With or without him: ‘Fifth member’ of U2 quits after 35 years of managing world famous rock group

Paul McGuinness is to hand the running of the band to Madonna's manager
The man Bono calls U2's fifth member reportedly takes a 20 per cent stake
On McGuinness' watch the band has sold more than 140m records
He is selling his management company in a deal worth an estimated £18.7m

PUBLISHED: 08:18 EST, 16 November 2013 | UPDATED: 08:43 EST, 16 November 2013

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U2 manager Paul McGuinness has announced he is stepping aside after 35 years at the helm of the world famous band.

The unofficial fifth member of the Irish rock group is also close to selling his management company, Principle Management, to Live Nation Entertainment.

The New York Times said Madonna's manager, Guy Oseary, is set to take over as U2 manager.

Retiring: Paul McGuinness, pictured here with his wife Kathy Gilfillan, as well as Bono and his wife Ali Hewson

Retiring: Paul McGuinness, 62, pictured here with his wife Kathy Gilfillan, as well as Bono and his wife Ali Hewson

McGuinness has managed U2 since 1978, two years after four Dublin teenagers - Paul Hewson (Bono) on vocals, David Evans (The Edge) on guitar, Adam Clayton and Larry Mullen on drums - formed a band.

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Under McGuinness' control U2 has gone on to sell in excess of 140 million records and win 22 Grammy awards.

The band's last tour, called 360, grossed more than £438m in ticket sales and was seen by nearly seven million people around the world.

Legacy: Retiring manager Paul McGuinness is credited with keeping U2 from breaking up early on in their career

Top of their game: U2, performing here in 2010 in Germany, have sold in excess of 140 million records and won 22 Grammy awards

McGuinness founded Principle Management in 1982 and became one of the most highly-rated executives in the music business. His client list also included PJ Harvey, The Rapture and Paddy Casey.

In 1979, the year the band released their first single, Bono proclaimed: 'We're not going to let people rip us off, we want the money.'

Bono has often called McGuinness U2's fifth member, and he has reportedly taken 20 per cent of the band's income.

While other bands in the 1960s and 1970s were ruthlessly exploited or suffered at the hands of their larger-than-life managers, McGuiness was scrupulously fair with U2 and ensured they were never ripped off.

A journalist from Hot Press, Bill Graham, persuaded McGuinness to become the band's manager, after they had performed a gig in Dublin in 1978. Back then, he was a film technician and his only prior experience was of managing a little-known Irish folk band Spud.

McGuinness always vowed he did not influence the band's artistic direction. But he did exert some crucial influence in 1981 after Bono, The Edge and drummer Larry Mullen Jr became born-again Christians and told McGuinness the band was finished.

Legends: at the 2011 Q awards the band was honoured as the greatest act of the past quarter of a century

Going global: pictured here in Sweden, U2 have won over audiences around the world

Wowed at the wall: As a prelude to Berlin's Fall of The Wall celebrations in 2009, U2 gave a free performance at Brendenburg Gate which formed part of MTV Europe Music Awards

McGuinness appealed to Bono's conscience, reminding him how much other people had spent on their forthcoming tour of the US. It worked, and the band went, and kept going back over the years.

But one piece of McGuinness' advice that Bono has ignored is his view that artists should describe problems, not get embroiled in fixing them.

Bono has lobbied the likes of President George W Bush and Vladimir Putin to urge them to cancel developing nations' debts. But in 2006 it emerged that U2's business transactions had been shifted to the tax-free Dutch holding company Promogroup - a move McGuinness helped to bring about. That revelation left Bono open to the charge of hypocrisy.

Commenting on his forthcoming retirement, McGuinness, 62, said was delighted that Live Nation has joined him in creating a powerful new force in artist management.

Distinctive: U2's 2009 Wembley gig was attended by a record-breaking 88,000 people and featured a giant spaceship-style claw over the stage

Making music history: Bono and bandmates took to the stage for the Make Poverty History concert in London's Hyde Park in 2005 that urged G8 leaders to cancel developing nations' debt, improve aid and make global trade rules fairer to poor nations

'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 'n' roll code of conduct,' he told the New York Times.

'As I approach the musically relevant age of 64 I have resolved to take a less hands-on role as the band embark on the next cycle of their extraordinary career.'

Good causes: Bono has been associated with a host of charitable causes. But details of U2's tax affairs left him open to charges of hypocrisy

Good causes: Bono has been associated with a host of charitable causes. But details of U2's tax affairs which emerged in 2006 left him open to charges of hypocrisy

Live Nation, which owns Ticketmaster, is in talks to buy Madonna's management company Maverick.

The move will result in Madonna's manager, Guy Oseary, taking over the management of U2 and day to day running of Principle, while McGuinness will become chairman of Principle Management.

Live Nation is due to issue a statement on the deal, which is worth an estimated 30 million US dollars (£18.7m).

What a line-up: U2 were the supporting act when The Police performed at the International Stadium, Gateshead, in 1982

Hair to stay: Bono shows off his mullet at a 1985 performance in Milton Keynes

Hair to stay: Bono (left) shows off his mullet at a 1985 performance in Milton Keynes

In the beginning: U2, young and fresh-faced in Dublin in 1978

Before the big time: Bono said at the outset he didn't want anyone to rip them off, and McGuinness ensured that never happened

In 2008, Live Nation struck a deal with U2 to handle the band's touring and merchandising exclusively for 12 years.

According to Pollstar, a concert industry trade magazine, the top 10 highest-grossing tours include four by U2 and one by Madonna.

McGuinness has received many international awards including Pollstar Personal Manager of the Year and a Lifetime Achievement Award from the Irish music industry in 2002, and the Peter Grant International Manager of the Year Award in 2006.

In 1999, together with U2, he received the Freedom of the City of Dublin.