No Money on the Horizon for U2

When U2 takes the stage of the Rose Bowl on Sunday night, the Irish band will have performed 42 shows on its "360°" tour. They will have played in front of almost 3 million fans, broken dozens of attendance records and grossed close to $300 million.

They will have drawn rapturous reviews, made the cover of Rolling Stone and given the troubled concert business a gigantic shot of adrenaline.

What they won’t have done is make any money.

The U2 tour is so elaborate, its 170-ton, $40 million, four-pronged stage so enormous, its overhead so costly that the band has been on the road for four months just to cover its startup costs.

They’re finally on the verge of hitting the break-even mark -- just in time to shut down for the winter, because the weather’s getting too cold for outdoor shows and their stage is far too big for indoor arenas.

Even when the band heads back out next spring and starts earning a profit, they’ll be burning $750,000 a day in overhead as three separate models of the biggest stage in rock history hopscotch around the world, each attended by a separate crew and each requiring close to two full days just to dismantle.

The financial picture is not completely unprecedented -- the most extravagant of U2's past tours, such as the "Zoo TV" and "Pop Mart" excursions in the 1990s, also took some time to break even -- but the band has never before had to work for this long before seeing a profit.  

And their two previous tours in this decade were relatively stripped-down affairs that took place mostly in indoor stadiums and didn't require anywhere near as much overhead.  

This extravagance comes in an economic climate that argues against grandiose undertakings. And it comes at a time when U2’s latest album, “No Line on the Horizon,” is suffering from the effects of the record industry meltdown.

The album’s first two singles weren’t hits, its songs aren’t getting the radio airplay of past smashes like “Vertigo” and “Elevation,” and overall sales have been slow. Released in March, it took seven months to reach sales of 1 million, a significant disappointment by usual U2 standards.

In the past, it wasn't unusual for a band to lose money touring because the shows would help boost record sales, where the real money was made.  But these days, with music sales a digital catastrophe, the reverse often is true: You put out CDs that won't make money so that you can earn your living on the road. 

So U2 is flying in the face of conventional wisdom by launching the most expensive tour in history during the worst economic climate in decades. At a time when their sales figures would argue for a no-frills show to maximize the profits they aren’t getting from music sales, they decided instead to go for broke.

Are these guys nuts?

In a way, yes. “Will it sell out? Who knows?” drummer Larry Mullen Jr. said to Rolling Stone before the tour began. “Will the economic woes have an impact? Probably.

 

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