewson, have teamed up with Rogan, a men's clothing designer, to produce a range of jeans and T-shirts under the brand name Edun -- nude spelt backwards.

The product line is intended to promote social awareness about restrictive trading practices that work to the disadvantage of Third World countries.

While Bono concentrates on his various international campaigns, it is McGuinness who continues to cut innovative deals on behalf of the band. Selling more than 100m albums ensures wealth no matter what the deal, but in 1993, he negotiated the band a 25% royalty rate -- significantly more than the industry norm -- with the band's then-label Island, as well as a $10m advance for each album.

With Interscope, the advance has gone up to $12m and some reports suggest the band was getting up to $5 on sales of some units of the November-released How to Dismantle an Atomic Bomb.

Beyond that, there was the deal, reportedly worth $100m, to conduct all tours through Clear Channel's concert arm, TNA Productions, as well as merchandising, licensing and investments in properties and in other forms of entertainment, such as McGuinness's punt on Riverdance, which reportedly netted early investors a return of 2,000%.

"We improvise to a certain extent," McGuinness once told an industry magazine. "The band have always been aware that we exist in a commercial world and, to maximise the creative possibilities of being a big rock band, you have to pay attention to the business."

The four schoolboys who began practising in drummer Larry Mullen's kitchen in 1976, have managed to reinvent themselves into a fourth decade. "We're back, we're applying for the job," Bono said in 2001. "The job is: best band in the world."

In an era when gigs sell out in minutes, the secondary market in tickets on the internet is perhaps where the marker of such success lies.

On Friday there were nearly 7,000 separate offerings on eBay, the auction site, of U2 tickets. Some were asking close to $1,000 for tickets sold by promoters for $165.

Which is not as bad as gouging ticketing agencies -- premium seats for shows in Los Angeles next week are going for $1,500, while Silicon Valley types are being offered tickets in San Jose for as much as $2,850 apiece. Front and centre at New York's Madison Square Garden will cost as much as $3,420 for a seat.

U2 are at the top of the ladder in the rock star game. "They are champions," McGuinness told Vanity Fair last year. "They hold a title. And if anyone wants to try and take that title away from them, they're welcome to try. But until then, we're holding on to it." And to the money, of course.



© Times Newspapers Ltd., 2005.

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