Irish rock legends U2 have cashed in $25 million (£16.1 million) worth of shares in Live Nation, the company which handles their tours, merchandising and sponsorship.

The sale leaves Live Nation nursing an immediate $19 million loss because it guaranteed the band a share price much higher than today's level. It had promised U2 would get $25 million for its 1.6 million shares which are actually only worth $6.1 million.

U2 signed up with Live Nation in March of this year in a 12-year deal worth a reputed $100 million including the "sweetheart" shares element.

Live Nation shrugged off the loss, saying the deal represented its long-term faith in U2 and that it "looks forward to monetising our investment in U2 next year".

Madonna has a similar $25 million option to sell shares in Live Nation in April next year. Since she joined the management company signing a 10-year deal worth $120 million in October 2007 Live Nation shares have fallen by 83%.

Live Nation chief executive Michael Rapino told the Wall Street Journal: "Madonna and U2 are the only two deals that contained this kind of provision. The Madonna business is great."

Madonna's current "Sticky & Sweet" tour is her first under the Live Nation banner.

U2 are due to release their 12th album early next year which will be followed by a world tour which is when Live Nation expects to start recouping its money. In the menatime the management company will make up the balance of the $19 million on the shares deal through cash in hand and borrowings.