"A lot of people have nothing to say, and they say it all the time."
U2: It's A Business
We Take a Hard Look at the Financial Side of Being the World's Favorite Band.
Hit Parader Presents U2,
June 01, 1992
When the North American concert season concludes in December, U2 will undoubtedly head the list of top grossing acts of the year according to charts in the touring trade publications. U2 already held this distinction in 1987 when they topped the Performance Magazine chart with a gross of $35 million, attracting 2,035,539 fans for 79 Joshua Tree tour concerts.
Projections indicate that the Irish quartet will wind up with the second largest grossing North American tour in recent years, second only to the Rolling Stones' Steel Wheels tour of 1989 that grossed $98 million.
In a very deliberate booking strategy, U2 decided to perform indoors in arenas in the winter/spring with a series of one-nighters. (They played two nights each in Los Angeles and Tacoma, Washington). Even though U2 could have played at least a week in most major markets, the Irish aggregation wanted to create a demand that would far outstrip supply, and boy, did they. Ma Bell knows!
Tickets went fast and furious, selling out as quickly as the computers could print them. In Los Angeles, the phone company estimated that five million calls were attempted by fans attempting to be one of the privileged few to buy a ticket to the Sports Arena show. Over two million calls were made in the Boston area for the Boston Garden show. Of course, some would-be patrons utilized the repeat mechanism on their telephones.
While a Lakeland, Florida, show sold out in a rapid four minutes, 49 seconds, a Palace of Auburn Hills concert outside Detroit sold out in 17 minutes, breaking a house record with a gross of $526,600. All tickets for the tour were priced at $25, except for $24.50 in Lakeland, Florida.
The Zoo TV Tour began February 29 in Lakeland where the group rehearsed for a week and wound down in Vancouver, Canada, on April 23. In total, the 32 shows in 30 cities had 31 sell-outs -- the San Diego Sports Arena missed by a mere 84 seats of selling out. The Zoo TV tour grossed $13,186,962 in North America, attracting 534,261 fans.
The operative word is "gross." When a band performs in a theatre, arena or stadium, it has to rent the venue on a four-wall deal, which means that the band has to pay for all expenses associated with the concert, including rent, sound and lights, staging, stagehands, labor, security, ushers, insurance, catering, limos, cleanup and other costs. In major markets with high rentals and high labor costs, most bands strive to take home 35 percent of the gross, while in smaller markets with a cheaper rent and reasonable labor charges, the band can take home up to 70 percent.
But that is just the start of the expenses. The booking agent usually gets 10 percent (although some superstars only let their booking agency realize five percent or less) and then there is management's commission as well as the legal and business manager's fees or points (percentages). The band still has to pay transportation, room and per diems to a slew of traveling road crew that goes from city to city.
On the road, U2 and its essential entourage travel by a chartered jet leased from the luxurious MGM Grand Air where in the front of the cabin, one sits in comfortable leather swivel chairs or can lie down in a cabin at the rear or stand at a long bar down one side of the interior. And U2 is staying at the best four star hotels in each city rather than employing one city as a hub.
As soon as the Zoo TV Tour concluded in North America, U2 announced its European tour, 25 indoor shows from May 7 through July 18. And, at the same time, the group started to put tickets on sale in select markets for its summer stadium tour, Zoo TV Outdoor Broadcast. Those tickets also went like hotcakes, selling out Giants Stadium in 20 minutes, resulting in an unadvertised show to be quickly added that also sold out five hours later for a total of 115,000 tickets in New Jersey that day alone!
U2 will tour North America for ten weeks, starting at Giants Stadium on August 11, with the tour concluding right before Halloween. There is also speculation that U2 will perform six shows in the New York Metropolitan area alone.
U2's manager Paul McGuinness is an outspoken advocate against ticket scalping and extreme precautions were taken to try to make sure that tickets did not reach the hands of scalpers. For the indoor dates all ticket sales were done by telephone, and to try to insure that there were no repeat buyers, credit cards numbers were run through a computer and repeat requests were thrown out. Of course, there was still scalping since each buyer could purchase up to four tickets. The New York Daily News reported that a block of center tickets near the stage was scalped at $650 per seat, while reports of $1,200 a ticket in Los Angeles were heard.
Once, inside the area, U2 fans had a chance to choose from a slew of merchandise, including a packet of two U2 condoms for two dollars, easily the best selling item. At New York's Madison Square Garden one could drool over U2 jogging pants ($35), oversized T-shirt ($28), pocket T-shirt ($25), white T-shirt ($3), black T-shirt ($23), event T-shirt (New York) ($23), baseball cap ($18), kids' T-shirt ($15), bandana ($10), program ($10), poster ($8), pin ($7) and button ($5). With merchandise reportedly ranging between $6-12 per concertgoer and with U2 taking home between a reported 30-35 percent of the merchandise gross per concert, U2 cleaned up in merchandise sales, probably in the area of $4 million.
U2 has been touring in support of its most recent album, Achtung Baby, which was released last November 19. It was quickly certified gold (500,000 copies sold), platinum (one million copies sold) on January 21 of this year. However, the record stalled somewhat and did not reach double platinum until March 3. By the end of April, it had just attained triple platinum status.
PolyGram, which owns Island Records, U2's label, set a goal of seven million domestic copies earlier this year; U2's The Joshua Tree sold five million domestic copies. It should also be noted that U2, at one time, reportedly owned 20 percent of Island Records, which was later sold to PolyGram Records a few years ago for a reported 300 million. U2's share would have been $60 million!
© Hit Parader Publications, Inc., 1992. All rights reserved.