The funding for the deal is not related to savings Bono hopes to make after U2 pulled some of its financial operations out of Ireland to reduce its tax bill in the Republic, a move criticised by an Irish Government source.
Bono is one of six partners in the Elevation consortium – named after a U2 album – which has paid an estimated $300M to own 40% of Forbes Media, according to reports.
The Forbes publishing empire, which includes the 89-year-old Forbes magazine and forbes.com website, was owned by former U.S. presidential candidate Steve Forbes, his three brothers and one sister who inherited it from their extravagant father Malcolm when he died in 1990.
Elevation’s stated strategy is to help established media companies utilize new media, while Steve Forbes said that the decision to bring in a new investor was driven by massive changes in the publishing world, where more readers are using the internet and other channels to seek news.
“This investment by Elevation Partners will now accelerate our pursuit of a number of very exciting opportunities for growth,” said Steve Forbes, the Forbes president and chief executive. The Forbes family will continue to hold executive positions after the deal.
Bono is one of six partners at Elevation, including Fred Anderson, the former chief financial officer of Apple Computers, and financiers Bret Pearlman and Roger McNamee. The Irish rock star – who chose his stage name from a Dublin-based hearing aid company Bonovox and whose real name is Paul Hewson – is not believed to have been directly involved in the talks that led to the Forbes deal.
“The web has disrupted traditional business models in the print world. Forbes is poised to take advantage of a huge opportunity,” said Elevation partner Roger McNamee. He said the consortium was delighted. “We are like a kid in a candy store,” he added.
Forbes is known for its rich lists and lavish property profiles, and its celebration of wealth and capitalism. As such, it’s not an apparent easy fit for Bono, who has become known as a champion for the alleviation of Third World poverty. But there’s no conflict, according to McNamee.
Bono was drawn to Forbes because it “has a point of view” and “that he drove this part of the discussion and likes…that there has been a consistent philosophy throughout its history,” McNamee said.
Forbes, like other publishers in the print media, has suffered from declining revenues and lost advertising, but has been aggressively establishing an internet presence.
Some of the huge cash injection will go into the business, but the family could see themselves inching up the rich lists too as they will pocket some of the cash. “Yes, it has increased family liquidity,” Mr. Forbes said in a statement.
The move comes as reports emerged that U2 has transferred some of its financial operations from Ireland to the Netherlands to reduce its tax liability.
A tax exemption for artists introduced by the late Charles Haughey was modified last year by the Republic’s finance minister Brian Cowen, over concerns that super-rich rock-stars were benefiting excessively with some paying no tax. The minister introduced a cap on tax-free incomes of