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How Did U2 Get From Island to Mercury?

It was recently announced in the U.K. press that U2 have left Island Records for Mercury. Fans probably don't follow the business side of U2 very closely. Let's face it, this stuff isn't very glamorous and can get confusing. So how did U2 get from Island to Mercury records? First, this change really only affects the relationship between U2 and Island records, their label for the past 27 years, in the U.K. In the U.S., U2 left Island for Interscope in 1998. Throughout the rest of the world, U2 is marketed and distributed by Universal Music Group, the parent company of Island, Interscope, and Mercury.

How did U2 get from Island to Mercury? Let's look back at where this all started.

In March 1980, U2 signed their first contract with Island Records man Nick Stewart in the ladies restroom at The Lyceum Theatre in central London. U2 have frequently said they owe their career to Island and that its founder, Chris Blackwell, was instrumental to their career. Paul McGuiness in U2 by U2 said "Chris Blackwell was very smart, very worldly, a great ally for U2. He picked up on the intelligence of the band, and the commitment they showed. He quotes back to me something I apparently said to him in those very early days: 'We're not in the record business. We're in the U2 business, which is different.' And he agreed -- he saw the bigger picture."

In 1986 Island was facing bankruptcy, record sales were in a slump, and Blackwell had leveraged the company to finance a new film production and distribution company, Island Alive. U2 was finishing up work on The Joshua Tree when they were told Island was in big trouble and couldn't pay the band money already owed to them which, according to Bill Flanagan's U2 at the End of the World, was $5 million dollars. After some savvy decision-making, U2 agreed to bail Island out. U2 entered into a deal with Chris Blackwell, loaning additional cash beyond the amount that was already owed them. In return, he repaid U2 by increasing their share of the royalties and by returning ownership of U2's master recordings to the band. Blackwell sold Island Records to PolyGram in 1989. Blackwell stayed on as CEO of PolyGram's Island Entertainment division through 1997. Some reports claim Blackwell resigned; others claim he was fired.

In the fall of 1998, Seagram purchased PolyGram and merged it into Universal Music Group.

The Best of 1980-1990 collection would be U2's last release on Island in the U.S. and was credited to "Island, just off the coast of Polygram." Just after the Best of release, reports began to surface that U2 would move from Island to Interscope in the U.S. Universal Music Group was going through a significant amount of downsizing in an attempt to make the company the largest and leanest music conglomerate in the world. Heading up that reorganization, in part, was Interscope President Jimmy Iovine, who produced both Rattle and Hum and Under a Blood Red Sky. The L.A. Times reported, "The band has a great relationship with Jimmy, so it's a natural evolution for U2." Other reports indicated U2 wanted stronger marketing and promotion campaigns and felt Interscope would deliver a bigger push than Island. Though U2 remained on Island records in the U.K. and Ireland, the first U.S. release on Interscope was U2's All That You Can't Leave Behind. However, some of the early pressings were credited to "Interscope/Island Records."

After U2 moved from Island to Interscope, Universal Music Group put the Island brand in the control of three divisions: one in the U.K., one in the U.S., and one in Germany. In each territory, these companies were merged under umbrella groups. In the U.K., Island and Mercury merged to become divisions of Island Mercury Group. In Germany, Island and Mercury merged to become divisions of Island Mercury Label Group. And in the U.S., Mercury dissolved, and Island and Def Jam Recordings merged to become divisions of Island Def Jam Music Group. Island as U2 knew it was no more.

Which brings us up to date, October 2006, U2 switches labels in the U.K. from Island to Mercury. U2 will remain under the same umbrella, since both labels are owned by Universal Music Group. Early reports are claiming the reason U2 have made the move is so the band can continue to work with Jason Iley, the former general manager of Island Records U.K. Iley left his position at Island in May 2005 after he was appointed managing director at Mercury. Since then he's been promoted to president. A report in the October 8th edition of The Independent said, "Their closest ally at the label, the former general manager Jason Iley, was appointed managing director of Mercury Records last year, and the band have now followed him there." A similar report posted on Virgin.net said, "U2 are keen to continue working with Jason Iley, who switched from Island to Mercury to become their President earlier this year...this is thought to have motivated U2's decision." Over the course of their career, U2 have shown incredible loyalty to their colleagues and business associates and this would seem like another demonstration of their loyalty.

U2's first release through Mercury is believed to be The Saints Are Coming, a benefit single recorded with Green Day.

© @U2, 2006.