Branson

Branson Tom Bower The sensational critical biography of this phenomenal entrepreneur and his business practices – fully updated to cover Branson’s recent ventures.No British tycoon is more popular, few claim to be richer and none has masterminded a more recognisable brand than Richard Branson. What is behind the success of the buccaneering balloonist, the tabloids’ favourite celebrity nude, the ‘grinning jumper’ and the scourge of corporate goliaths?Helped by eyewitness accounts of more than 250 people with direct experience of Branson, Tom Bower has a uncovered a different tale to the one so eagerly promoted by Virgin’s publicists. Here is the full story of Branson: his businesses, his friendships, his ambition, his law-breaking, his drug-taking, his bullying. From the cockpit of a balloon in the clouds to the centre of Branson’s operations in his Holland Park home this book is an intimate scrutiny of exactly how Richard Branson created himself and sold himself. Tom Bower’s biography reveals Branson to be a single-minded profiteer who, while occasionally generous to others, has a fixed purpose to enhance his family’s wealth in secret off-shore trust funds. Instead of a glittering saint, Branson emerges as a devious actor, proud of plucking for his own profit the good ideas of others.From his quest to acquire the license for the National Lottery to his plans to launch space tourism with Virgin Galactic, this fully updated edition follows Branson’s enterprises and investments up to the recent, failed bid for Northern Rock. TOM BOWER BRANSON Dedication (#ulink_f57e667b-29da-5faa-b1f6-3b4f98f0db6b) To Jennifer Contents Cover (#uefc07459-e04f-5ca9-9c43-d44f628f3d73) Title Page (#u2ce86186-d5cb-5744-9f97-a5a375377b5e) Dedication (#u01036e32-eb98-5c2c-b7bc-0dcbd22f68ce) Preface (#u806dac5f-4b64-58ce-b7c8-e7e761cb5cdc) Preface to the 2008 edition (#u749d0396-5ed9-5c1c-a87f-63264dc22a30) Introduction (#u5564ba23-6731-5364-8828-f4f012cdcb8f) 1 The crime (#u66c213d2-bb0a-5b6d-9639-f296be83a355) 2 The beginning (#ub5d79da8-3ec5-5803-9e45-13b09088faf5) 3 Honeymoons and divorces (#u6ac7acfa-f7c8-5eeb-bcad-64c52b16765a) 4 Frustrations (#uec038c54-32d5-59e4-8bb1-3f1a07a1c90c) 5 Dream thief (#ud589998e-333d-5e57-be31-372d97acc211) 6 The people’s champion (#ubfef9dbb-5165-5bb3-b9f1-58d1c93ed6a1) 7 Confusion and salvation (#u1b093793-564b-5cf4-b41a-ce9010ca296f) 8 Returning to the shadows (#u7b746616-87e7-5de5-ad57-c31eb4655aaf) 9 Finding enemies (#litres_trial_promo) 10 War and deception (#litres_trial_promo) 11 Sour music (#litres_trial_promo) 12 Double vision (#litres_trial_promo) 13 Unfortunate casualties (#litres_trial_promo) 14 The underdog (#litres_trial_promo) 15 Another day, another deal (#litres_trial_promo) 16 Another day, another target (#litres_trial_promo) 17 The cost of terrorism (#litres_trial_promo) 18 Sinking with dinosaurs (#litres_trial_promo) 19 Honesty and integrity (#litres_trial_promo) 20 Indelible tarnish (#litres_trial_promo) 21 A slipping halo (#litres_trial_promo) 22 Fissure (#litres_trial_promo) 23 Squeezing friends (#litres_trial_promo) 24 ‘House of cards’ (#litres_trial_promo) 25 Seeking salvation (#litres_trial_promo) 26 An enduring suspicion (#litres_trial_promo) Postscript – 2008 (#litres_trial_promo) Sources (#litres_trial_promo) Index (#litres_trial_promo) Acknowledgements (#litres_trial_promo) About the Author (#litres_trial_promo) Other Works (#litres_trial_promo) Copyright (#litres_trial_promo) About the Publisher (#litres_trial_promo) Preface (#ulink_2c9e3275-6924-5699-9f69-93a9f91f3abd) On 16 December 1998, Sir Richard Branson was preparing to set off from Marrakesh in an attempt to become the first person to circumnavigate the world in a hot-air balloon. Over the previous days I had sought to join his party in Morocco to witness a Branson extravaganza. I was still undecided whether to write a book about Branson but expected that the experience might influence my decision. That morning, my place on Virgin’s chartered jet on behalf of a national newspaper was suddenly cancelled. To my surprise, at lunchtime the same day, I received a brutal, defamatory and untrue letter from Branson, whom I had never met, faxed by his London office. Branson alleged that he had received ‘a number of calls over the last six weeks from various friends and relatives who have been upset by your researchers/detectives’. He claimed that on my behalf these hired hands had ‘doorstepped’ a woman and uttered ‘untrue accusations that her son is, in fact, my son’. Not surprisingly, he continued, that behaviour had ‘caused a lot of upset to all the people concerned including the real father’. Since those same people were flying to Marrakesh for the launch of the balloon, he felt it would be ‘inappropriate’ for me to be present. ‘To be perfectly honest,’ he added, ‘none of them would particularly welcome it.’ Branson concluded that after the trip was completed we could discuss ‘what exactly it is you are after’. I was flabbergasted by Branson’s letter. I had never heard of the people he mentioned. I had not employed any detectives nor had I asked or heard of anyone doorstepping these people. In a faxed reply, I immediately protested. Three days later, I received a response. In an unexpected call to my mobile phone, an unfamiliar voice announced, ‘Tom, I’m sorry about that.’ ‘Who is that?’ I asked, puzzled. ‘It’s Richard,’ he replied. ‘Richard who?’ ‘Richard Branson.’ ‘But I thought you were in a balloon.’ ‘I am.’ ‘Where are you?’ ‘Dunno,’ he replied and could be heard asking about his location. ‘Over Algeria,’ he continued and then said, ‘Look, I’m sorry. When I get back, let’s meet and talk things through.’ His bizarre behaviour persuaded me that the real Branson, his methods and his operation remained, despite all the publicity, unknown. About ten weeks earlier, a tiny announcement in an obscure part of the Financial Times about a management resignation from Victory, Branson’s new clothing corporation, had alerted my curiosity. The senior director, the newspaper’s four-line report recorded, was departing after just five months because ‘there was no role for an executive chairman’. Branson’s new company, I knew, was spiralling into debt. The management change could only have been caused by anxiety. Virgin’s official denials of problems fuelled my suspicions. Hence, in January 1999, I began this book. Despite his suggestion that we should meet, I never heard from Branson personally, though I soon became aware of his attitude. Several people I approached for interviews told me that, ‘after checking’, they would prefer not to meet. I had the distinct impression that Branson or the Virgin press office was discouraging people. From other comments, it appeared that Branson was unwilling to either help or meet me. On 22 October 1999, having made substantial progress, I nevertheless wrote to Branson asking ‘whether you would reconsider your position and agree to meet?’ On 6 December, explaining that my letter had only just arrived, he replied: ‘I have been called by a large number of people who you have interviewed about me. Most told the same story, namely that you have a fixed agenda and that no amount of persuasion or argument by them to the contrary appeared to have any influence on you. As it would therefore appear that you have pre-judged me, it would seem that little benefit or pleasure would come from our meeting.’ That was, I believed, impolite and inaccurate. By then, I had interviewed over two hundred people. Many were his sympathisers. I had deliberately sought their opinions to produce an objective book. Certainly, I posed as a devil’s advocate in testing his admirers’ opinions. The technique is reliable and is even favoured by Sir Richard himself. But there was no justification for concluding that my questions confirmed prejudice. On the contrary, I had striven to understand a man who declined my attempts to meet to hear his opinions. In his letter of 6 December 1999, Branson did offer to answer any written questions and also requested to read the manuscript of the book. He would later express himself to be ‘very disappointed’ that I had not allowed him to vet and approve this book prior to publication. On 11 January 2000, I submitted nine questions. On 18 February, he sent his replies. They contained one serious error, namely about the circumstances and timing of a Japanese investment in Virgin Music in 1989. The significance of Branson’s error will become apparent to the reader at the beginning of this book. By February 2000, however, the relationship between Branson and myself had become complicated. Branson was upset by an article I had written in December 1999 in the Evening Standard about his bid for the National Lottery. He believed my comments to be defamatory. As we exchanged letters about the article and I replied to his threat of commencing legal proceedings if I failed to publish an apology, I was reminded about his letter to the Spectator on 28 February 1998 protesting about another journalist, where he recorded, ‘I have never sued anyone to suppress criticism of myself or Virgin.’ Two years later, on 22 March 2000, that boast became redundant. In an operation seemingly co-ordinated with The Times, a leather-clad motorcyclist served a writ issued by Branson while I was answering questions from a journalist who happened to telephone at the precise moment the writ was served. Branson’s action was considered of such importance that The Times prominently reported the writ on its front page the following day. Of the many unusual aspects of Branson’s resort to legal action, few were more significant than his decision to sue me exclusively and not, as is customary, also the newspaper which published the article. Branson’s decision to deliberately exclude the newspaper was interpreted by my legal advisers as an attempt to undermine the publication of this book. The plan was obvious. Confronted by the impossibility of matching Branson’s self-proclaimed fortune to finance a team of lawyers, I would have been forced to capitulate and apologise, and inevitably discredit my own book. Fortunately, Max Hastings, the Evening Standard’s editor, pledged in a prominent article to finance the defence of the piece which his newspaper had published. At the time I wrote this book, there had been two biographies and one autobiography about Richard Branson. All three benefited from Sir Richard’s vetting and approval. I resisted that blessing. This book is offered as a balanced review of Britain’s most visible entrepreneur, an eager recipient of hero worship, trying to influence practically every aspect of British society, who, in his attempt to market a Virgin lifestyle, seeks the widest possible circle of influence. Preface to the 2008 Edition (#ulink_7cdbe333-0197-5d7d-8c8a-1510e9ef93a2) Sir Richard Branson did not appreciate this unauthorised biography when it was originally published in 2000. Indeed, to prevent its publication, he took exception to a critical article which I had written for the London Evening Standard about his first bid for the National Lottery, and decided to issue a writ for defamation against myself, but not against the newspaper. Some interpreted this as an attempt to put me under financial pressure to settle the case in his favour. Had it succeeded, the credibility of this biography would have been destroyed even before its publication. Eventually, without my having offered any concession or agreeing to any of his demands, Sir Richard withdrew his complaint and his case was abandoned. The legacy was twofold. The rulings by Mr Justice Eady and the Court of Appeal during the lengthy hearings of Branson vs Bower have become enshrined as a cornerstone of British libel law. Newspapers, publishers, journalists and authors are, in some circumstances, now protected in publishing critical comment so long as the author wrote in good faith. The second legacy was the generation of enormous publicity, which propelled the success of this book. Following his recent successes in the libel court, Sir Richard had apparently anticipated another scalp. Yet over the following months many concluded that he had scored a spectacular own-goal. Throughout the world, those interested in the Branson phenomenon were alerted to an alternative interpretation of a remarkable career. Over the past eight years I have received a steady stream of enquiries and congratulations as a result of this biography of the controversial tycoon. With some nostalgia I recall listening to BBC Radio 4’s World at One and hearing Sir Richard’s triumphant boast outside the Royal Palaces of Justice in Fleet Street after his libel victory against Guy Snowden, the chairman of Camelot, a rival bidder for the original lottery licence. ‘My mother taught me to always tell the truth,’ Branson told his excited audience. This book was to cast an objective interpretation on his career just as his bid for the National Lottery was being reconsidered after a bitter court case. To Branson’s distress, the original decision to award him the lottery licence was overturned. Partly, he knew, this book’s revelations had turned opinion against him. Now, eight years later, Branson’s recent activities, self-promotion and solecisms, especially during his bid for the distressed bank Northern Rock, have warranted an updated version of the original book. Over the past eight years I have occasionally been invited to write articles for newspapers about Branson. Each article automatically provokes Branson to complain about ‘multiple inaccuracies’ and demand the publication of his version of the truth. Invariably, identical facts provoke starkly different interpretations. My articles published during his bid for Northern Rock especially provoked his ire. I did not think that his controversial past justified the government’s original decision to entrust over ?50 million of taxpayers’ money to the Virgin group. For whatever reason, the government finally agreed with me. The loss of Northern Rock could be as grave a blow to Branson’s fortunes as his failure to win the Lottery licence. Sir Richard nevertheless remains one of the world’s most popular tycoons. Countless ambitious and intelligent young people, aspiring to become successful businessmen, voraciously read his autobiography and other publications in their attempts to understand the secret of his success. If they believe that his version is the Holy Grail, they are mistaken. During my own career following the lives of other tycoons including Robert Maxwell, Mohamed Fayed, Tiny Rowland, Geoffrey Robinson and Conrad Black, one common denominator has always emerged. An important element of their success has been the myths generated to conceal their aggressive journeys up the greasy pole. Similarly, once they bask in the spotlight, they share a brazen aggression to maintain their version of the ‘truth’ against those posing honest questions. However outstanding a personality Branson may be, he is weakened by his forceful attempts to silence his critics and his victims; and it is the latter, his hapless business partners, who remain frustrated by his remorseless success. Eight years ago, Branson had reached a precipice, and his empire’s prosperity was endangered. Brilliantly, his juggling snatched victory from possible defeat. Now, once again, his fortunes are challenged. Whether he can stage another resurrection is a tantalising question. The Branson rollercoaster never stops. Tom Bower London, July 2008 Introduction (#ulink_8caa4dc9-adf5-5798-9ff8-e9511a307265) In early June 1988, Ken Berry, a discreet director of the Virgin Group, arrived in Tokyo on a secret assignment. Berry, a deal-maker trusted by Richard Branson, was searching for $150 million. Although Virgin Music was a publicly owned company, Richard Branson preferred not to reveal Berry’s mission to his British shareholders and his two non-executive directors. Berry had arranged to meet Akira Ijichi, the president of Pony Canyon, a subsidiary of a giant Japanese media company. Their introduction at the Intercontinental Hotel in the Shinjuku district lasted two hours. ‘This meeting has got to remain secret,’ stipulated Berry. Ijichi nodded his agreement. Berry continued: ‘Virgin needs money to expand. We’re looking for $150 million.’ That was not the complete reason for Berry’s search for money. Three months later, in September, Akira Ijichi arrived in London with his translator Moto Ariizumi, a junior executive in the company. Both stayed at the Halcyon Hotel, in Holland Park, conveniently close to Branson’s home. By then, their New York bankers had undertaken an external examination of the Virgin Group’s business and finances. Negotiations, the bankers had suggested, should start at $125 million for a 25 per cent stake. Berry, a natural deal-maker, could sense Ijichi’s enthusiasm. The Japanese was flush with cash. During their discussions in Virgin’s offices on the Harrow Road, Berry emphasised on several occasions, ‘We don’t want any publicity. We don’t want the shareholders to know.’ The secrecy suited the Japanese: they wanted the deal to succeed. Later, at the end of their second day in London, the two Japanese met Richard Branson for dinner at his home. Their host was charming but firm: ‘The company’s worth $600 million. Not a dollar less.’ Ijichi nodded. The following morning, the two Japanese were welcomed by Branson on his houseboat in Little Venice. Amid the stripped pinewood floors, cane furniture and leafy plants Branson shone, in Moto Ariizumi’s opinion, as a ‘quite extraordinary but fashionable’ representative of the alternative culture. Before their departure, Akira Ijichi agreed to pay $150 million for a 25 per cent stake although several important details remained unresolved. Branson and Berry were untroubled by the delay. In the meantime, Branson had dramatically announced his decision to privatise the Virgin Group. His unexpected decision to buy back the shares from the public had caused considerable surprise although everyone was grateful that he valued the Virgin Group at ?248 million, double the stock market’s value. However, when Virgin’s shareholders met in November 1988 to formally approve Branson’s proposed privatisation, neither the shareholders nor Virgin’s two non-executive directors were aware of Berry’s continuing negotiations with the Japanese. If the shareholders had known about Pony Canyon’s agreement that the Virgin Group was worth $600 million, or ?377 million – ?129 million more than the sum offered to shareholders – they might have demanded that Branson buy back the shares at the same valuation. Pony Canyon’s investment was formalised in May 1989. The public would remain unaware that the relationship had been initiated before Branson’s announcement of the privatisation. Within two years, Virgin’s status would be utterly transformed. Branson was hailed as a genius after selling Virgin Music for ?560 million or $1 billion. Since his deal with Akira Ijichi, Branson had doubled his fortune and become one of a rare breed: a legend in his own lifetime, an icon and a billionaire. Eight years later, on 8 November 1999, Branson was invited as a British hero to deliver a Millennium Lecture at Oxford University. The Examination Room was packed with admirers, students and elderly academics. Mr Cool Britannia, the blameless face of New Britain, was introduced by Lord Butler, the former Cabinet Secretary, as ‘a lighthouse for enterprise who owns 150 companies and all of them are profitable’. Branson, dressed casually in his characteristic pullover, smiled. He knew that Butler’s praise was inaccurate. With the exception of his airline and rail franchises, all of his major companies in 1999 were trading at a loss. Branson was rarely asked to face unpleasant contradictions. Voted Britain’s favourite boss, the best role model for parents and teenagers, and the most popular tycoon, he was widely admired by most Britons. Branson, the public believed, was at heart a charitable public servant whose companies just happened to earn handsome profits. Idealism was his business. The opening of Branson’s sermon to his young idolaters in Oxford emphasised the irrelevance of education. Only those rejecting university would become millionaires, he preached. His second theme foretold the future of industry: it was dead. ‘Don’t go into industry to make money,’ he urged. Manufacturers with assets would soon be worthless. ‘Focus on customers,’ was his gospel. Only brands would be valuable in the future. ‘I believe there’s no limit to what a brand can do,’ he enthused. Expertise was also worthless: ‘If you can run one business, you can run any business.’ He personally had known little about the music and airline businesses, the sources of his two fortunes, which naturally led to his third article of faith urged on his audience: ‘get the right people around you and just incentivise them’. His secrets of success were bold and liberating to an audience unaware of Branson’s increasing inability to attract and retain the brightest young brains. His admirers in the audience sought from Branson an inspiring vision for his personal and Britain’s future prosperity. ‘What,’ one asked, ‘is your major ambition in the new millennium?’ The hero paused. Bill Gates would have anticipated the next generation of developments of the computer and the internet. Rupert Murdoch, whom Branson once aspired to overtake, would have expounded the future of global communication. But Branson avoided such complicated speculations. The icon’s face assumed the countenance of destiny as he intoned his reply: ‘To run the national lottery.’ Branson gazed thoughtfully across the hundreds of placid faces, unaware of the frisson of disappointment which enveloped his audience. Aspiring tycoons in the hall, regarding Branson as a model for ‘shaking up industries and offering a better product’, were fed a simplistic, reductive homily from Britain’s greatest entrepreneur. To create real wealth, they were urged by the acceptable face of capitalism, rely on a label. Ignore education, ignore expertise and ignore technology. In a citadel of academic excellence, Branson had preached anti-knowledge. The new generation, he urged, should believe that sustainable businesses could be created without ‘a great business plan or strategy. Just instinct.’ The generational division among those inside the Examination Hall was blatantly evident. To those dozens of students, eager to shake their hero’s hand, proffering scraps of paper for his autograph, Branson’s self-generated image of a buccaneer bestriding his own world was laudable. They admired the champion of the underdog who advertised himself as a product. He was the admirable, fun-loving millionaire. The older, more sceptical members of the audience, as they slipped out of the hall for a glass of sherry in the Master’s lodgings, mentioned a fallacy. Unlike Bill Gates, they murmured, Branson’s fortune was forged on old ideas that ignored innovation. The result was, they sniffed, self-evident. While Bill Gates’s fortune was valued at $100 billion and constantly rising, Richard Branson’s wealth was a disputed $3 billion and possibly falling. Three days later, on 11 November 1999, in Leicester Square, London, Branson was sitting on a bright red sofa in a huge Perspex container fixed on a trailer. Six naked young girls were grouped around the master of self-promotion. His latest extension of the brand was Virgin Mobile, a belated bid to join the New Economy developed and dominated for some years by Vodafone, Cellnet and others. Branson never paused to contemplate the relevance of six naked girls clutching mobile telephones to herald his entry into the New Age. Nor was he concerned that his latest marketing stunt technically broke the law. Securing free advertising in the following day’s tabloid newspapers was his sole ambition. ‘Public relations is an important part of running our business,’ Branson once explained. ‘About 20 to 25 per cent of my time is spent on PR.’ No one sold Branson like Branson. His business skills included the publicity skills of a salesman unafraid to yell for attention in a market even if, as he had confided to his Oxford admirers, he lacked any presence or expertise. Seeing a policeman striding across Leicester Square, Branson abruptly abandoned the naked girls and scurried to a waiting taxi. While the girls were ordered to dress, Branson had time to reflect that it was just another ordinary day, promoting himself and his ambitions. ‘We intend to sell 100,000 telephones by Christmas,’ he pledged that morning, emphasising Virgin’s core values of quality and fun. ‘And one million by Christmas next year.’ By January 2000, just over 100,000 telephones had indeed been sold, although the figure included 20,000 offered at a discount to Virgin employees and their families, but four weeks later Virgin’s telephone network temporarily collapsed. The Virgin brand, promoted by himself as a ‘global business’, was limping. Anti-knowledge, balanced on the edge of a financial precipice, was an uncertain guarantee for success. Later on the same day as the launch of the Virgin Mobile, Branson was swigging a bottle of beer at a good humoured promotion party for one thousand young men and women advertised as ‘Very Sexy. Very Decadent.’ A constant flow of admirers sought a few minutes in his company and the opportunity for a photograph. All were attracted by his courage, his blokeishness and his social conscience. The ‘daredevil’s’ oft repeated ambition to ‘make the world a better place’ appealed to those attracted by a pleasant, friendly and unthreatening superstar. Calmly, he stood beside his wife, Joan, personifying the Virgin Dream. At 10.15 p.m., his wife signalled their departure. Outside, a car waited to drive the Bransons to their two adjoining houses in Holland Park worth ?10 million. One house, after a recent fire, was for sale. A portent, some unkind observers carped, of the fate of a man who, after thirty years within the warm embrace of tabloid headlines, had become unexpectedly imperilled. Opportunism, luck, energy and genius created Sir Richard Branson, a man of the people, a man of conscience and a courageous adventurer. The same qualities also produced a man of controversy and cunning. Wilfully and repeatedly thrusting himself into the spotlight, the hero seeks public approval but complains about criticism. Proud to be a tycoon of our time, his appetite for profit and power created a conglomerate which he assumed empowered him to write his epitaph in his own lifetime. Instead, his future is jeopardised by his weaknesses. Almost forty years of self-glorification have taken a toll of a man seeking everlasting fame while occupying the shadows. The self-promoting blueprint for Britain’s economic regeneration offers a tawdry example of mixed blessings and unhelpful lessons. Those prying beyond his veil of secrecy find an entrepreneur unexpectedly contemplating an uncertain future. In a juggler’s career, a moment of reckoning periodically re-emerges. There was one in 2000, and another could be glimpsed on the horizon in 2008. 1 The crime (#ulink_581de370-9269-51d3-bf34-c140bd5748c0) Back in 1969, money was a singular obsession although mention of the subject was impolite. The floppy haired, nineteen-year-old youth wearing black rimmed glasses held together by a plaster, was hunting for profitable ideas. ‘What can we do?’ groaned Richard Branson. Three teenagers sat in the smoke-filled basement of a shabby house in Bayswater, London. ‘We need some bread.’ His audience drew hard on their cigarettes. John Varnom and Tony Mellor regarded the younger man as a friend, host and employer. Living with Branson, a benign sovereign, was an enjoyable self-indulgence. ‘What about records?’ suggested Varnom desultorily. The twenty-four-year-old-writer and publicist was Branson’s Rasputin and jester. ‘We could try mail order,’ sighed Mellor, a hippie with a passion for music. Branson jerked excitedly, his imagination racing. Mail order records: the idea would fill a gap in the market, a trader’s dream. There was also an angle. ‘They’ve dropped Resale Price Maintenance,’ he said. ‘What’s that?’ asked Mellor admiringly. ‘The record companies can’t fix the shops’ prices any more,’ gurgled Branson. ‘Costs nothing to put an ad in a newspaper,’ he continued, ‘and we could sell them cheaper than the shops.’ The Beatles, the Rolling Stones and the Kinks were just a blur of noise to Branson. Tone deaf and knowing little about music, he rarely listened to records. He was a doer, not a person to wait and listen. But selling cut-price records sounded as exquisite as Cliff Richard singing ‘Bachelor Boy’, his favourite. The idea had been sequestrated. A new business shimmered. ‘We’ll put an ad in Student,’ he announced. His beloved magazine, tottering towards extinction, might beget his next enterprise. Readers of Student would be offered any rock record at 10 or 15 per cent less than the shop price. ‘What shall we call the company?’ he asked. Varnom and Mellor brainstormed. Names tumbled out. ‘Slipped Disc’ was suggested and abandoned. Although he was silent, Branson’s demeanour implored his employees to produce more ideas. Varnom, lustfully contemplating the stream of nubile former public school girls who regularly passed through Branson’s squat, departing somewhat wiser about the world thanks to his attentions, laughed. ‘Virgin,’ he chortled. ‘Virgin,’ he repeated, delighted by his idea. ‘That’s it,’ gushed Branson, loving the combination of sex and subversion. ‘Great.’ The new name eventually inherited a new pedigree. ‘I thought of the name Virgin,’ explained Branson twenty-five years later, ‘while sitting in the crypt of a church surrounded by two coffins.’ Virgin Records, a mail order supplier of pop, started trading in April 1970. The advertisement in the last edition of Student magazine produced an encouraging trickle of orders with cash attached. Branson sensed the opportunity. Virgin bought whole-page advertisements in Melody Maker and other music newspapers. Dramatically, the number of orders exploded. Virgin, buzzed the bush telegraph, was cool. Supplying records at discount prices, breaking the record manufacturers’ rigid price cartel, was heroic; and selling bootleg records bought from ‘Jeff in the East End’ for 50 pence to punters for ?3 was profitable. ‘I believe in competition,’ enthused the wannabe tycoon, ‘and I believe in helping the young.’ Branson deftly borrowed the language of the Swinging Sixties and student revolution to establish his principal sales pitch. His business was to be cheaper and therefore a service to mankind. Branson was emphatic about his motives: ‘There is nothing phoney about my idealism,’ he would later insist. ‘I had a genuine belief that I should be using my skills and the resources at my disposal to “do good”.’ Doing well by doing good was a beguiling explanation except to the four men isolated in a locked room in St Mary’s Hospital, Paddington. From there they scrutinised Virgin’s new premises in South Wharf Road through binoculars. ‘Dead as a dormouse,’ cursed Mike Knox, the senior investigator for Customs and Excise. In February 1971, ten months after Virgin advertised cut-price records, Mike Knox knew that Richard Branson’s expanding enterprise was being financed by a crude fraud. Posing as an unassuming government tax clerk, Knox had invited himself into Virgin’s new warehouse. The introduction aroused no suspicion. In that era, it was normal for Her Majesty’s Customs and Excise to provide a clerk every three months to calculate each company’s purchase tax, a 33 per cent levy on all sales. Sitting in Branson’s congested first floor office, watching attractive girls flitting around their unsuspecting tousle-haired employer, Knox glanced through Branson’s accounts, especially those of Caroline Exports trading as an unregistered company. Branson, the director, was too excited by that day’s postbag containing hundreds of cheques, postal orders and cash to care for the grey man as he sifted through the PT 999s, Caroline’s purchase tax returns. His new business, Branson often chortled, was amazing. Punters’ cash was being banked for records he still did not possess. Imported American records, bought for pennies, were sold for pounds. ‘Cash flow,’ he enthused, ‘is great.’ But his aspirations were not financed entirely by conventional means. The genesis of his fraud, Branson would say, was accidental. Soon after Virgin Records’ birth, Branson himself had driven a van to Dover with a consignment of records for export. After a Customs officer had placed the official stamp on a PT 999 confirming that the records had been exported and were exempt from purchase tax, Branson had boarded the ferry for Calais. Unexpectedly, the sailing was cancelled because the French port was closed by a strike. Branson had driven off the ferry and, unhindered by officials, returned towards London. During the drive, he realised that the records could now be sold through his mail order company to British customers without adding purchase tax. The extra money would belong to him. Two tax agencies could be deceived. Customs would not receive the 33 per cent purchase tax and the Inland Revenue would be denied the tax on his additional profits. On his return to Paddington, Branson had confided his discovery to his inner cabal of six. ‘The Customs office is not near the port,’ he explained, ‘so the forms get stamped but they don’t have any barriers or checks to see if you’ve gone on to the ferry or driven back to London.’ His audience was transfixed. Branson’s conscience was untroubled by the dishonesty. Gambling against discovery was exciting. A pattern had been established that he would later describe with evident pride: ‘I have always thought rules were there to be broken.’ He had cheated in school examinations; he had repeatedly deceived the Church Commissioners, the landlord of his home in Albion Street, by disguising its use as an office; he had defrauded the Post Office by using the telephone without paying; now he was selling bootleg records; and he had just been convicted for poaching game in a magistrates court. The recent conviction for poaching had been particularly revelatory. Branson had driven in his white Mini with Mundy Ellis, his bubbly, blonde girlfriend, to stay with Caroline and Rob Gold, a music publisher, in a rented cottage in Suffolk. Branson liked the Golds and the sentiment was reciprocated. The Golds lived on a houseboat in Little Venice and Caroline had become Branson’s paid assistant, although she had become wary after Branson had unsuccessfully invited her father, Frank Gold, a shipping forwarder who owned warehouses, to become involved in his purchase tax operation. Nevertheless, the Golds felt sympathy for the young man whose twin laments were, ‘I didn’t get enough love from my mother’ and ‘How can I make money?’ Rob Gold had told Branson there was ‘some shooting in a public wood’ and Branson had brought two shotguns, an inheritance from his grandfather, Sir George Branson. Gold had never shot before but nevertheless took one of the guns as they walked in the countryside with the women trailing behind. Soon after the two started shooting, they heard yells. A gamekeeper was running from one direction and the landowner from another. Branson realised immediately that they were trespassing and ran off with the women. Gold fell and was caught. Both were charged with poaching. Two months later Branson and Gold returned to Suffolk by train to attend the Sudbury magistrates court. During the entire journey, Branson carefully read The Financial Times. At the hearing, Rob Gold noticed the clerk approach Branson. ‘I understand your father’s a magistrate?’ asked the clerk, confirming information which Branson had earlier supplied. ‘Yes,’ nodded Branson gravely. Seconds later, the clerk was whispering in the ear of the Suffolk magistrate. Watching with awe, Gold understood the social chasm separating himself from Branson, and the essence of his friend’s fearlessness. The fine was only ?10 and the confiscation of the guns. Branson smiled. This nonchalance was confusing for those unaware that behind the awkward reticence was an acutely self-confident young man, a master of exerting influence. ‘Do you realise who you are dealing with?’ Branson challenged a police officer when, shortly after, he was stopped speeding in Glasgow. A growing sense of invulnerability fed his appetite for recklessness, developed as a boy at Stowe, the public school where he was educated. Lacking any signs of self-doubt or fear of retribution, Branson showed remarkable ability to speedily bypass the truth. For him, the plot to defraud Customs and Excise was just another whacky prank. ‘It’s a great wheeze,’ he buzzed. Cheating Customs, he urged his employees, would be effortless. For a child from Surrey’s stockbroker belt evading taxes imposed by the confiscatory socialist government was an act of principled defiance. The Establishment’s rebels were sure that rules could be ignored, bent or broken. Doubters were swayed by Branson’s enthusiasm for the role of Robin Hood. Helping impoverished students hear their music despite the ogreish government’s taxation, he urged, would constitute a blow for justice. None of Branson’s merry group had ever committed a serious crime but all were mesmerised by Branson’s persuasiveness that his interests and theirs were identical, even if the scheme was illegal. Chris Stylianou, the Charterhouse-educated manager of Caroline Exports, was wary until others nodded agreement. Branson’s genius was to disguise his impatience for fame and fortune by championing the struggle of down-trodden youth. The white Transit van was driven regularly to Dover. The documents for the export of records were proffered and, after securing the official stamp on the PT 999 form from the Customs officer, driven unseen back to London. The van rarely transported the records specified on the consignment. Instead, a batch of worthless recordings of the Band of the Irish Guards was loaded. Over a period of months, Virgin’s mail-order business attracted gratitude from a growing army of music fans. By the time Mike Knox reported to his superiors – ‘Virgin looks dicey. It’s worth an operation’ – about twenty young employees, enjoying the permanent party atmosphere encouraged by Branson, were dispatching the ‘export’ records by post from the warehouse in Paddington. Among the thousands of customers were Mike Knox and Dick Brown, his deputy in the Customs investigation team, ordering records as normal customers from their home addresses. Their investigation had started after a visit to EMI’s head of security in Hayes, west London. Knox had confessed his bewilderment to the record producer’s head of security about Branson’s ability to sell his records cheaper than the shops. The former policeman employed by EMI admitted his own suspicions that ‘Something’s fishy’. ‘I’ll look at his PT 999s,’ thought Knox. Reading through the thick wodge of Customs certificates accumulated by Branson over the previous ten months, Knox noticed the official stamps at Dover testifying to his regular export of records in batches of at least 10,000 to every country in Western Europe and to the United States. Knox was particularly intrigued by two certificates. On both occasions Branson had, according to the certificate, exported 30,000 records in a Land Rover. Amid the clatter of Branson’s office, no one heard the staid ‘tax clerk’ murmur to himself, ‘You can’t load 30,000 records on to a Land Rover.’ Shortly afterwards, a surveillance unit had been established in St Mary’s Hospital, overlooking Branson’s offices. Every night at 3 a.m. over the following three weeks, Dick Brown arrived at EMI’s headquarters. Neatly stacked in the record producer’s loading bay were boxes marked for delivery to Virgin, invariably with a note on the invoice: ‘For export’. Regularly, Branson was ordering two hundred copies of ‘She’s a Lady’, Tom Jones’s hit, apparently for export to Switzerland. To monitor the fate of those records, Brown marked on each record a letter of the alphabet with an ultra violet pen, invisible to the naked eye. ‘A’ was given for the first day and consecutive letters were marked on each successive day’s consignment. The copy of ‘She’s a Lady’ delivered by post to Brown’s home from Virgin bore the ultra violet mark. At the end of the three weeks’ surveillance, Knox gazed down at the building forlornly. No Land Rover had appeared at the warehouse and no large consignment had been loaded on to the white Transit. The report sheets were blank. The only unusual activity was Branson’s departure early that morning by taxi and his return by taxi late in the afternoon. ‘I’ll phone Dover,’ groaned Knox. Unknown to Knox, Branson had refined the mechanics of his fraud. To maximise his profits, he had searched for ways to save costs. Since the frequent passage through Dover had not aroused any suspicion, Branson had avoided the expense of sending the Transit to Dover by dispatching someone to the port by train. Knox’s telephone call to Dover exposed the refinement. That same morning, Branson had presented in Dover an export certificate for 10,000 records. ‘Cheeky chappy,’ smiled the Customs investigator. ‘He went cheap, on an away-day.’ Knox decided to raid the premises after Branson submitted his next purchase tax returns. After a three-month investigation, his schedule, covering dozens of pages, listed ‘hundreds of phoney exports’ which had profited Branson the equivalent of ?370,000 in the year 2000. ‘It’s a big case,’ he concluded. An anonymous telephone call the night before the raid sparked frantic activity inside Virgin’s warehouse. The caller was a disgruntled Customs officer, jealous of Knox, warning about the plan. Before daybreak, Branson and two co-conspirators had transferred the ‘export’ records from the warehouse to the new Virgin shop in Oxford Street. Virgin’s employees arrived the following morning unaware of any tension. Even John Varnom, a member of the ‘family’, would remain oblivious about the tip-off and the night-time transfer. Branson felt no compunction to say more than necessary. He already understood the importance of secrecy in creating successful businesses. Cool nonchalance greeted the team of determined Customs investigators waving a search warrant at 10 o’clock in the morning. The ‘gangly, laid-back, long-haired lad’ with a mop of fair hair, affecting the nasal tone of Mick Jagger to suffocate his natural upper-class twang, betrayed no hint of concern. He was even, Mike Knox reflected, rather welcoming. Act One of the performance was perfect. ‘It’s all legal,’ Branson smiled benignly, showing the Customs forms stamped at Dover. ‘You won’t find any export records here.’ The same bluff used successfully at the magistrates court to minimise the prosecution for poaching, he hoped, could disorientate the investigators. ‘We personally bought these records from your mail order company,’ snapped Dick Brown waving his copy of ‘She’s a Lady’. ‘They were marked for export. Here’s the paperwork. And here’s your signature on the PT 999. There’s no doubt. Now where’s the stock?’ ‘Oh fuck.’ Branson was stunned. Public humiliation provoked tears. Discovery was not part of the plot. Tears dripped from his cheek on to his blue jumper. For once, his weakness could not be turned into a virtue. The performance was terminated. ‘We hid them in Oxford Street.’ A gulp. ‘Can I phone my mother?’ ‘There’s a bit of a problem,’ choked Branson on the line to Shamley Green, deep in the Surrey Jag and gin belt. ‘He’s as good as gold,’ decided Brown as he listened to Ricky explain his plight on the telephone. Their catch was a vulnerable, public schoolboy, ‘not the usual toe-rag but an entrepreneur, and a good bloke’. ‘Look upstairs,’ ordered Brown over the telephone to the team searching through the stock in Oxford Street. Within the hour, Branson was shown the ultra violet markings on the records brought from the West End. ‘If only I’d known,’ he spluttered, secretly angry that the records had not been destroyed the previous night. ‘You’re under arrest,’ announced Brown. ‘We’d like you to come with us now to Dover.’ ‘Oh God,’ blabbed Branson, suddenly aware of his plight. But his good humour soon revived. Searching through his desk, an officer had pulled out a half empty packet of condoms. Glancing at all the pretty young girls in the building, the officer sighed. These were not villains, he realised, but sex-obsessed hippies living on a different planet from Customs officers. His prisoner smiled. The ‘scene’ – sex, music and friendship – mitigated the gravity of his crime. His charm undermined any remaining barriers. ‘I’m starting out in my career,’ explained Branson, as the Customs official’s car crossed the River Thames heading towards the Channel port. ‘I’ve just opened one shop and I’m building a recording studio in a manor I’ve bought in Oxfordshire.’ ‘You should open shops in Bristol and Birmingham,’ suggested Brown, warming to the young man. ‘Paying your staff such low wages, you’ll be a millionaire one day.’ ‘Do you think so, Dick?’ replied Branson, breaking down another barrier. ‘My bankers are the problem. We’re always short of cash. I need a couple of guys like you in suits to work for me.’ The charm was natural. The joviality continued during an unscheduled lunch stop in a pub. Distracted by Branson’s manner, Brown allowed his prisoner to drink alcohol, a breach of regulations. An unusually warm relationship had developed despite the Customs officer’s realisation of the fundamental dishonesty of Branson’s financial accounts. Not only were the extra profits which Virgin had earned on the ‘export’ records concealed, but their American imports were deliberately undervalued to diminish import duties. ‘I just want to protect my business,’ soothed Branson, glossing over the dishonesty. ‘I’m just starting. How can I put all this right? We’re all human beings.’ In that strange British guise, his disarming performance and his social confidence bestowed a veneer of decency. The officers’ procedure could not be changed. Fearful that a hippie would disappear, they had decided upon an arrest rather than a summons. Once in Dover, there was no alternative but to place Branson in jail overnight before his appearance in court the following morning. At daybreak, the lobbying of Brown and Knox was resumed by Eve, Branson’s forty-eight-year-old mother, and the dominant influence in his life. Sitting with Ted, her husband, introduced as a barrister and stipendiary magistrate, Eve Branson glanced at her dishevelled and depressed son. ‘Now officers,’ cooed the former air hostess, ‘how can we sort this out?’ Eve’s dignity and class confirmed Knox’s and Brown’s opinion that this was an exceptional case. ‘We’d like to arrange bail,’ said Eve, ‘and settle this amicably. He’s only twenty years old. He’s been very foolish and it’s unnecessary that his life should be ruined by a criminal conviction. He’ll repay the taxes and any fine but we’d prefer to keep it out of the court.’ The absence of an aggressive solicitor and the impressive honesty of the Branson family persuaded the officers to consider a deal. ‘Have you got the money for bail?’ asked Brown. ‘No,’ replied Eve, ‘but we’ll put up our house, our only home.’ The normally cynical officers were impressed. ‘And we’ll guarantee the repayment of the taxes and the fine,’ continued Eve, ‘even if we have to sell our home.’ After a suitable pause, she added, alarmed that twenty years of loving ambition were on the verge of disintegration, ‘He’s very young. He should be given a second chance.’ Knox and Brown agreed. This was a genuine, one-off error. There would be a brief court appearance to set bail at ?30,000 secured on the family home. The young Branson would be released without further prosecution. ‘No publicity?’ urged Eve. ‘Absolutely,’ promised Knox. Customs were always discreet. In the following weeks, meeting Branson on the Duende, his houseboat just purchased for ?200 and moored in Little Venice, Brown set out the terms of the settlement proposed by his superiors. The investigations had by then revealed the sophisticated nature of Branson’s fraud. Contacting the customers across Europe and America listed on Branson’s export certificates, the investigators discovered that none of those named had ever bought records from Caroline. ‘The scam’s enormous,’ a Customs official declared. ‘You owe us ?40,000 in back taxes and we are charging a ?20,000 fine,’ announced Brown. Just after Branson’s twenty-first birthday, he owed the modern equivalent of over ?500,000. ‘I can’t afford that,’ said Branson. ‘Can I pay by instalments?’ After negotiations interrupted by tea, it was agreed that Branson would pay ?15,000 immediately and ?45,000 in monthly payments of ?3,000. His crime was too well-known to be concealed, so over the years Branson has presented his illegality as an early watershed in life. The sackcloth and ashes version is: ‘One night in jail teaches you that sleeping well at night is the only thing that really matters. Every single decision since has been made completely by the book.’ That interpretation, however, belied one of his life’s principal credos: ‘I have always enjoyed breaking the rules.’ His prescient headmaster at Stowe had noted that trait, predicting on the eve of the seventeen-year-old’s premature departure from school that Branson would either become a millionaire or go to prison. By twenty-one, he had achieved the latter, albeit briefly. ‘He appears modest,’ Mike Knox would reflect at the end of his investigation, ‘with a disarming personality offering to help everybody. But he’s got this ruthless ambition.’ Once Branson had begun to court celebrity as a millionaire tycoon, he progressively introduced distortions to minimise the gravity of the fraud. In 1984, he mentioned that he was ‘only eighteen’ when the embarrassment occurred rather than nearly twenty-one. The following year he described his ‘eighteen-year-old fraud’ as occurring ‘only three times’ before his arrest at the port on the third occasion. In 1986, he told the Sun that he escaped imprisonment, ‘by convincing the court that he didn’t know it was illegal’. Two years later, in 1988, he chose another variation for Mick Brown, his first biographer, recounting that he personally drove four times through the Customs post at Dover before he was caught. His version in 1992 conjured a sophisticated tale about shipping worthless titles and empty boxes to the Continent for ‘one month’ after discovering himself to be penniless after investing in his mail order business, his shops and the new manor recording studio in Oxfordshire. In truth, the shops and the recording studio were partly financed by the fraud. ‘I had a pile of debt and no real money,’ he truthfully admitted. By 1994, as the owner of a famous international airline, Branson excused himself from the whole enterprise saying: ‘I had not realised the rules.’ In his autobiography in 1998, Branson offered another explanation: there were only three trips, he wrote, starting in spring 1971 to cover debts of ?35,000 and ‘big operators’ were far worse. All those variations were a smokescreen. He had simply played the game and, unforgivably, he had lost. Over Sunday lunch at the manor with his staff after his arrest, Branson expounded his credo. ‘We weren’t doing any harm,’ he said. ‘No one was hurt. Customs is only an organisation. If organisations get robbed, it’s not a problem because they’ve got lots of money. Too much money, which should be handed around.’ Listening to his own espousal of the morality of the righteous underdog, Branson warmed to his theme. Hitting the big boys was justifiable because they were pirates and doing harm to the small people like Virgin. Lying was virtuous if a ‘non-profit’ group helping society was the beneficiary. His cabal did not disapprove. Deceit, they agreed, was acceptable in business. His forgery of a letter and an invoice from a non-existent American company to suggest that he was an innocent victim in the sale of bootleg records defied contradiction. Surrounded by employees who approved his dishonesty, Branson was classed as a rebel thumbing his nose at the Establishment. Taking money from the government, they agreed with Branson, was a lark and, considering all the rogues in the City, lying was not only acceptable but virtuous for the ‘victim’ and the ‘champion of youth’. 2 The beginning (#ulink_c508dbc9-7db4-50cd-8ea4-0595dc486470) The first ruse was simple and saved money. ‘Operator,’ berated the grating upper class voice, ‘I’ve put money into this pay phone and it hasn’t worked.’ ‘Sorry, sir, I’ll connect you.’ The second ruse, spoken from the telephone box, was more sophisticated. ‘I’m Richard Branson. I’m eighteen and I run a magazine called Student that’s doing something really useful for young people.’ The caller was sixteen and Student was no more than an idea. The third ruse was crude. The impatient bearer of six mediocre ‘O’ level passes, who had cheated in exams by secreting a crib sheet in the palm of his left hand, proposed that his father should write to Stowe’s headmaster explaining that his son wanted to prematurely leave the school to study law at university and enter politics. In fact, unwilling to study either for ‘A’ levels or a university degree, Richard Branson wanted to launch Student magazine. Ted Branson refused to lie but reluctantly agreed his son should leave the school. Thirty years later, journalists would, after interviewing the tycoon, mistakenly believe that the teenager had left Stowe because ‘Student magazine was successful’. The youth’s precocious confidence to make his fortune without an education owed much to an unusually dominant mother’s extraordinary gestures. ‘Find your own way home, Ricky,’ ordered Eve Branson as she pushed her four-year-old son from the car into the Surrey countryside. The mother’s lovingly reckless bravado was intended to ensure that her only son should not emulate her husband’s lacklustre career. Success as a barrister had eluded Ted Branson, despite his father’s bequest of Halsbury’s Laws of England. Eve willed her adored son to surpass Ted’s modest achievements. Maintaining the appearance of Establishment gentility was important. Dressing up and placing herself as the centre of attraction at endless social parties, Eve Branson distracted neighbours from the family’s dependence on second-hand clothes for her children and her sale of wooden tissue boxes to supplement the family’s limited finances. An extrovert and attention-seeker, she taught her son the power of presentation and self-publicity, and gave him the infallibility of fearless independence. Eve Branson aspired to rekindle the fortunes of her family, the Flindts, one hundred and fifty years earlier. Gustavus Flindt had arrived in Britain from Hamburg to work as a broker on the Baltic Exchange. Julius Flindt, one of his ten children, in turn also became a broker, as did one of Julius’s sons and a grandson, until Eve’s father broke the tradition after fighting in the First World War against his forefather’s kinsmen. In Richard Branson’s parents’ marriage, the Flindts’ trading tradition was blended with the Establishment bias of the Bransons, educated at Bedford Grammar School and in medicine or law at Cambridge. Ted Branson’s father, the Right Honourable Sir George Branson, a High Court judge, had been appointed a Privy Councillor in 1940. His grandfather and great-grandfather had been a publisher and a lawyer in India. Eve had every hope that the combination would guarantee upper-middle class Establishment respectability. Her ambitions for her only son were loftier still. ‘Ricky’s going to be prime minister one day,’ she frequently glowed. ‘Nothing but the top,’ the aspiring parent would assert, ‘is good enough.’ Neighbours recall her position under a high tree in the centre of Shamley Green which had attracted stern warnings by all the other parents, forbidding their children to climb beyond a low height. ‘Right to the top,’ urged Eve Branson as her son perilously balanced on the highest branches. ‘Higher,’ shouted the woman famous for hyperactively urging, ‘Do something, Ricky.’ Eve Branson’s emotional exhortations created an obedient son convinced he could do no wrong and that self-doubt was a sin. ‘Shyness is very selfish,’ the mother regularly admonished. ‘It means you are only thinking of yourself.’ Her son, born on 18 July 1950, was not shy but he was awkward and inarticulate. Unable to express himself, he disguised his limitations with nervous gestures and stunts to attract attention, usefully camouflaging his lust for fame and fortune. Earning money, an unmentioned topic in the polite society of the early sixties, became his dominant preoccupation. He disdained authority and intellectuals. So long as his adoring mother approved of his behaviour, he was impervious to criticism. ‘Books, no way,’ Branson laughed, reflecting the family’s lack of interest in culture and education. ‘I don’t listen to music either.’ Ricky was a doer, not an observer excited by intellectual stimulation. Full of his mother’s forceful prediction of his destiny, he naturally dreamed of glory. ‘Bringing him up was rather like riding a thoroughbred horse,’ chuffed Eve Branson. ‘He needed guiding but you were afraid to pull the reins too hard in case you stamped out the adventure and wildness.’ Some of her son’s contemporaries at Stowe were intolerant of his exceptional qualities. The most critical lampooned ‘Greasy Branson’ as a self-centred big-head suffering oily, pimply skin with a smarmy manner towards teachers. But the majority accurately surmised that Branson’s diffident charm was exceptional. Since Stowe was a second-rate public school, it was not difficult to shine, especially after the sixteen-year-old boasted about his introduction to a prostitute by his father. Thirty years later, the former schoolboys could still recall Branson’s vivid account of a trip to Soho and the introduction to a woman paid by his father to remove the stigma of virginity. Sex, in every sense, was his obsession. He suffered only two genuine handicaps: a knee injury which destroyed his enjoyment of sport, and slight dyslexia. Despite those impediments and his rejection of books, Branson surprisingly won the school’s Gavin Maxwell prize for writing the best English essay. Gavin Young, a well-known newspaper journalist, personally awarded the prize to Branson. Over lunch, Branson listened to Young’s description of a journalist’s glamorous lifestyle: a good income earned by interviewing celebrities in exotic locations. It was an attractive cocktail which matched his preoccupations: money, sex and fame. Branson was reminded of his discussions with a school friend about Student, their proposed magazine for sixth formers, similar to two new magazines, International Time and Oz. While others only talked about the idea, Branson’s energetic self-confidence could make Student a reality. Daily, the schoolboy dispatched dozens of letters appealing for interviews to celebrities culled from Who’s Who. In the late 1960s, youth was tolerated and even lauded by the famous who were intrigued by the turbulence of their children’s generation. Unprotected by a screen of press officers, their replies were surprisingly positive. To the bewildered admiration of his contemporaries, Branson regularly carried into the classroom stacks of correspondence. He regaled his audience with the words addressed to him by writers, musicians, actors and politicians including Harold Wilson, the Prime Minister, and Ted Heath, the leader of the Conservatives. His success encouraged volunteers to write appeals for advertising and cajoling pleas to the famous for free articles. Richard Branson’s gift was his genial enthusiasm which disarmed those whom he approached for help. Even sceptics were seduced to espouse his ambition after listening to his bold account of a return to Soho to interview prostitutes for a sensational article in the new magazine. Soon, for the unusually worldly seventeen-year-old, Stowe had become insufferably parochial. In 1967, Branson left the school and settled in the squalid basement of a friend’s house in Connaught Square, near Hyde Park, a desirable address in London, where, chanting the fashionable lure of ‘doing something really useful for young people’, he strove to complete the first edition of Student. In an era when public schoolboys, even from Stowe, were still regarded as members of a rather staid Establishment, Branson was careful to present himself as a benign hybrid: part hippie and part charitable businessman. Controlling his awkward stutter when necessary, his telephone manner concealed his age to recruit a respected magazine designer for no fee; to secure paid advertising from major corporations; and to negotiate a printing contract for 50,000 copies of the magazine. In a testament to his style, during his sales patter, he would inaccurately boast of selling 100,000 copies but, if challenged, would switch from talking circulation to readership to conceal his exaggeration. Salesmanship relied upon a quality performance and Branson was a notable actor. The appearance of the slick first edition, a good imitation of many established glossy magazines, more than justified his confident sales pitch. His unusual success in 1968 enticed other ex-public school teenagers seeking entertainment to join him. The attraction was his easy lifestyle inhabiting part of a four-storey house at 44 Albion Street in Bayswater which his parents had leased to share with their son. United by the safety net of parental wealth, Branson and his guests enjoyed the liberation of ‘Peace and Love’ in ‘Swinging London’. In a polite reciprocation for his hospitality, they agreed to sell their host’s magazine on the streets. The prospect of permanent parties in rent-free accommodation was fun. Branson’s unthreatening self-confidence attracted people older than himself seeking spiritual liberation in an uninhibited atmosphere. Attractive girls, eager to experiment, camped on his floors to escape their parents, and in turn welcomed a stream of ex-public school boys equally willing to produce and sell Student magazine. Without questioning their host’s authority, they enjoyed music, drugs and sex and ate food collected at the end of the day from the dustbin of a local delicatessen. Their presence reassured Branson of his popularity and guaranteed an escape from solitude. Paying his guests just ?12 per week for selling the magazine on the streets, he none the less retained their loyalty by blurring the stigma of their status as employees. Money, he emphasised, was irrelevant; his fun party glued his new ‘family’ together. In the spirit of the era, they were all contributing towards the good of mankind although no one quite understood how. ‘He plucks,’ Eve Branson admitted innocently, ‘what he wants out of you.’ From his office on the top floor, Branson was part of the gang yet avoided immersion in his own party. While the guests played downstairs, he was focused on the fortunes of his magazine. ‘He was like a country squire,’ recalled Sue Steward, an early employee. ‘We were having a party and all living together but it was always on his estate. You always knew he owned it all. He wasn’t really a hippie, ever.’ Enjoying the sex, ignoring the music, occasionally living in a haze of marijuana, he acknowledged expressions of loyalty and developed the notion that his magazine should become the vehicle for his financial independence. Profiting from the magazine could have presented a dilemma. After all, he touted Student to contributors and advertisers as a philanthropic venture to help poor youth. Among articulate students at the end of the 1960s, the public good rather than personal benefit was the only justification for business. Profits were incompatible with ideals. But Branson was not plagued by the self-doubts infecting so many students of the sixties revolution. He believed in profit and any contradictions were easily brushed aside by fluent self-invention. Sensitive to the mood of the time, Branson convinced himself and others that all his commercial ventures were for society’s ‘good’. The rebellious public school boy adhered to the credo that his ambitions were for his employees’ benefit. Earning money was not a sin, if conducted in the proper manner. But it was preferable to always pronounce, ‘I haven’t gone into business to make money. I like the challenge.’ Combined with his blokeish ordinariness, it was a disarming performance. Connaught Publications, his unregistered company, never published accounts. None of the blissed-out party-goers in Albion Street were sure whether their employer earned profits, let alone how much. Secrecy, Branson learned to appreciate, was preferable to public disclosure and even the existence of that secrecy required concealment. His guests witnessed a performance in which the magazine became the passport to his next incarnation. Influenced by violent agitation across Europe and America, especially against the war in Vietnam, the baby boomers were trashing traditions in confrontations with university administrators, police and politicians. Students, congregating around the London School of Economics, were immersed in an extraordinary political revolution. Although younger than the undergraduates and not having enrolled as a student, Branson purposefully attached himself to the politicised and articulate agitators as an equal. Among the real activists, the serious-looking youth disguising his comfortable background as the grandson of a judge appeared no different from the thousands of other protestors. Understandably, Branson did not reveal that he was neither left-wing nor understood the political feuds raging among the multitude of student factions in the midst of the Cold War. Branson’s natural style implied that he sympathised with the spirit of the times and that he shared the common goal of an egalitarian, classless meritocracy. For Tariq Ali and the other leading Marxists who were preoccupied by endless political arguments and organising perpetual demonstrations, the credentials or motives of any young person hovering silently on the fringe of their turbulence passed unquestioned. But while Ali and others would remain permanently oblivious to Branson, the interloper himself, searching for a niche, exploited his presence at a decisive moment of history. Unmoved by politics or history, Branson none the less spotted a financial advantage which eluded those participants preoccupied with moral conflicts. Skilfully, by walking with the leaders of London’s huge demonstration against the Vietnam War, he positioned himself in 1968 as the editor and owner of Student magazine, and as a ‘Students’ Spokesman’. Newspaper photographs recorded Branson among the leaders of the march. While most demonstrators ended that day of protest bitter about police violence and frustrated by the state’s inhumanity, he had absorbed an invaluable insight into the new fickleness of the era. Journalists dispatched by middle-aged Fleet Street editors to report and explain the student revolt, searched for a spokesman. Branson was discovered in Albion Street. Stepping over rubbish, unsold copies of Student magazine and couples sleeping on the floor, one grateful reporter bestowed credibility on his interviewee by lazily repeating Branson’s self-description as a ‘student leader’ and faithfully quoting his utterances in a London newspaper. Mention as a ‘student leader’ in one newspaper brought invitations to appear on television and feature in Vogue magazine as a representative of Britain’s student rebellion. To enhance his apparent importance for visiting journalists, he arranged for friends to telephone the house from call boxes, creating an illusion of successful activity. Journalists, Branson realised, were unlikely to challenge his exaggerated claims for Student’s success or his personal importance. On the contrary, the more outrageous his assertions the better. A single pose alongside Tariq Ali during the demonstration had taught Branson the value of hype. At eighteen Branson possessed star-quality. His jocular celebrity persuaded the unambitious living in his basement and seeking justification for their fun-seeking lifestyle to accept his argument for their common goals. Their dependence upon him was gratifying to Branson but also troubling. Student’s circulation remained low and static. It was his first taste of a recurring predicament throughout his life: a cash crisis. His solution was to borrow an idea. To save Student he imitated Private Eye. Regularly, the satirical magazine promoted its Christmas edition by attaching a record on to its cover. Branson’s idea for his magazine’s issue in spring 1969 was inspired. In October 1968, he approached Derek Taylor, the Beatles’ press officer, requesting an interview and a special song recorded by John Lennon dedicated to Britain’s students. Ingratiating himself by focusing polite charm on his targets was Branson’s particular skill and Taylor agreed. But by early December, after commissioning an expensive cover design and placing a large printing order, the record had still not materialised. Sitting in Taylor’s office, helping him address Christmas cards, Branson pressed for delivery. Taylor, proud of fulfilling his pledges, had a problem. Lennon had been prosecuted for the possession of cannabis and Yoko Ono, his girlfriend, had just miscarried. Traumatised, the couple had isolated themselves in their house outside London. Impulsively, Taylor scribbled on a card, ‘Trust me, Derek.’ Carefully, Branson pocketed the card. At the beginning of January 1969, the promised record had not been delivered. Branson’s own despair deprived him of any sympathy for Lennon. After consulting his father, he issued his first writ: Connaught Publications v. John and Yoko Lennon and Derek Taylor. The official document, alleging breach of contract, was served on Taylor in the street outside his office. Listed as proof of an agreement was Taylor’s scribble on the Christmas card. The writ established that sentiment would never interfere with Branson’s urge to earn money. His verbal awkwardness, his long hair and his broken glasses might have suggested a hapless, easy-going hippie but they were just the natural props in a well-marketed performance. At dinner that night John Varnom asked about the writ. ‘My father’s a judge,’ replied Branson inaccurately, suggesting that the mighty ranks of the British Establishment endorsed his behaviour. Varnom withheld any correction. Branson’s grandfather was a judge and, ever since an old gamekeeper on the family’s lost estate had tugged his forelock to the young boy, Branson had mirrored his mother’s determination to regain his family’s lost social status: for the next fifteen years he would not correct newspaper quotations that ‘My father is the sixth in line in a family of judges.’ In April 1969, Branson, Taylor and their lawyers met in Savile Row to finally take delivery of a tape provided by Lennon. It was the heartbeat of Yoko’s baby which ended in silence. ‘That’s when it died,’ announced Taylor. Branson never used the recording and abandoned his writ. By then, Student had flopped. Outsold by his more original competitors, Branson had exhausted his charitable sales patter to contributors and suppliers. Marooned in Albion Street, Richard Branson was a trader in search of a commodity. Downstairs were the friends and tenants who enjoyed the loose lifestyle and, while talented, shared none of his material ambition. Which was precisely why they were partying untroubled by their low wages. But they had provided ideas and thanks to John Varnom and Tony Mellor, Branson switched his full attention to the newly created Virgin Records. ‘We’re not selling Andy Williams,’ suggested Al Clark, a contemplative journalist and Virgin’s director of publicity, recruited to Virgin Records after the launch. ‘We need an underground feel,’ suggested the enthusiast who was more perceptive than most in the company. The records offered by Virgin, Branson meekly agreed, would reflect the lifestyle lexicon of the sixties. Like a sponge, he willingly learned from others, hiring people to perform tasks he could not have undertaken. Those arriving at Albion Street in 1969 included Steve Lewis, a North London schoolboy on the eve of going to university. Lewis enjoyed finding more obscure records, buying them at discounts from record shops and dispatching the packages. Lewis and the other employees never recognised Branson as an aspiring tycoon. Even when he moved the business in 1970 to a warehouse in South Wharf Road in Paddington after the Church Commissioners, the landlords of Albion Street, had exposed his repeated deception that the premises classified for domestic occupation were being used contrary to the lease for business, Lewis and the others never thought of themselves as the underpaid employees of a fame-seeking buccaneer. The alchemy of his personal relationships had been learned in Surrey and at Stowe. Charm and respectfulness covered an elusive character whose ambitions and class were well disguised. Unlike the majority of entrepreneurs, Branson enjoyed deep roots in English society – he had not had to scramble out of the gutter – but he saw commercial value in shedding that pedigree and veering in the opposite direction. Commercial success was connected, he considered, to classlessness. The informality generated loyalty but his agenda, shrouded behind contrived ambiguity, was quite specific. ‘People thought,’ he explained, ‘that because we were twenty-one or twenty-two and had long hair we were part of some grander ideal. But it was always 99.5 per cent business.’ Uncluttered by Sartre or Marx, he could motivate his public school cabal and the working class aspirants by infectious enthusiasm. His dominance was asserted imperceptibly; his genial decisiveness arrived without shouts or threats. Only the astute perceived his insensitivity to the disillusionment bedevilling the sixties generation. While the Class of 1968 unsuccessfully struggled in the early 1970s to disengage from their youthful preoccupations of socialist revolution and free love, Branson suffered none of their emotional turmoil. He had always stood apart from the soul-searching idealists. Free of their self-destructive agonising which eventually constrained the revolutionaries’ professional ambitions, Branson breached the moral code of that era and pursued wealth. The compartmentalisation began early. One Branson sat behind a desk in the warehouse playing hardball on the telephones as a tycoon; while another Branson, doing ‘good for society’, established the Student Advisory Centre to help young people solve their problems. The unemployed, the suicidal and pregnant girls were invited to telephone for assistance. Although Branson would some years later say that ‘The Advisory Centre was dealing with 3–4,000 people a week at the time’, Jenny Bier, whom he recruited to answer the single telephone, recalls between ‘ten and twenty-five people calling every week’. Of those, about four sought help for abortions. Among the callers in spring 1970 was Jennifer Oliver (#ulink_bcf7b04a-afa7-53f8-ac83-aba4de16a5b6), a twenty-year-old undergraduate desperate to terminate a pregnancy. ‘Come and see me,’ offered Branson. The following day, Jennifer Oliver sat on the other side of the desk in South Wharf Road explaining her predicament, dismayed by the frequent interruption of telephone calls including one from Ted Branson speaking from a golfing holiday in the Algarve. Turning to Oliver, Branson was reassuring. ‘Leave it with me,’ he said. ‘I’ll sort it out for you. I’ll ring you within a week.’ Two weeks later, Oliver was in despair. Branson had not called and her pregnancy was approaching the ten-week deadline allowed under the new Abortion Act. Oliver’s call to Paddington was again answered by Branson. ‘Oh gosh, I forgot. Did I say that? Come and see me immediately.’ Once again in his office, speaking again between telephone calls, Branson admitted there was a problem. ‘It’s so close to the deadline I can’t arrange it in the time. It normally takes three weeks.’ Oliver became visibly distressed. ‘But I could pull some strings,’ offered Branson, ‘if you would do a favour for me.’ The businessman’s proposition was simple. ‘BBC TV,’ he explained, ‘are featuring me in a programme called “Tomorrow’s People”. They want to feature my Student Advisory Centre. If you agree to be filmed visiting me, I’ll pull strings and fix up your abortion.’ ‘But I don’t want anyone to know about me,’ said Oliver. ‘I want secrecy.’ ‘Well, wear a disguise,’ suggested Branson. ‘Is there no other way?’ she asked. ‘There’s nothing else I can do. Think about it.’ Four days later, Oliver believed she had no option but to agree. ‘Great,’ said Branson. ‘Come to my office. We’ll be filmed and then we’ll go straight to Birmingham.’ Their destination was the Pregnancy Advisory Centre, a respectable organisation which had agreed to the filming. The documentary, celebrating Branson as a rising personality, was transmitted shortly afterwards. Oliver’s disguise, a wig, was ineffective. Branson appeared unaware of her embarrassment. His name, though, was increasingly mentioned among the lists of fashionable youth. Benefiting from other people’s labour and ideas hardly matched the image of the sixties rebel but his style encouraged Branson’s trusting tenants and employees to literally plonk ideas on his bed. One morning, as he sat in bed with Mundy Ellis talking simultaneously on two telephones and reaching for papers, Tom Newman entered. Tall, long haired with a hint of cool mystery which attracted women, Newman was the stereotype rock guitarist: an uneducated rake immersed in drugs, sex and rock and roll. Bobbing on the fringes of the music world after graduating from bruising battles with bikers at the Ace Caf?, he relied upon others to pull his life together after fleeing his home and his father, a drunken Irish salmon poacher. Newman felt socially inferior to the younger Branson described by his girlfriend, an employee of Virgin Records, as ‘fascinating but tyrannical’. ‘Why don’t you build your own recording studio?’ asked Newman. ‘You could make a lot of money from that. I’ll run it.’ ‘Sounds good,’ stuttered Branson as Mundy dropped a grape into his mouth. Quickly Branson warmed to the idea. He encouraged Newman’s trust. ‘He was the first bloke I ever spoke to who spoke posh,’ Newman told a friend. ‘But he was approachable, charming and keen.’ ‘Let’s find a studio,’ Branson agreed, conjuring visions of a music empire. Like generals in battle, putative tycoons also rely upon luck. In January 1971, Simon Draper, a twenty-one-year-old second cousin, introduced himself in South Wharf Road. ‘I’ve just arrived from South Africa,’ he smiled. Over breakfast, as Branson excitedly unveiled his ambitions to own a record label and a chain of record shops, Draper revealed his encyclopaedic knowledge of modern music. Even better for Branson, his unknown cousin, like Steve Lewis, was more interested in music than money. Branson, who confessed that his favourite tune that week was the theme from Borsalino, recognised that Draper’s arrival was a godsend. Draper was invited to join the empire and work with Nik Powell, a childhood friend of Branson’s and his neighbour in Surrey. In return for leaving university prematurely, Powell had negotiated with Branson a 40 per cent stake in Virgin Music which embraced Virgin Records. (#ulink_182d4487-9234-5779-88b8-46de4f5e69bc) Powell was a perfect complement to Branson. Quiet, cerebral and unimpulsive, he imposed order on the chaos of Branson’s stream of initiatives, restrained his friend’s excesses and managed the ramshackle finances of a business not even incorporated within a company. Carefully set apart from other employees, Branson, Draper, Powell and a few other public school friends formed a tight cabal. Powell’s organisation, Branson acknowledged, had saved Virgin’s mail-order business from the destruction threatened when the postal workers went on strike. Together, they had rapidly opened a record shop in Oxford Street. ‘We’ll put an ad in Melody Maker,’ suggested John Varnom, ‘about lying on the floor, listening to music, smoking dope and going home.’ ‘Great,’ laughed Branson. Nothing more was said or expected. Branson often communicated only in monosyllables. Miraculously, dozens of admiring customers regularly queued to enter the first-floor shop. Long-haired hippies slouched on waterbeds listening to music on headphones while others waited outside to enter. A truth had dawned on Branson. Most people were born to be servants and customers. He would be master, provider and richer. The increasing flow of cash from the record sales and the growing popularity of Virgin among music fans encouraged Branson’s dreams of expansion. Profiting from his employees’ agreement to earn just ?12 per week, Branson was secretly accumulating a fortune. Rifling through Branson’s desk, John Varnom had discovered a building society cash book showing a ?15,000 deposit in the name of Richard Charles Nicholas, Branson’s three Christian names. ‘Cheeky bastard,’ whispered Varnom. Even in 1970 Branson’s finances were attracting controversy. Private Eye reported that Branson had received ?6,000 for advertisements in Student but only admitted to ?3,000, which Branson vigorously denied. Indeed there was no evidence that he had. Varnom said nothing about the cash book. The amount was too large to envy and the notion of equality, Varnom knew, was bogus. Besides, he knew no better alternative to working and living in Branson’s kingdom, especially after the realisation of Tom Newman’s idea. The search for a recording studio had terminated in March 1971 at a seventeenth-century Cotswold manor house in Shipton, five miles from Oxford. The price was ?30,000. ‘How are you going to pay for it?’ asked Newman, mystified. Branson smiled enigmatically. ‘You’re an imperialist,’ Newman, a rocker without a bank account and unaware of overdrafts, grunted. He remained puzzled how a twenty-one-year-old hippie could find the present-day equivalent of ?275,000 while his employees were earning ?12 per week. The unspoken explanation was Branson’s unique fearlessness about debt. Money was unthreatening to a man certain of success who assumed that risk would be rewarded. To buy and convert the manor and outhouses into bedrooms and a recording studio required capital. Branson approached an aunt for a gift. She was advised by her stockbroker to offer only a loan. Branson received ?7,500, a sufficient sum for an application to Coutts, the bank shared by the Bransons and the royal family, to advance a mortgage for the remainder. The trusting bankers, reassured by the Branson family’s reputation, did not question Virgin’s cash flow from the shop and mail-order business, or discover the purchase tax fraud and the sale of bootleg records. Even after his arrest, there was no unpleasantness between the bankers and their client. As for the ?60,000 tax payments and fines, his cabal assumed the same Masonic relationships which had saved Branson from conviction and public humiliation would arrange the money. None could imagine that his imminent collapse could be forestalled only by a bravura performance. ‘On my life,’ Branson bluffed to his creditors, ‘Virgin’s finances are fine.’ The company, he repeated, was not in financial peril. The flow of cash from fifteen new Virgin record shops opened across the country substantiated the denials of fragility. Branson and Powell precisely timed the opening of each shop in a different town to secure interest-free cash for two months before payments were required. Other sources of income remained undisclosed. Walking a tightrope was intoxicating but the chaos had become perilous. Virgin Records was not incorporated as a company. Branson had forgotten the legalities. His employees paid neither tax nor national insurance. For four years, he had been trading without proper financial accounts. Bereft of cash, Branson was perplexed how to equip Tom Newman’s recording studio at the manor. ‘Let’s play roulette at the Playboy Club in Park Lane,’ he suggested to Newman. ‘I’ve got a winning system.’ Using ?500 taken that night from the till of Virgin’s shop in Notting Hill Gate, he and Newman shuttled between two tables as Kristen Tomassi, his blonde American girlfriend, gazed with increasing bewilderment. ‘It’s the last bet,’ Branson gritted at 5 a.m., clutching a few chips. He had risked everything; his system had failed. The flick of the wheel was lucky. ‘Great,’ he sighed as he stepped into Park Lane with ?700. Before the shop opened later that morning, the original money was restored and the profits divided with Newman. Twenty-five years later he could speak from experience that the National Lottery compared to the roulette wheel was ‘a licence to print money’. Tom Newman’s enthusiasm, Branson discovered, was not matched by his technical expertise. The guitarist knew little about the technology of recording music. For reassurance, Branson consulted George Martin, the Beatles’ producer. Martin laughed. Branson was proposing a four-track studio while Martin was installing sixteen tracks and much more. ‘We can’t afford all that,’ Branson told Newman. ‘We’ll have to busk it.’ They would buy second-hand equipment and Newman would learn on the way. ‘I’ve found some cheap mixers and old speakers,’ announced Newman proudly. ‘But the acoustics won’t be much good.’ ‘Keep quiet about it,’ ordered Branson. ‘The best sound you can get,’ Branson boasted to musicians and their managers in a frenzy of telephone calls and personal visits to lure the unwary. ‘Sell them the image,’ suggested John Varnom, the inventor of the Virgin name. ‘Act the part of the alternative. No suits and ties like Decca.’ Compared to the unfriendly basements hired by the big studios in London, the manor offered a party. Unlimited meals and alcohol served in manorial splendour by four attractive girls, with the promise of huge bedrooms upstairs, created the illusion of a sex hotel with nightly orgies where drugs were served with the cornflakes. In truth, there was less actual sex at the manor than occurred in London nightclubs but Branson calculated that the promise of a party would conceal the inferior quality of the sound and enhance his profits. His intuition proved shrewd. Branson persuaded Newman and the eager girls to accept low wages. Newman’s screaming protests when Branson frequently failed to send any money were brushed aside. ‘I’m also not being paid,’ lamented Branson, the victim. None of the uninquiring spirits enjoying his company realised that the principal beneficiary of their own low wages was Branson, focused entirely on his own agenda. Circulating among his staff in the Sun in Splendour, the local pub on Portobello Road, puffing their cigarettes, sipping their beer and groping the girls amid jovial banter eased suspicions about an ambitious businessman. Touchy-feely embraces, pecking at cheeks and spasms of generosity defused the impression of a hierarchy and encouraged the notion of the Virgin family. Employment at Virgin, Branson had persuaded himself and his loyal staff, was benign, generous and equitable. Occasionally providing a company car, invitations for meals in restaurants and organising holidays for some staff, he was the life and soul of his own party. Acting the fool in front of big audiences, skiing naked down alpine slopes and hosting hilarious mystery away-days terminating in Croydon solidified loyalty and trust in him. For those condemned to dreary office lives, Branson offered the chance to sense magic. Only the cabal, those close to Branson, understood that their garrulous host had created the family as protection from loneliness. Branson required perpetual company to protect himself from boredom. The anti-intellectual was incapable of self-entertainment. But his permanent party could not continue unchecked. One year after the exposure of his purchase tax fraud, Branson was compelled to abandon the convenience of concealment through chaos. ‘You’ll have to become directors of proper companies,’ Jack Claydon, an accountant, told Branson. In September 1972, Virgin Records was incorporated and over the following months ten other companies were created. Legal compartmentalisation suited Branson’s instinct for secrecy and provided the machinery to transfer money from one company’s account to another’s, giving the appearance of solvency and preventing bankruptcy in one activity infecting the whole business. ‘I’m spending a lot of my time,’ Jack Claydon told a friend, ‘juggling banks and creditors in order to play one off against the other and help Branson to stay solvent.’ Claydon, an inconspicuous character, was ideal for many discreet shuffles. Telephoning early in the morning, Branson summoned the accountant to his houseboat. Unlike a previous call when Branson had even had to ask for advice where to find a hooker for an American contact, Claydon was asked to give respectability to Branson’s latest venture. ‘I’m going to sign a deal and I need a letter to the bank to borrow more money.’ Claydon’s task was to bestow credibility on Branson’s optimistic financial projections of sales and profits. ‘Make it look good,’ urged Branson. ‘The bank wants to meet us,’ Claydon reported later that day. Lunch with Peter Caston, his bank manager, at Simpsons was Branson’s opportunity to shine. Wearing a suit and tie, his enthusiastic projections of wealth were only marred, despite Claydon’s warning glances, by excessive talking. The conservative banker was bewildered and became cautious, especially after Branson’s cheque for lunch was rejected. The guest from Coutts reluctantly paid. Branson’s strength was his robust refusal to accept defeat. ‘You’re never morose,’ said Claydon in grudging admiration of a man whose energy exceeded conventional business talent. ‘You’ll always find an escape.’ Branson laughed. Claydon even urged him to ‘stop interfering in the business’ to avoid creating chaos. The accountant, whose audit validated the Virgin business, thankfully did not understand that chaos was an essential to Branson’s appearance as a classless wealth creator. Parroting the sixties mantra about ‘helping to make the world a better place’ concealed a more straightforward ambition: that it should be a better place for Richard Branson. (#ulink_b3a490e8-6bc1-51cc-a2cd-fc693fe0ccf3) Not her real name. (#ulink_446619bc-386a-56a1-abb8-214b65aaf3f1) Throughout the book Virgin Records is not distinguished from the Virgin Music Group. 3 Honeymoons and divorces (#ulink_f5fa84b0-8964-59dc-9a21-2ccb636ff375) Seducing Mundy Ellis, Branson’s girlfriend, had been an enjoyable challenge for Tom Newman, but stealing away Kristen Tomassi, Branson’s bride-to-be, on the eve of their wedding was ecstasy. In the three weeks before the wedding, while working with Newman in the manor, Kristen, a sexually adventurous girl, had focused on the rough diamond. Artistic, purposeful and coolly sophisticated in a manner still unknown among British girls, the American blonde represented a trophy for Branson. Chasing women was for Branson similar to chasing business, part of the great game in his consuming competitiveness. After bumping into Kristen in a bedroom at his Oxfordshire mansion, Branson decided to pounce immediately. Nothing, he had absorbed from his mother, was unobtainable. Racing in his own car after the woman as she and her boyfriend drove back to London, Branson had lured her to a meeting and soon after moved her on to his houseboat. Newman judged that Kristen, the daughter of an American business executive, had fallen for Branson’s status and wealth rather than eternal love. Branson, Newman believed, was similarly deluded. On the night before the stylish wedding at the manor, Newman and Kristen had a raucous sexual fling. Suitably, one session was across the bonnet of Newman’s green Bentley, bought by Branson for ?1,000 and parked by The Ship public house. The following morning, 22 July 1972, Kristen smiled serenely to about three hundred guests dressed in hired, ill-fitting morning suits, top hats and flowing dresses. Most had barely recovered from a riotous dinner in a local hotel the previous evening and wilfully indulged at the reception in the frenetic fun of bun fights and pranks. After the honeymoon in Mexico, Branson moved from the houseboat to a three-storey Victorian house in Denbigh Terrace, Notting Hill, bought from Peter Cook with the help of an ?80,000 mortgage provided by Coutts bank. Branson’s ability to meet the mortgage payments bewildered his employees whose salaries in South Wharf Road, after an unpleasant row, had just been increased from ?12 to ?15 a week. Branson constantly described his salary as ‘modest’, and Virgin’s first registered accounts disclosed Branson’s annual income as ?1,820. His employees assumed that he benefited from a secret source of money. Kristen Tomassi’s passion for Newman had developed while he mixed and remixed the tracks of over twenty different instruments of an unusual forty minutes of music composed by Mike Oldfield, a diffident guitarist whose handsome looks belied a troubled personality. Newman and Simon Draper’s excitement about Oldfield’s extraordinary composition washed over Branson. To an unmusical businessman, Oldfield’s forty-minute track without a song was difficult to appreciate. Branson’s indifference was shared by every established record producer. All of them had rejected Oldfield. ‘Why don’t we produce Oldfield?’ asked Simon Draper. ‘We have nothing to lose.’ Draper’s suggestion that Virgin produce the manor’s first record, Branson appreciated, was risk free. Failure would cost nothing. Branson’s virtue was his willingness to gamble if the financial risk was minimal. Taking a standard record company contract, Branson added a refinement. Oldfield was contracted for a decade’s work at the low 5 per cent royalty fee and, acting simultaneously as Oldfield’s agent and manager, Branson tilted the contract further in his own favour by paying Virgin an additional 20 per cent of Oldfield’s income for ten albums. ‘We’ll put Oldfield on ?20 a week,’ Branson told a friend, ‘like me and all the other Virgin employees.’ No one challenged Branson’s pretension to earn just ?20 per week. ‘It’s got to have words,’ Branson urged Draper and Newman. ‘Everyone says that records without a song don’t sell.’ ‘No way,’ replied the two men who by spring 1973 had developed what they had named Tubular Bells into a polished composition. Branson relented. From his new offices in Vernon Yard, Notting Hill, he was hectically marketing Virgin’s first record. To increase his profits, he had retained all the rights. Tubular Bells had developed into his personal challenge to the established record corporations. Brashly, he invited the DJs and critics to dinner on his houseboat to preview the new record. The unusual venue gave his sales performance unique style. Among those persuaded was John Peel, who a few days later devoted his entire programme on Radio One to the record. His audience was ecstatic. Overnight, thanks to Peel and others, Branson owned Britain’s best-selling album of 1973. The success was spectacular. Daily, tens of thousands of pounds poured into Virgin’s account. Atlantic Records, after buying the American rights for $750,000, sold the music to Hollywood as the soundtrack of the film The Exorcist. Branson’s personal wealth was assured. Some would subsequently carp that Tubular Bells effortlessly fell into Branson’s lap, but that reflected their naivety. Flair and energy had created the circumstances. At twenty-three, Branson was a millionaire. Wealth tortured many in that socialist era but Branson’s conscience was untroubled. He seized the moment to develop a formula for survival and success. Previously, the mystery about Branson’s finances was his fearless accumulation of debt. The new mystery was the cloak of secrecy he cast over his business and personal wealth. To disguise his ambitions from his low-paid employees he plotted a strategy to protect his new fortune from taxation and future creditors. Although he would boast, ‘we still paid ourselves tiny wages’, the whole picture was different. On the advice of his father, and against the background of family trusts, he sought the help of Robert Maas of Harbottle and Lewis, his solicitors, to establish his first offshore trust in the Channel Islands. Hundreds of thousands of pounds of royalties received for both Tubular Bells and the use of the Virgin logo, a newly registered trademark, were being deposited in the offshore trust. Ray Kite, the logo’s designer commissioned by Simon Draper, was paid ?250 out of Virgin’s fee of ?2,000 and received no further royalty. (Branson’s subsequent account about casually seeing a sketch of the logo drawn on the back of a serviette while passing through a dining room seems to be mistaken.) Beyond the view of the Inland Revenue and his growing Virgin family, Branson, Draper and Powell, the elite, could discreetly accumulate and manage their millions. Yet despite their legality, Branson’s trusts did arouse suspicions. Taxes could only be avoided under British law if Branson, as a British resident, did not influence the management of the trusts. Yet Branson would speak of his ‘family trusts’ and enigmatically assure banks and business partners that the trustees would financially support his business ventures, appearing to call into question the trustees’ independence. After taking advice as to how he could conceal his fortune from the Inland Revenue, Branson’s next step was to reinforce his camouflage from his employees. Austerity was introduced to suggest poverty and to protect his wealth. He expressed a new dislike of expensive cars and clothes. The second-hand Bentleys bought by Virgin for Tom Newman and others were sold. The patriarch, however, discovered that some Virgin employees were becoming jaundiced by the fraying fa?ade of the family’s equality. To capitalise on his success, Branson had become immersed in the millionaire’s schedule of international travel and power lunches to negotiate mega-deals with major record companies. He was unaware of his staff’s complaints about low wages. ‘They want to join a trade union, Richard,’ revealed a secretary after a return to London. Horrified by visions of the constant trade union strife ravaging Britain, Branson rushed to his employees’ meeting and burst into tears. ‘Why are you so interested in money?’ he asked, presenting himself as a victim of their demands. The millionaire’s question only temporarily silenced his confused audience. ‘Do you know how much a pint of milk costs, Richard?’ asked Sian Davis, the director of Virgin Records publicity department. ‘No,’ he replied sheepishly. ‘You live on another planet. We need money to live.’ ‘We’ve got no money,’ pleaded Branson, tears running down his cheeks. His manner reinforced the impression of equality and poverty. Richard, the capo of his family, was giving everyone a chance of their lifetime, so long as they obeyed his rules. The threat dissolved. No one was inclined to contradict the source of so much fun and few appreciated the sharp variation in incomes between the ordinary employees and the inner circle. Entry into the cabal was biased in favour of former public schoolboys. By accident rather than intention, that selection automatically excluded the racial minorities. Branson’s social background and life had not included Jews, blacks or Arabs as intimates. Rather the capo was attracted to like-minded people from a similar mould. The result was reflected in the employees’ contractual relationships with Virgin. For Steve Lewis, a state-educated Jew negotiating publishing rights for music which became the seedcorn of Branson’s future fortune, entry to the cabal was barred. Lewis was welcome to dedicate his life to enhance Virgin’s fortune by accumulating the ownership of publishing rights in popular music and managing the record company, but he could expect nothing more than appreciation and his salary. Branson appeared to be unaware of the insensitivity of jotting on his notepad under the name Arthur Indursky, a famous New York lawyer, the word ‘Jewish’. Branson, Lewis accepted, was not anti-Semitic but merely ignorant of those who lived their lives outside the realm of the Jags and judges inhabiting Surrey and Stowe. Branson’s appreciation of Tom Newman and Simon Draper was expressed by giving each stakes in different Virgin companies. Newman’s stake was in the studio at the manor; Draper’s in Virgin Records. Both shareholdings were potentially worthless since their value was determined by Virgin’s holding company which Branson and Nik Powell controlled. Nothing was needlessly given away. Branson’s loyalty was restricted to those aware of his financial secrets, especially to Ken Berry, a skilled accounts clerk promoted to Branson’s personal assistant. For the rest, Branson evinced no sense of obligation. In the process of rapid self-education, his canon tolerated nothing else. Unlike Chris Blackwell, a rival independent who owned Island Records, Branson spent limited time in the studios with artists and appeared less concerned than Blackwell about his artists’ lives. His pleasure was the deal: signing artists as fast as possible, even if they were contracted to his competitors. Island Records was a first target. Having pondered whether Bob Marley could be lured, he settled on Peter Tosh. After that deal, Alison Short, his secretary, would say someone punched Branson on the nose in fury, and he faced threats on his houseboat from G. T. Rollins, a musician, over a payment of ?2,000. ‘You shouldn’t go taking other people’s acts,’ advised Tom Newman. Branson laughed. Poaching was, he replied, acceptable. In the tough rock world, whatever the rights and wrongs, he would fight with the best. Breaking into the big league required risks and he was happy to gamble over his limits, offering huge sums of money which he did not possess. Famous groups – 10cc, The Who, Pink Floyd, the Boomtown Rats and finally the Rolling Stones – were offered fortunes to switch to Virgin but every agent rejected Branson’s money. Even his ?3.5 million bid for the Stones was spurned. Virgin was too small and failed to inspire confidence. Rejection, however, never embarrassed Branson; it was his incentive to try harder. Outdoing others was the criterion for his life as Jacques Kerner, his French distributor, discovered. Branson flew to Paris for dinner with Kerner. The impatient tycoon wanted to expand Virgin’s distribution in France. At the dinner, Kerner introduced Branson to Patrick Zelnick, his employee with responsibility for Virgin’s sales. ‘He’s just what I need,’ thought Branson about Kerner’s salesman. One month later, Branson hired Zelnick. ‘When you’re invited for dinner,’ complained his outraged French host, ‘you’re not meant to walk away with the cutlery.’ Branson was chuffed. When people screamed ‘foul’ he felt pleasure. By 1976, Branson’s hyperactive deal-making, exclusively financed by Tubular Bells, had expanded the Virgin empire into more record shops, the creation of Virgin Rags, a putative national clothes chain, Duveens, a restaurant in Notting Hill Gate, a sandwich delivery service, a health-food megastore, Virgin pubs and the sale of hi-fi systems. Juggling many balls, Branson hoped, would produce a major success. His business philosophy was crystallising. ‘With many companies we start,’ he later explained, ‘we don’t even do the figures in advance. We just feel that there’s room in the market or a need for something and we’ll get it going. We try to make the figures work out after the event.’ The flaw was his accelerating debt. He had proven dynamism but not business acumen. His shotgun approach exposed an inability to focus on the detailed management of businesses he did not understand and his lack of strategy was perilous. Virgin’s costs were growing and in the developing recession of the mid 1970s its income was dwindling. Branson faced a cash and a commercial crisis. His gambling instinct was to double and redouble his stake to escape from trouble but the trading conditions were dire. Under the Labour government, the British economy was suffering record inflation and high unemployment. To survive, Branson needed to close down the loss-making businesses and dismiss unprofitable artists. Sitting alternately with Draper, Varnom and others in the cramped offices in Vernon Yard and on the houseboat, he repeatedly groaned as he had eight years earlier, ‘What can we do?’ Pop and rock music had fallen into the doldrums. Virgin offered nothing to the new teenagers whose latest passion was Punk. His unsuccessful expansive frenzy revealed the unpalatable truth that Virgin was a one-act show relying on the Big One – Tubular Bells – and that Branson did not possess a profitable spread of original music. The distinction between the star players in business and the alsorans is their ability to overcome the challenges of adversity to avoid sinking into oblivion. Branson’s gift was to shrug off despair and find an epiphany. While his cabal and employees winced in trepidation, he pondered the outrageous to survive. ‘We need the Pistols,’ he eventually declared. In summer 1976, Simon Draper had condemned the Sex Pistols, four violent and drug-addicted hooligans with spiked, dyed hair, dressed in ripped leather, as musically bankrupt. Branson had followed his cousin’s advice and walked away from signing an agreement with Malcolm McLaren, the Pistols’ thirty-two-year-old manager. McLaren was not disappointed. Renowned for his anarchic artistry and outlandish mastery of pop culture which had created the Pistols’ grotesque appearance, he branded Branson a philistine. His suspicions had been fuelled by the story of a meeting on Branson’s houseboat with Jake Rivera, an agent representing Elvis Costello and the Attractions. To successfully contract the group, Branson turned on his customary charm: ‘I loved your last album.’ ‘What was your favourite track?’ asked Rivera mischievously. Branson was dumbstruck. His ignorance was exposed. The story of his humiliation raced around London. McLaren’s opinion of Branson was so low that he suspected Branson might even consider selling bootleg records of Virgin’s own artists. For their first record, ‘Anarchy in the UK’, the Pistols contracted instead with EMI. In December 1976, Branson watched television bewitched by the stream of drunken expletives used by the Pistols to prove their notoriety and promote their record. Their violence was headline news. It was just what Branson required. But a hurried agreement the following morning by Leslie Hill, EMI’s embarrassed managing director, to transfer the group to Virgin ended abruptly. McLaren had agreed with Branson to ‘be in your office this afternoon’ to discuss the transfer but he never arrived. However, five months later, in May 1977, McLaren finally arrived in Denbigh Terrace with Steven Fisher, his lawyer. The Sex Pistols needed a record company and Virgin needed a sensation. McLaren was not surprised by the absence of any records in Branson’s house except for one Reader’s Digest collection of Mozart, a present from Ted. ‘We want someone who’s going to run with us,’ said McLaren. ‘It’ll be hair-raising, but it’ll be fun.’ Branson smiled. ‘Sex’ in all its guises was richly exploitable. He traded on other people’s ideas. ‘I’m just piggy-backing,’ he would later admit. McLaren’s creation offered a chance of financial salvation. ‘Those two are loathsome,’ Branson told John Varnom after McLaren and Fisher departed. ‘They’re loathsome,’ he repeated with vehemence. ‘Loathsome!’ ‘Richard’s utterly over the top,’ thought Varnom, who normally shared Branson’s prejudices. Branson’s loyal acolyte concluded that he had witnessed the clash of two mutually intolerant spin-masters. However loathsome, Virgin and the Pistols were yoked together to ridicule the monarchy. ‘We need something,’ mumbled Branson. Varnom’s sophisticated sense of mischief, he hoped, would contrive an outrageous prank to promote the Pistols new record, ‘God Save the Queen’. The record was a vicious curse at the monarch designed to coincide with the nation’s extensive Silver Jubilee celebrations. Creating chaos for publicity was commercially vital. At 4 p.m. on 7 June 1977 Varnom arrived at Westminster pier to hire The Elizabethan, a Thames cruiser. ‘It’s not for those Punks?’ asked the boatman. ‘No,’ replied Varnom, ‘it’s for a boring German synthesiser band.’ Thirty minutes later, the taxis arrived with the Pistols, their managers and Branson. ‘Just sail past the Houses of Parliament,’ ordered Branson. ‘It’s going to be sensational,’ laughed Varnom. ‘Great,’ bubbled Branson. His imagination raced. Pranks were always exciting but this was special. Earning money by insulting the Establishment and basking in celebrity was a blissful combination. As the cruiser neared the Palace of Westminster, the curses of the four drugged and drunken Pistols blared from loudspeakers across the river towards the Houses of Parliament. The result was better than Branson could have imagined. Police boarded the cruiser, ordered that it return to the pier and, amid screams and fights, arrested several people. Branson held back until the m?l?e was over and then briefed the newspapers. Chortling at the anticipated publicity, Branson led the Virgin cabal to a Greek restaurant to celebrate. The evening ended with everyone smoking marijuana supplied by the restaurant. Irreverence was certain to restore Virgin’s fortunes. ‘Fantastic,’ screeched Branson reading the universal disgust expressed in the newspaper headlines the following morning. Publicity meant soaring sales and guaranteed profits. He was delighted to attract more headlines by attesting in court later that day to McLaren’s good character. Conflict and controversy, he knew, would be even more profitable if he positioned himself as the victim: the helpless innocent fighting for the common good. By stoking the Pistols’ notoriety, he would push their album Never Mind the Bollocks up the charts. ‘It was a political statement,’ he told the reporters outside the court. ‘Those arrested are all victims of the system.’ The only victim was Malcolm McLaren. The agent was the victim of Branson’s imposition of an unusually advantageous contract. McLaren had made a fatal error which many mixing with Branson over the years would commit. Coolly devoid of attachment to the music, Branson had viewed the Pistols’ contract as a vehicle to earn money. He had planned McLaren’s entry into his life, and his exit. In the eagerness to find a record label after EMI terminated the Pistols contract, McLaren had failed to carefully examine the details of the agreements which he had signed. As the Pistols disintegrated amid debauchery, disputes, murder and suicide, McLaren discovered that Branson, to secure his investment, had excluded him from the management of the surviving group. ‘He’s a dangerous man in court,’ was Steven Fisher’s brief assessment. Rushing to court in August 1978 to protect his property, McLaren found himself outclassed by his partner. His losses were Branson’s profits, financial and tactical. The victor understood the commercial advantage of using the courts. It was part of the formula for survival and success. During that period, Branson was also ‘piggybacking’ on the vogue for reggae music and welcomed the chance to distribute Atra records, a black label owned by Brent Clarke, a Caribbean. Reggae records had become profitable in Nigeria and Branson was particularly interested in Keith Hudson, a singer contracted to Clarke. By 1976, Clarke suspected that Branson might try to lift Hudson and feared that Virgin’s accounts of Atra sales were inaccurate. A crude check of how many records Virgin had sold suggested discrepancies. ‘You owe us money,’ Brent Clarke told the Virgin accountants to no response. Branson preferred not to take Clarke’s telephone calls. Irritated, Brent and his brother Sebastian called at Branson’s home. The businessman was assaulted and fled. Branson was terrified. In agitated tones, he confessed to Al Clark, his sophisticated publicist, ‘I escaped with my life.’ To his closest employees, Branson appeared to be shaken and deflated by the rancour. But Branson was not prepared to concede defeat. After complaining to the police, Branson arranged to meet the brothers at the Back-a-Yard caf? on the Portobello Road. In what seemed to be a stilted conversation, the brothers explained their case unaware that Branson was carrying a tape recorder provided by the police officers. After thirty minutes, a group of policemen charged into the caf? and arrested the brothers. Both were accused of demanding money with menaces. ‘You’re only accepting his word,’ shouted Sebastian Clarke, ‘because he’s white and we’re black.’ Branson smiled but by the time he arrived at the Old Bailey to testify, he seemed uninterested in the case. His testimony was rejected by the jury and the Clarkes were acquitted. The brothers’ euphoria was tempered by their financial plight. By then, Clarke’s business was bankrupt. The ringmaster did not fear any criticism from his cabal. Most were unaware of the entrapment and prosecution of the Clarkes. In the social and economic misery created by the Labour government, Virgin was a sanctuary where music and enjoyment were a lifestyle. Those gathered around Branson were innocent and even unconcerned about his lurches from persecutor to poacher to self-professed victim. Virgin’s employees were simply grateful to the catalyst for their licence to play. Branson himself was, it appeared, preoccupied with winning the battle for financial survival. Emboldened by his restored finances, Branson was searching for new acquisitions. Established stars were offered huge amounts to switch allegiance. The Marchess group, negotiating with Dave Robinson of Stiff Records, were told by Branson, ‘I’ll pay you double whatever Robinson is offering.’ Melody Maker featured his announcement that Devo, an American new wave band contracted to Warner Brothers, had signed with Virgin. The announcement prompted Warner Brothers to issue a writ seeking to restrain Virgin from inducing a breach of contract and infringing Warner’s copyright. The articled clerk employed to deliver the writ found Branson in bed with two girls. Five weeks later, Warner Brothers was awarded an injunction. ‘I just want you to know,’ smiled Branson at the end of the trial, ‘that you’ve hung me on a precedent set by my grandfather.’ In 1938, Warner’s lawyers discovered, Judge Branson had found against Bette Davis, the actress, in similar circumstances. His calm acceptance of defeat was impressive. Similar to his fearless approach to money and debt, Branson’s undaunted use of the law ranked him as a potential big player. ‘Injunct them,’ he announced in a humourless voice back on the houseboat. Rough Trade, he discovered, a small distributor of records, was selling bootlegs of a Virgin recording. ‘I’m going to get them. Put out a press release and call Harbottle’s,’ he ordered his assistant. The organiser of the Sex Pistols antics had forgotten that Virgin Records owed its existence partly to selling bootlegs. ‘Rough Trade will be ruined,’ his adviser mentioned. Branson paused. He gazed at his two other shabbily furnished barges moored nearby, The Arthur for parties and another houseboat as a private bolt-hole. He enjoyed the barges’ discreet testaments to his wealth. ‘It’s hardly good publicity,’ continued his adviser, ‘when The Sunday Times is preparing its first profile of you.’ ‘Okay,’ agreed Branson reluctantly. The writ was not issued. His attention had switched to The Sunday Times’ interview. He would, he decided, meet the journalist in jeans and barefoot on the houseboat. The backdrop of Little Venice for a hippie millionaire was brilliant theatre for impressionable journalists and he agreed to meet only the most susceptible. He encouraged profiles of himself as the genial, happy-go-lucky face of capitalism, a ‘man of the future’, disguising his workaholic craving for success with the informal backdrop of his humble home. His genius was to disarm any accusations of disingenuity. A handful of sceptics were silenced by his unaffected warmth and the hilarious anecdotes repeated among his loyal employees about Branson’s parties and pranks, and about the spectacular antics performed on the unsuspecting on April Fool’s Day. Virgin’s association with fun won Branson admirers but, like so many clowns performing in the public arena, there were signs of the conductor’s deep-rooted unease. A recent Branson performance – sitting naked on the roof of the manor to attract the attention of a TV cameraman away from XTC playing below to one hundred employees and friends – had aroused embarrassment but he had been oblivious to his guests’ sentiment. Frequently, he thrust his nudity and sexuality into the public arena. All his staff, he was certain, were enthralled by his regular bulletins to anyone passing through the office about his painful circumcision conducted after a misdiagnosed illness; and he delighted in the playground humour of secretaries leaving pornography on his desk or flashing their naked breasts. Attracting attention had become a balm to fill the vacuum of a failing marriage evident by the relationships which both he and Kristen were enjoying with others. The marriage reached its crisis on his houseboat at the end of a drunken meal cooked by Kristen. Their guests, Kevin Ayers, an older, sophisticated rock musician, and Cyrille, his wife, had met Branson at a party, ‘a rich middle-class affair with all the usual drink, drugs and rock and roll’, recalled Ayers. After the meal, Ayers offered the Bransons cocaine. Taking drugs was not unusual for Branson: he had used marijuana and LSD, and cocaine might have been a predictable progression, although twenty years later Branson would deny taking the drug. Soon after, Ayers disappeared with Kristen into the bedroom while Branson stayed with Cyrille. Each would claim that the other partners had sex together but deny the same about themselves. Cyrille, however, complained afterwards, ‘Branson was so cheap, the bastard wouldn’t even pay my taxi fare home’; while Kevin Ayers delighted in stealing Kristen to embark on a long relationship. ‘Branson exploded,’ chortled Ayers later. ‘It’s pathological because he can’t stand losing. For a year, [Branson] kept up a battery of letters, telephone calls and chases across Europe pleading, “How can you leave me?”’ Branson loathed rejection. His unrelenting pressure to encourage his wife’s sense of guilt reflected the pain of his humiliation. At a concert in Hyde Park where Ayers was playing, Branson confronted the musician aggressively. ‘How could you do this to a friend, stealing my wife?’ he exploded, castigating Ayers as an enemy. Branson had forgotten that originally he had lured Kristen from another man. Branson was lonely. Unsatisfied in his own company, he often telephoned Simon Draper late at night to discuss business or arranged breakfast conferences in Draper’s home in Holland Park for ten people. At weekends, he would drive to Draper’s country home, knowing that his cousin had a dinner party to which he was not invited, and impose himself. To avoid a moment’s solitude, he invited his employees to his mother’s house in Majorca. Branson demanded full attention from the Virgin family. He received nothing less. Few rejected their employer’s summons. Solace was found among his employees. One-night stands with secretaries were the topic of constant gossip in his office about the ‘passing flavour’. Pretty young women were the common currency in the music world and the young, unmarried millionaire who enjoyed partying was a magnet for those seeking fun. Most remained discreet about their relationships. Branson was kind and won the women’s respect. Despite the temptation of money, few were inclined to kiss-and-tell. But there was talk about Branson’s strange sexual antics. Crossdressing appeared to be a passion, suggesting something unusually important about Branson’s single homosexual experience soon after his arrival at Stowe. In adulthood, he happily dropped his trousers at parties to reveal fishnet stockings and lacy suspenders; he dressed in women’s clothes and allowed himself to be photographed kissing a man; he performed solo drag acts on the dance floor; and he cavorted naked covered in cranberry sauce. ‘He had this thing at parties,’ recalled Carol Wilson, a senior executive in Virgin Music, ‘of exposing himself all over the place.’ Alison Short, an assistant, was puzzled why he dressed as a woman and was ‘always throwing water over my breasts and rubbing me down’. Regardless of whatever clothes he was wearing, he could rarely resist propositioning women, even those attached to other men. Like a caricature on a seaside postcard, he drooled over big breasted women and few were more amazed by his habit than Tom Newman, the rock guitarist, who stood at the bar of the Warwick Castle, a public house in Maida Vale, with Maggie Russell, his attractive friend, amused by Branson’s unsuccessful attempt to poach. But in 1978, after two years as a bachelor, his fortunes changed. In starkly similar circumstances to his introduction to his first wife at the manor, he spotted Joan Templeman. The Roman Catholic daughter of a Glasgow carpenter, Templeman had been married for twelve years to Ronnie Leahy, a musician in Stone the Crows whom she had accompanied to a recording at the manor. Leahy would say that the marriage was solid and his wife displayed no hint of unhappiness. Yet Branson was smitten by the Notting Hill shop assistant. The opportunity so close to his home and office was too good to miss. Although upset by Tom Newman seducing his girlfriend, Mundy Ellis, and his wife, and distraught that Kevin Ayers had taken Kristen, he was prepared to entice Joan Templeman, a married woman, by siege. In Branson’s mind, Joan Templeman, five years older than himself and whose two brothers were well known in local pubs, was ideal. Besides her good looks, she was socially and intellectually unthreatening, comfortably domestic and yet cool. Whenever Leahy was on tour, Branson sought invitations to dinner parties to meet his quarry. Eventually, his persistence was rewarded. Although in late 1977 Branson promised Leahy that he would leave Joan alone for three months to allow the couple to attempt reconciliation in New York, he reneged and flew over, untroubled by Leahy’s distress. Manhattan was cold and to celebrate their decision to live together, the owner of Virgin headed for the sun in the Virgin Islands. In Branson’s version, he whisked his true love around the idyllic islands on a trip financed by an estate agent to discover his paradise called Necker, an isolated lump of barren rock lacking water, people and animals. Branson would tell friends that the estate agent’s price was ?3 million but that he paid just ?180,000 to Lord Cobham, the owner. The peer, however, would deny owning the island – Necker was owned by a trust – or demanding ?3 million. Branson’s self-esteem was always bolstered by his stories of success. The purchase of Necker imposed a legal commitment to spend a large sum to build a house on the island and provide a water supply. His enthusiasm coincided with his staff, earning by then about ?40 per week, voicing fears of unemployment because his company was once again on the verge of bankruptcy. The following year, 1979, Branson knew that Virgin was ‘virtually bust’ yet, confident about his private finances in the Channel Islands trusts, he bought during the next two years the Roof Gardens in Kensington and Heaven, a popular gay nightclub under Charing Cross Station, using interest-free loans from brewers. ‘Those gays are so neat and tidy,’ he mimicked. Owning clubs excited Branson. He could be the host of a perpetual party, they were useful buttresses for the music business, and Virgin would have a permanent cash flow as a smokescreen against his return to debt. The reappearance of that albatross was the climax of a familiar pattern. The windfall from the Pistols, the latest Big One, had financed expansion into films, video-editing suites, property, the Venue nightclub, Reggae singers in Jamaica and a music business in America. All of those ventures had turned Virgin’s pre-tax profits of ?400,000 in 1977 and ?500,000 in 1978 into a projected ?1 million loss in 1980. Branson was under pressure from Coutts to repay his debts or declare bankruptcy. Nearly everything, he lamented to his staff, would be offered for sale. To keep up appearances, he sold Denbigh Terrace and moved back on to the Duende, his houseboat. Gossip in the pop world about Virgin’s closures and staff dismissals was reported in the New Musical Express. Branson was horrified. The truth about Virgin’s financial plight, he feared, would deter Coutts from continuing their loans. His friendly and unruffled upper-class manner, he trusted, would disarm the suspicious. With equal effectiveness his approach charmed journalists, bankers and on occasion even the police. Twice he had been stopped for speeding along the M4 with John Varnom. On both occasions, to escape prosecution, Branson encouraged Varnom to persuade the police that he was seriously ill and allow the trusting officers to escort Branson’s Volvo to the nearest hospital. Varnom continued his performance until the police had disappeared. On another occasion, Branson produced a driving licence to the police belonging to someone else and successfully escaped conviction. Occasionally, he denied he was driving his white Mini, laughing ‘The police couldn’t have seen me because the car’s got blacked-out windows.’ His similarly fanciful tales to his bankers and staff about Virgin’s finances, relayed in his casual style, were protected by similar black-outs and compartmentalisation. Although he knew that Virgin had ‘no money’, he denied that the company was in financial difficulties. In adversity his resilience and methods were remarkable. New Musical Express was threatened with a writ if the magazine did not publish a correction, whatever truth there may have been in the original article. Rebutting Branson’s denials had become complicated. Under the guise of encouraging individual entrepreneurship, Virgin’s different businesses had been spread in small offices around London, preventing his employees understanding his organisation and blurring his juggling of money between companies. In managing his finances, Branson relied partially upon Chris Craib, a Virgin accountant, to follow his directions on both the administration of his funds and the valuation of his assets to secure ever higher loans from the banks. ‘We’ve spent so much on these things,’ he lambasted the accountant, referring to all the new business he had accumulated by 1981. ‘Surely you can get higher valuations. They’re worth a lot more.’ ‘Nothing more we can do,’ replied Craib, unable to produce the values required to persuade the banks to provide extra loans. To escape that squeeze, Branson’s helpline was his fortune secretly accumulating since 1973 in offshore trusts. Although by law, tax-free trusts could not be used under Branson’s direction, he had little problem persuading the trustees to provide guarantees for a ?1 million loan to Virgin from the Bank of Nova Scotia. Virgin was again saved but the lifeline fractured Virgin’s benevolent character. ‘The men in suits have arrived,’ Chris Stylianou muttered as staff and artists were dismissed, property was sold and costs were cut during that year. Among the minor casualties was Nicholas James of Saccone and Speed, a wine supplier and friend from Stowe who could not recover thousands of pounds from Duveens, Branson’s failed restaurant. ‘I could always get through to Richard until I asked him for my money,’ James would complain. ‘Then he disappeared forever.’ Branson easily lost his sentiment for those no longer deemed valuable to his fortunes. Tom Newman, the whisky-loving recording manager, was deemed dispensable and his stormy departure, abandoning his share options in the manor, passed unmourned. The major casualty in 1981 was Branson’s relationship with Nik Powell. Branson’s childhood friend urged prudence by terminating the contracts with Virgin’s ‘marginal’ groups, the Human League and Phil Collins. ‘Over my dead body,’ snapped Simon Draper. ‘You just spend all the money I save in the shops,’ countered Powell as the temperature rose. Powell was too cautious, Branson concluded. He had lost his way. The triangular relationship was irreparably fractured. In Branson’s new world, accountability to anyone was an intolerable shackle. The ‘mumbling pullover’ as he had become known to Varnom, enjoyed working in a team only if he was captain. Since Powell, despite their friendship and partnership, refused to compliantly follow, he was unacceptable. The partnership, they agreed, should be dissolved. ‘He’s on his way,’ Branson told Draper, a phrase frequently used to describe excluded members of the family. ‘Nik had no particular skills to contribute to the company as it was at that stage,’ was Branson’s less than affectionate summary. But he was correct. His savvy outclassed his friend’s. The unresolved issue was the value of Powell’s 40 per cent share of what Branson called a ‘busted company’. In the final act of severance, even with his oldest friend, Branson wanted to feel that he was the winner. Under Branson’s and Powell’s direction to reduce taxes, the accountants had minimised Virgin’s profits and had accumulated huge losses which were, for outsiders, as unquantifiable as the group’s assets. Not included under the rules of accountancy was the value of Virgin’s music catalogue and the rights to the music and records owned by Virgin. Those rights, Branson realised, were worth unquantified millions. Additionally, there was the secret accumulation of money in their offshore trusts which remained unmentioned in Virgin’s accounts. Under Branson’s guidance, it was finally agreed that Powell would receive ?1 million in cash and some assets. Branson’s problem was producing ?1 million in a way which his accountants would find acceptable. Until 1973, Branson had been officially earning just ?20 per week. Thereafter, his annual salary had been about ?2,000. Producing ?1 million from his own resources as declared to the Inland Revenue was impossible. So instead he borrowed money guaranteed by the trusts for a transaction which was senseless without Branson’s private knowledge of Virgin’s true value. The divorce was finalised on the Duende. The two school friends sat across a round table. Between them was Heimi Lehrer, a solicitor employed by Virgin since 1973 as their property specialist. Barely a word was spoken as the signatures were scribbled. For Branson it was an unemotional moment. The division of the business, he believed, was a limited risk. His demeanour was a disorienting blend of innocence and cunning. Branson did not appear sad about the divorce from his childhood friend. Powell would be airbrushed into oblivion. The gap-toothed grin, suggesting a heart of gold, was replaced by a hard-fixed stare. ‘We’ll trade out of trouble,’ the thirty-one-year-old quipped. Embracing his gambler’s gospel, every crisis was an opportunity and Powell’s departure left Branson with total ownership. One of the few relationships he worked hard to protect was with Mike Oldfield. That was endangered by Tom Newman’s incitement for separation. ‘You’ve got a lousy contract,’ the disgruntled producer of Tubular Bells advised Oldfield. ‘You should break from Virgin.’ Oldfield’s ultimatum terrified Branson. The musician was once again Virgin’s major source of income. ‘We’ll give you a better deal,’ pleaded Branson with the graceless recluse, ‘even though we’re nearly bust.’ Eventually, Oldfield succumbed. The continuing income from Tubular Bells was Branson’s lifeline. Just one year later, in 1981, Branson’s risk paid off. Thanks to Simon Draper and Steve Lewis, Virgin Music produced nine hits to repay all the company’s debts. In a decade of honeymoons, divorces and crisis, he could reflect, the Big Ones had provided singular lifelines until the good times returned. Fortunately, his friendly manner had disguised his rough tactics. Browbeating the New Musical Express about his financial crisis, he smiled, was justified by his survival. 4 Frustrations (#ulink_0d9ecb3c-fe03-5892-8b3c-eb9836824ba3) ‘I can’t find the bathroom,’ explained Richard Branson. ‘Could you come to my bedroom and help me find it?’ At about 2 a.m. in early February 1982 in the Hotel Esmeralda in Paris, Branson had just telephoned the nearby bedroom occupied by Suzie McKenzie. The married journalist was puzzled. After all, Branson had occupied the same room for two nights and over dinner at Juliens, a fish restaurant, he had boasted, while noisily slurping a bowl of mussels, ‘I’ve never lost a night’s sleep in my life.’ She paused. Branson’s breathing was suggestive. He had not been as much fun as she had imagined. Certainly he was exceptional – levering each mussel out of its shell with a soup spoon was bizarre – but he remained enigmatic rather than engaging. ‘I’ll be right over,’ she said. ‘Here it is,’ she announced. ‘It’s behind this door.’ McKenzie smiled. Branson, she decided, was certainly not her type. She walked out. Branson was irked. Poaching McKenzie, he had thought, would be no different from the capture of Kristen and Joan. But attracting intelligent women, he regretted, was difficult. Sophisticated women like McKenzie castigated him as unimpressive and sexually unenticing. ‘A vacuum,’ she later declared. Branson found McKenzie’s disdain inexplicable since admiring secretaries and rock groupies swooned about ‘Richard’s genius’, and more journalists than ever were calling for interviews. Branson had spotted McKenzie at a party which he hosted in early 1981 at his parents’ new house in Surrey. His guests were the staff of Event, a new London listings magazine which he had launched to compete with Time Out. Ignoring Joan’s reprimands about eating with his fingers, drinking other people’s wine and pulling cigarettes from guests for a puff, he tried especially hard to ingratiate himself with his new employees. Dressed elegantly, McKenzie had been standing near the pool. Branson manoeuvred himself nearby. Her splash was loud and his laughter was electrifying. Pulling her outstretched hand, he helped his victim on to the side. Fiercely, he rubbed the woman dry. Some would even swear that he screamed, ‘Oh you are saucy!’ as he joyfully rubbed her breasts and thighs. Ignoring her embarrassment, Branson had invited the journalist to co-host business lunches on the houseboat. As she served lumpy minced meat and warm Hock, Branson encouraged his visitors dressed in suits to believe that McKenzie was his girlfriend, if only to deflect attention from their demands for money and their complaints about his business ethics. Branson had received writs from Mike Oldfield and Sting, and was embroiled in an acrimonious dispute with Carol Wilson, Virgin’s successful director of a music company, who accused Branson of not signing an agreed employment contract. ‘I don’t like this Sting litigation,’ Branson confessed to McKenzie. ‘I feel bad about it.’ He was baffled, he continued, why Dire Straits, the Boomtown Rats and Bob Geldof had all rejected Virgin’s contracts. Surely, he asked rhetorically, they should have been susceptible because he was the amiable alternative to the dull suits. But if Branson’s admissions of failure were designed to inspire McKenzie’s sympathy he was to be disappointed. McKenzie felt she was the target of Branson’s manipulation. But she had misjudged the man. Despite the setbacks, Branson could still conjure success. Branson’s rejection of Nik Powell’s arguments one year earlier had proved justified. Virgin’s profits in 1981, after selling over two million albums of Phil Collins and the Human League, were ?1.5 million compared to the previous year’s ?900,000 loss. His reviving fortunes encouraged the very self-confidence which alienated many of the journalists whom he had hired for Event. ‘You’re all bluster, and you don’t listen,’ Pearce Marchbank accused Branson. The anger of Event’s editor caused the Duende to pitch on the motionless canal. ‘You’re a rock and roll egomaniac who doesn’t understand that magazines take time.’ Six weeks after the launch of the new London listings magazine, Event’s circulation was declining. Branson’s reductions of the budget had reduced the magazine’s size and consequently advertisers were deserting. Branson was unwilling to concede defeat. ‘You’re bringing Virgin down,’ Branson griped to Marchbank. ‘Fire forty staff. Now.’ His second attempt to publish a magazine as a prelude to becoming a media tycoon was souring. Like so many publicity-seeking businessmen, Branson had hoped that Event would bestow glamour, status and influence. Money, he believed, could buy power. A vicious strike in 1981 at Time Out, a unique London listings magazine owned and edited by Tony Elliott, a former friend, had prompted Branson to launch Event to both improve his fortune and social status. Tony Elliott’s staff, anti-Establishment journalists resentful of the proprietor’s right to manage, had for weeks in early 1981 successfully prevented Time Out’s publication. Branson, still irritated by the failure of Student magazine, welcomed Elliott’s predicament as his good fortune. Elliott had been invited to lunch at Mill End, Branson’s new country home near the manor in Oxfordshire. As the lunch drifted into the afternoon and then into the evening, Branson tried to lull his target into a false sense of security. His clumsy social performance, scruffy clothes and appalling table manners, he hoped, would lure Elliott to underestimate his intentions. ‘Let me buy 50 per cent of Time Out,’ Branson offered. Elliott smiled weakly. The predator, he sighed, did not understand. Time Out’s staff would dislike Branson even more than him. Branson was suburban. He was no rebel. His pride was to be the anti-intellectual, a trader in the market and a hero for the aspiring working class. He would make matters worse. ‘No thanks,’ replied Elliott later that night. ‘Bollocks,’ muttered Branson, unable to conceal the hurt. In his mind, business was like the game of Monopoly he played as a child where he customarily placed, against the rules, two hotels on both Mayfair and Park Lane. Any opponent landing on his property was compelled to surrender immediately. Similarly, the pleasure of Elliott’s pain was desired immediately. ‘If he won’t join me, I’ll beat him,’ Branson decided. Copying Elliott’s idea was effortless and enticing Time Out’s staff was the most obvious way to crash fast into the market. There was no hesitation. Pearce Marchbank, Time Out’s designer, was his first recruit. ‘I want to be editor,’ stipulated Marchbank. Since Marchbank could hasten the recruitment of other Time Out staff, Branson agreed. ‘I want Event ready to go in twelve weeks,’ Marchbank was ordered. The only hint of interference during those weeks, Marchbank acknowledged, was the prudent delivery of cocaine to keep the staff awake, albeit without Branson’s knowledge. Ten weeks later, on 18 September 1981, Branson was puzzled. Elliott’s fox had outsmarted Branson’s lumbering hounds. After locking out the strikers, Time Out was relaunched with Mel Brooks on the cover, identical to Event’s planned first edition due to appear a few days later. ‘He’s stolen our idea,’ moaned the advocate of competition, before rallying to tell John Varnom, ‘Fuck. We’re going to win.’ Without warning, on publication day, two weeks later, Branson arrived in Event’s editorial offices in Portobello Road with television crews and his growing entourage. Event was not simply another magazine to earn money for a businessman but Branson’s celebrity launch pad. ‘Here’s my editor,’ he beamed. ‘My magazine will be Number One this week,’ he purred holding up the slick, hundred-page colour magazine. Repeating his predictions on countless radio and TV programmes during the day, he believed, would guarantee fulfilment of his desires. After all, Event looked better than Time Out and the media had, thanks to his ceaseless encouragement, warmed to its birth. In the mindset created by his mother, Ricky always got what Ricky wanted. Every launch, every anniversary in Branson’s world, required a party. Event’s birth was celebrated at Heaven, his nightclub. ‘It’ll send the wrong signals,’ Marchbank complained. Branson was dismissive. Using Heaven saved money and marketing was his speciality. ‘We’ll be Number One,’ he repeated. ‘I know.’ Having persuaded ITV to broadcast the launch party live, the fun-loving millionaire – selling to his generation – had conceived an appropriate stunt. Pranks were often Branson’s cure to fill the embarrassing vacuum left by his lack of substantial conversation, especially when he felt under pressure. Branson fulfilled his mother’s stricture – ‘Ricky do something’ – by often vulgar, sometimes hilarious contrivances. Dressing up or undressing completely, screaming from the top of a tent or standing naked in a street covered with raspberry jam, Ricky begged to be the life and soul of his party. To attract attention at Event’s launch celebration he contrived a ‘drama’. Unsuspecting, Marchbank obeyed Branson’s summons to come nearer the television camera. Handsome, witty and sophisticated, the editor possessed qualities which Branson envied. With a huge laugh, the proprietor pushed a cream cake into Marchbank’s face. ‘Live on TV,’ Branson laughed, convinced of the audience’s appreciation. Marchbank’s reaction was irrelevant. ‘Sales are not much good,’ Branson complained three weeks later. Marchbank urged patience. ‘Magazines aren’t records,’ he replied. ‘You’ve got to haemorrhage money to make it work.’ Haemorrhaging money, however, was unacceptable. Branson was irritated. In the rock world, a big hit guaranteed an immediate avalanche of profits. The mathematics of profits in publishing required careful calculation and an attention to detail which bored Branson. Keeping budgets tight, ‘protecting the downside’, was his philosophy. Innovation was anathema because he eschewed unquantifiable risks. His formula was to pick someone else’s idea and muscle noisily into the market with a fixed sum of money. His gambles, he believed, were carefully controlled. In the launch of Event, his plan had been to replace Time Out, not to compete. Gradual development was not an option. He wanted, even expected, immediate success. He had grown to dislike journalists. They were a breed who enjoyed high living at their proprietor’s expense. Branson’s solution was shock. Publishing embarrassing expos?s about the famous, he hoped, would attract readers. After recruiting staff from Private Eye, whose regular ridicules of himself as ‘The Boy Genius’ he condemned as ‘spiteful’ and ‘slurs’, he ordered Al Clark to publish an account about two senior Fleet Street journalists found copulating in public behind a bush. ‘But they’re the parents of a friend,’ protested Clark. Branson was impervious. Most journalists, he assumed, were pliable. ‘It’s part of life,’ he smiled. Intrusion would sell. Clark resigned rather than become involved in unnecessary vilification. Stepping into the gutter did not rescue sales. Nor did the dispatch of Vanessa, his sister, with her husband Robert Devereux on a horse-drawn coach through London throwing copies of Event to passers-by attract any attention. To succeed, Event required clarity of purpose and originality. Branson offered neither. ‘The budget’s cut,’ he announced after six weeks, pleased that his crude solution stunned Pearce Marchbank. The following week the editor was fired. A man cleverer than him had been decisively humiliated. The blame for any mistakes was heaped on to others. Accepting his personal responsibility for errors was strenuously avoided by Branson. A succession of editors and declining numbers of staff became the pattern at Event. After eight months Branson pondered surrender. As a final throw, he telephoned Elliott late in the evening. ‘I’ll keep pouring money in until you’re finished,’ he threatened. ‘Will you sell Time Out?’ ‘You don’t understand,’ replied a slightly drunk Elliott. ‘If you bought Time Out, the staff wouldn’t respect you. It would signal us going down market.’ Soon after, in September 1982, Event was abandoned. Branson’s ambition had cost nearly ?1 million. The legacy was worse than wounded pride and a pile of debts. Disloyalty, he cursed, had caused the failure. Those deemed by Branson to be culpable were classified as traitors to be punished socially and financially. When they next met at a party, Branson ignored Suzie McKenzie. John Varnom, a loyal founder of the family, was similarly dismissed. ‘We’ll have to find a new home for you,’ Varnom was unceremoniously told as the two men drove together through London. ‘Bugger you,’ scoffed ‘Rasputin’ and jumped from Branson’s moving car to be practically forgotten by the indifferent driver. Martin Tomkinson, recruited from Private Eye, recovered part of his wages only after arriving unexpectedly on Branson’s houseboat and refusing to depart unpaid. Pearce Marchbank issued a writ for ?7,000 for unpaid wages. Refusing to compromise, Branson arrived in court with an army of lawyers. By the end of the first day’s hearing, Marchbank surrendered in the face of unaffordable costs. ‘Virgin’s hierarchy is a laughably primitive tribe,’ moaned Jonathan Meades, another disillusioned ex-recruit, into the wilderness. Branson had purged his organisation but at some cost. After fifteen years of business, he had for the first time created a group of intelligent critics. ‘He’s always harassing folk to win the best deal,’ that scattered group complained. But the army of still-loyal admirers agreed with Branson’s self-assessment: ‘he doesn’t cheat his friends and is generous with employees’. Branson the star, most agreed, was only protecting his reputation. Virgin Music’s fortunes continued to soar. With Steve Lewis’s encouragement, Virgin Music’s deputy managing director, the company had signed Boy George and Culture Club, the world’s latest superstars. As a result, the projection of Virgin’s profits for 1983 was ?11.4 million on turnover heading towards ?94 million. Emboldened by the rash of new Virgin offices across the world and his growing fame, Branson’s braggadocio emboldened him to crush any challenge to his veracity. Over one year earlier, he had become embroiled in an argument with Dave Robinson, a rival producer owning Stiff Records. Like Pearce Marchbank, Branson had expected Robinson to capitulate. The Irishman’s refusal had been galling and Branson hoped to settle the dispute over a round of golf near his country house. Robinson, reputedly, was a poor player. Their dispute centred on a three-year agreement that Virgin’s salesmen would represent Stiff Records for an annual payment of ?120,000. Branson had contracted not to represent any other record label without Robinson’s agreement. But in 1980, unknown to Robinson, Branson had signed an agreement to also sell Island Records. ‘I’m not surprised about Richard,’ sighed Robinson after unexpectedly discovering the secret. ‘He’s a greedy bastard.’ Weeks later, on 2 February 1981, during his negotiations with Robinson’s two managers to renew the contract, Branson formally revealed his agreement with Island Records. ‘You can pay less if you sign a new contract for another two years,’ Branson offered. Robinson’s managers said nothing. Branson was annoyed. Normally, even the most stubborn were persuaded to understand the virtues of his proposals but Robinson refused to sign the new agreement. Branson pondered an alternative plan: he would simply act as if Robinson had agreed to his offer. The attitudes, the morals and the methods of the bazaar had become part of his nature. After an inconsequential exchange of letters disagreeing with Branson’s conduct, Robinson terminated his agreement with Virgin and established Stiff’s own sales force. ‘That’s a breach of contract,’ declared Branson, nettled that his lucrative new plan was endangered. ‘I’ll sue you,’ he threatened. Normally his threats induced surrender but Robinson was stubborn. ‘You’re threatening because you’ve been stupid and lost face,’ retorted Robinson. ‘My managers never agreed to your offer and my letters prove that.’ To try to settle the argument in his favour, Branson had invited the Irishman for a game of golf and lunch. Branson fully intended to win the game. Early on the Saturday morning, he covered the course with the club professional and was still practising when Robinson arrived. ‘Bad luck,’ smiled Robinson on the first tee. Branson’s ball had disappeared into the undergrowth. By the fourteenth hole, Branson was trailing and his ball was lost again. Both men searched through the long grass. ‘Found it,’ shouted Branson smirking in a sandy bunker. Branson swung and clubbed the ball against a tree. Robinson smiled and drove his best shot of the game. At the end of the game, Branson blurted, ‘We’ve never settled our dispute.’ Robinson, victorious on and off the course had been classified as an enemy. Two weeks later, Branson’s writ arrived. ‘I should have let him win the game,’ Robinson lamented. Fighting Branson would risk ?600,000. But the quietly spoken Irishman, puzzled by Branson’s attitude, resolved not to avoid the legal challenge. Breezily, in late 1983, Branson arrived at the High Court in the Strand, in a white, open-necked shirt, bronzed from a holiday on Necker Island. Proudly he stood in the witness box, the only man in the room without a tie. ‘I own sixty companies,’ he boasted to emphasise his substance and reliability, ‘and spend most of my time on the telephone.’ Although he would claim, ‘I never took anyone to court in seventeen years of business’, he did not conceal how much he enjoyed trampling on obstacles. In the relaxed manner of a man accustomed to court proceedings, Branson testified that his case relied on a conversation, an exchange of letters and his hand-written notes scribbled in a large book. To prove his contention that a new agreement had been concluded on his houseboat on 2 February 1981, Branson quoted from his notebook the ‘very favourable’ reaction to his offer. ‘There was never any question of Stiff being unhappy … There was a clear agreement.’ Branson’s contemporaneous, hand-written notes and his interpretation of the letters and conversations appeared to have sealed the dispute. His performance did not encourage any doubts about his accuracy. To his surprise, Robinson was undeterred. Branson froze as the lawyer’s accusation resounded across the wood panelled courtroom. ‘You are fabricating!’ Robinson’s lawyer alleged that Branson was inventing conversations which had not occurred in order to strengthen his case. Earlier, Branson had insisted, ‘I have no motive to fabricate’ but Robinson’s lawyers contended that Branson was ‘fabricating’ evidence. This was not the first occasion that Branson’s veracity while under oath had been challenged. At the Old Bailey, his oral evidence had not been accepted. But this challenge attacked the heart of Branson’s credibility. Robinson’s lawyers were suggesting that Branson fabricated notes after the event to sustain his complaint, an allegation which Branson strongly denied. As his recollection about the conversations was subjected to intense scrutiny, Branson began to contradict himself and deny the credibility of several letters. Suddenly, he paused, searching for answers. ‘I can’t remember,’ he blustered and began to cry. On the knife-edge, the gambler was terrified about the possibility of defeat. At lunchtime, grabbing a pencil, he scribbled a message on a piece of scrap brown cardboard to Robinson: ‘David, you’re a horse-betting man. Spare us the afternoon. Pay up now and we’ll agree to pay our lawyers’ costs. Regards Richard.’ As the court resumed, the cardboard was passed to Robinson. The Irishman shook his head. Branson was incorrigible. He was the same man who would later drool, ‘I was just brought up to behave in a decent way to people. So if someone waves at you, you smile back; if someone says hello, you have a chat. You don’t have to be a complete shit to be a success.’ On the second day of the trial, Branson arrived looking sombre, dressed in a suit and tie. As Robinson’s lawyer pressed to embarrass Branson further, he was halted by Sir Douglas Franks, the judge: ‘I think you’ve made your point.’ The judgement was damning. Branson’s notes, decided the judge, were unreliable. His case was rejected. Robinson was awarded costs. As the appeal court agreed, ‘At business meetings [Branson] does most of the talking and usually gets what he wants.’ But said the judge, even if Branson thought he had achieved what he wanted, ‘I am … certain he was wrong.’ Branson left the court visibly shaking. ‘Something terrible is going to happen,’ Branson confessed shortly afterwards. ‘I just feel it’s all going to blow up.’ Among those witnessing Branson’s unease was Al Clark, unusually welcomed back to the Virgin family. During the eleven years the two had worked together, Clark had watched Branson develop from a stammering youth into an orchestrator of events and people. The Australian, developing Virgin’s investment in feature films, was not the only employee to notice Branson’s jitters. The unreported humiliation in the courtroom could not explain Branson’s nervousness, yet the millionaire repeated, ‘I just don’t see where I’m going.’ Contrary to the image he cultivated of never contemplating failure or fearing the consequences – and contrary to his mother’s self-assuring boast, ‘He’s addicted to danger, of pitting himself against the unknown’ – Branson appeared unexpectedly terrified by life’s fragility. Everything could collapse if he stumbled or missed the next step. The void had to be filled. Constant activity, he hoped, would eventually generate an idea. Thanks to tenacity, skill and opportunism his activity had over fourteen years transformed a failed student magazine into a successful record business. But no magic or new formula had emerged, other than the shameless vulgarity deployed by a trader to outwit conventional competitors. Branson had tried many other businesses during those fourteen years and had often failed. Now, momentarily, he felt blind. The entourage that had produced new ideas was depleted by so many rancorous departures that no one remained to brainstorm for ideas. But, out of the blue, the void was filled by an excitable, fat American lawyer, Randolph Fields. 5 Dream thief (#ulink_479449be-2ad9-58d9-9f65-c4831c9f58e9) Richard Branson prided himself on judging within one minute whether he liked or disliked a stranger. Fat Americans were unlikely to pass his aesthetic test but Branson’s cultivated ambiguity and awkward hesitations disguised his prejudices, especially if an interesting offer was on the table. The thirty-one-year-old American Jew was proposing joint ownership of an all-business-class airline flying between Britain and the United States. In the wake of Laker Airways’ collapse in 1982 and the popularity of People Express, a discount airline, Fields was following the instincts of many regular air travellers entranced by the glamour of public applause and profits. Gut instinct rather than careful research persuaded Branson in ‘thirty seconds’ after reading Fields’s business plan that he was ‘excited’. Despite having risked and lost money in pubs, film production and shops, Branson was undaunted by possibly risking ?3 million on an airline. The son of a former air hostess calculated that an airline would be ‘fun’. With all the tickets bought in advance, there would be huge cash deposits in his bank account. If the staff received low wages like other Virgin employees, and costs were controlled, there might be profits. He could easily persuade Fields to abandon the notion of an all-business-class airline. Over weekends and holidays, businessmen would not be flying. There was, he loved to enunciate, ‘a thin line’ between an entrepreneur and an adventurer. The buccaneer was back in business. ‘You’re mad,’ scowled Simon Draper who, supported by Ken Berry, was appalled by the idea. Branson grinned. His cousin could not grasp the joy for a restless gambler to shift gear. Majestic resolution shone from his face. ‘You’re a megalomaniac, Richard,’ continued Draper. ‘What I’m telling you is that you go ahead with this over my dead body.’ Branson had never welcomed criticism. He was accountable to no one, even to the architect of his musical fortunes. His relationship with Draper was suddenly and permanently fractured. After fifteen years of fluctuating business experience with only one major success, Branson was certain that he could overturn the old adage that the best way to become a millionaire was to be a billionaire and start an airline. A mere four months later, on 29 February 1984, Branson and Fields posed in public to launch their airline. Dressed in First World War flying gear – a leather helmet and goggles – to encourage the newspaper editors to publish a picture, Branson, the new people’s champion, listed the benefits Virgin would provide for thousands of Britons to fly cheaply to New York. No journalist, Branson knew, would question his sincerity. Glossing over weak finances was concomitant with exaggerations about the cheapest fares and minimising Virgin Atlantic’s provision of the same cramped seats and unreliable service as People Express. The photographs showed Fields, the airline’s joint owner, smiling. Disguised was Fields’s frustration that Branson had still not signed a contract or released his promised ?3 million to finance the airline. Branson’s concealment of the disagreement in front of the journalists gave him as much pleasure as dressing up. Disguises of all kinds appealed to him. In the helter-skelter activity to create an airline within four months, Branson had nonchalantly forgotten what he owed to Fields. It was not only the idea of the airline: before their introduction, the American had started negotiations with Boeing to lease a second-hand 747 on condition that it could be returned at no cost after one year; Fields had identified the prematurely retired British Airways and British Caledonian flying crews prepared to work at low salaries; and Fields had recruited the former Laker executives who would hire and train the cabin, ticketing and service staff. Inevitably, the new airline was a clone, an inheritance from all the existing carriers. Taking over the negotiations, Branson assumed the credit for Fields’s achievements and added two new ideas. ‘I know what I don’t like about flying,’ he said. ‘The boredom and not enough leg room.’ The new airline should offer something different. Business class passengers would be given extra space and also individual hand-held video screens with the choice of dozens of films. ‘Let’s announce a ?30 million advertising campaign,’ he suggested. ‘But we haven’t got ?30 million,’ stuttered the new marketing manager. ‘Course not,’ replied Branson, ‘but we’ll announce it, get the newspaper coverage and won’t do anything more.’ ‘Richard’s embellishments’ were introduced to men previously accustomed to routine corporate life. One observed: ‘It seems that he likes multiplying everything by ten.’ Amid the furore and hype, only Randolph Fields stood isolated from the euphoria. The American suspected that Branson was a dream thief. Even after their press conference announcing the creation of the airline, Branson delayed signing an agreement binding the two men as partners. Branson’s delay was deliberate. The partnership with Fields was of little interest unless concluded on Branson’s terms. Contrary to their original agreement of equality, Branson wanted a majority share and control of the airline. Since Virgin Atlantic could only be launched with his ?3 million, Branson began squeezing Fields to surrender. Branson’s favoured method was to procrastinate until the plum fell for as little money as possible. If Fields lacked the cool courage and bargaining strength to outface his demands, that was the American’s misfortune. If Fields departed, Branson would feel no loss. Branson was, however, vulnerable. Unprofitable film investments had suddenly plunged Virgin into another cash crisis. The company’s overdraft was bumping close to ?3 million. He had concealed the crisis from Fields by flaunting the profits Virgin had earned from the success of Boy George’s song, ‘Do You Really Want to Hurt Me?’, and more importantly from the Civil Aviation Authority. ‘I decided not to mention [to the CAA],’ he would confess about Virgin’s application for the original licence, ‘that we were having to pay out large sums of money to continue making 1984’, a disastrous feature film. Unfortunately for Branson, Fields held a trump card. Without an agreement and Virgin’s deposit of ?3 million, the CAA would not issue a licence for the airline to fly. Branson lacked any flexibility to manoeuvre. He signed the contract, deposited the money and invited Fields to the houseboat to celebrate with a glass of cheap, warm white wine. In Branson’s world, signed contracts were only valid if they could be enforced. Whenever necessary and legally possible, he would doggedly renegotiate the contractual terms to tilt the balance in his favour. On the eve of the airline’s launch, he knew that Fields was powerless to enforce the contract they had just signed. Many of the airline’s staff had refused to work with the excitable lawyer and by then Virgin Atlantic Airways was wholly associated with Branson. His threat to Fields was pure theatre: ‘My bankers won’t let me do it. Unless we control the company, we’ll have to walk away from this deal.’ Blaming bankers, like blaming lawyers, was a familiar ploy. ‘I’m having none of this,’ fumed Fields and he stormed off the boat. Branson contacted the CAA. If he quickly reapplied for a new licence without Fields, he inquired, could it be approved? The reply was discouraging. A new application, he was told, would require months to be processed. His stratagem failed. Within the hour, Branson had telephoned Fields and withdrawn his threat. The next morning Branson started again. His aggression was as persistent as his pursuit of publicity. The agreed terms, Branson told Fields, made him ‘feel very uncomfortable’. He wanted revisions. Branson’s style was difficult to deflect. The even-tempered upper-class voice was full of imploring reasonableness. The pullover and houseboat shrieked modesty. Gradually, even the irascible Fields was disarmed. After four days of haggling, Fields’s wariness had become weariness. Finally, he surrendered to attrition. Exhausted, he persuaded himself that Branson was the sort of man he could trust. Under the new deal, Branson would own 75 per cent and Fields 25 per cent of their company. Fields consoled himself that his interests remained firmly protected in the small print. Branson also congratulated himself on winning control thanks to the contract’s same small print. ‘He’s on his way,’ he gurgled about his partner. On 22 June 1984, 34,000 feet above the Atlantic Richard Branson had every reason to congratulate himself. To the sound of Madonna’s hit, ‘Like a Virgin’, he was wearing a steward’s hat and pouring eight hundred bottles of champagne into the glasses of four hundred guests celebrating the launch of Virgin Atlantic Airlines. The party was more than memorable, it was unique. The sight of the famous dancing in the aisles and the pouting, red-suited Virgin hostesses offering food prepared by Maxims was a triumph of Branson’s presentational skills. His tenacity had transformed a rejected proposal by a young American lawyer into a major media event. When his boisterous guests returned to London after another party at Newark Airport, the capital buzzed that flying Branson was fun. No one could recall the austere Scottish gals of British Caledonian or the prim matrons of British Airways running out of champagne during a riotous party over the Atlantic. Virgin, a name until then only known to record buyers, had become a recognisable brand basking in goodwill. In August that year the houseboat was the obvious venue to receive the representative of the Wall Street Journal who sought an interview. Stripped to the waist, wearing baggy trousers, no shoes and with a hole in his socks, the informal tycoon welcomed his guest to spread the new gospel: ‘We’re becoming a global entertainment company and we’re going into the United States big.’ Virgin Records successes, he rattled off, included Genesis, Phil Collins, Human League, UB40 and Mike Oldfield. The Sex Pistols had sold one million albums and Boy George had just scored a major hit in America. Virgin Films had been promised $45 million from investors following the ‘success’ of Electric Dreams due to be released in one thousand four hundred American cinemas, and 1984 was next. Virgin was also launching a music cable channel, a book publishing company, a video game division and a record label in America. ‘That’s how we maximize profit,’ he repeated, mouthing ‘synergy’, the latest clich? of the Bonfire of the Vanities era. At the end of his monologue Branson was satisfied that his guest was suitably awed. No discomforting question required him to reconcile his new global ambitions with his other script, ‘We want to stay small because small is profitable.’ The contradictions had passed unnoticed and no doubts were raised about Virgin’s finances. Branson’s performance had chameleon-like qualities, adjusting itself to please its audience and to distract from any contradictions within. ‘I’m not on a crusade with this thing,’ Branson had modestly told his American interviewer about his new airline. ‘If we had to pack it all in, the whole venture wouldn’t cost but two months’ profit of the Virgin Group.’ ‘Packing it in’ was far from Branson’s mind. The excitement of owning an airline bit deep. His only concern was managing the chaos of operating even one aeroplane. Maiden Voyager, Virgin’s single Boeing 747, was occasionally flying either empty across the Atlantic or airport staff were cowering in fear of lynching from crowds of irate passengers complaining about gross overbooking. Administration and technical troubles were causing delays. Occasionally, flights were cancelled when the plane’s load was genuinely too low to earn profits and passengers were placated by talk of ‘technical problems’. To make a virtue of those problems, Branson regularly telephoned or travelled to Gatwick to apologise to passengers about his ‘teething troubles’. His early flights on Virgin Atlantic’s single 747 to New York convinced him that only ruthless care over his finances would guarantee the airline’s prosperity. The 747’s bubble for business class was often empty during the summer. In winter, he knew, when the major airlines reduced their fares, it would be even harder to fill his jumbo. Copying the blueprint of Laker and People Express had been wrong. ‘I knew we had to start working very hard to make sure that within a few years half the plane would be full of business class passengers,’ he said. The model to emulate, he realised, was British Caledonian. Their extras had established a uniqueness. Copying British Caledonian, Virgin would also offer business class flyers better seats, two-for-one fares, a special lounge at the airport and a free limousine service. Presenting the old as the new was Branson’s genius but one frustration was unassuaged. After the first burst of publicity, Virgin Atlantic had become unmentioned in the media. The indifference was intolerable. ‘We need to make waves,’ he told his marketing executives. Stunts and gimmicks were Branson’s only tool to find thousands of new customers, especially in America. When a couple were bounced from an overbooked Virgin flight to New York and complained that they would miss seeing their deceased son in his coffin before the funeral, an anonymous marketing executive had, on his own initiative, bought tickets for their flight on Concorde. Within minutes of their flight leaving Heathrow, Virgin’s publicity machine fed to the media how Branson’s personal intervention had rescued the heartbroken parents. The cause of their ‘heartbreak’, Virgin’s chaos, was brushed aside. Branson understood how to turn every negative into a positive story. ‘BA has just fired a girl and she’s protesting,’ laughed an aide. ‘Hire her,’ ordered Branson. ‘What?’ ‘Hire her straight away and get the publicists to tell all the media how Virgin saved the poor girl.’ But the small news items could not compete with the big budget campaigns orchestrated by British Airways and the American airlines. ‘They’re so greedy,’ Branson repeatedly moaned, frustrated by BA’s invincibility. ‘They’re so big.’ Influenced by Freddie Laker, he feared BA’s misuse of their huge advantages and goodwill against a newcomer. As a customer, too, Branson had every reason to dislike BA. Despite the appointment of Lord King in 1981 to revolutionise the state-owned airline for future privatisation, the corporate culture still reeked of imperious military officers managing an engineering corporation. BA’s administrators resembled Whitehall civil servants rather than entrepreneurs and most of the cabin staff patronised the ‘punters’, as they unlovingly called their passengers. Branson had good reason to welcome those deficiencies. British Airways’ weaknesses were his opportunity to earn profits, although Virgin’s single Boeing 747 operating on a peripheral route (Gatwick to Newark) against BA’s two hundred and fifty aircraft did not even register on the giant’s horizon. Branson, however, wanted to be noticed, especially to attract passengers. His tactic was to play the ‘victim’ card. His weapons were pranks. ‘We’re the cheeky airline having fun at the expense of a dinosaur,’ he proclaimed. In establishing Virgin Atlantic, Branson had frequently consulted Freddie Laker, the founder of Skytrain which had collapsed in 1982. At their meetings, Laker had inculcated Branson with his complaint that British Airways and the other major transatlantic airlines had conspired to destroy his airline by undercutting Skytrain’s fares. That depiction appealed to Branson. He preferred not to inquire about another cause of Laker’s collapse: that the flamboyant businessman had imprudently purchased three DC-10 aircraft financed by an unprotected ?350 million loan just as fares were tumbling and before he received permission to fly the planes between London and New York. Laker also preferred to ignore his own imprudence, describing Skytrain as the ‘victim’ of BA’s cartel. If any British airline had cause to scream ‘victim’, it was British Caledonian, then British Airways’ national competitor, which operated twenty-seven planes. But the managers of British Caledonian usually desisted. Flying was a cut-throat business and every entrant knew that survival depended upon attrition. Ruthless competition was as natural to Branson as commercial warfare. In seventeen years, he had lied about his finances, he had lured managers, dealt harshly in litigation, denounced friends and had perpetrated a fraud against Customs and Excise. There was an instinctive progression from manipulating individuals in business deals to manipulating public opinion in his favour. Competition, to Branson, implied attacking British Airways. Freddie Laker had attempted the same but Branson subtly concealed his motives – his lust for money and power – by emphasising his altruism. Within days, the people’s champion was conceived and born. His first attack coincided with the traditional autumn slump in ticket sales. In October 1984, British Airways and the American airlines announced their usual price cuts. BA’s was a reduction of ?19 to New York, from ?278 to ?259, just ?1 above Virgin’s fare. Virgin had not featured in BA’s calculations. The four-month-old airline operating between Gatwick and Newark, was invisible. Branson’s remedy, in a deliberate echo of Laker’s campaign, was to bombard the government with complaints that BA’s new price was ‘predatory’ and calculated to destroy Virgin. The complaint was ignored and Virgin’s fares were cut, but in later years sympathetic journalists would accept Branson’s version: the cut in the 1984 price constituted British Airways’ first attempt to destroy Virgin Atlantic. His assertion was nonsense. The real victim in autumn 1984 was Randolph Fields, a casualty of Branson’s ambition to be crowned an airline tycoon. Partners irritated Branson, especially those who criticised his decisions. Field’s latest challenge, Branson decided, was intolerable. ‘Your staff at Virgin are making contracts on behalf of Virgin Atlantic without consulting me,’ complained Fields. ‘I’m a director.’ Additionally, complained Fields, Virgin Atlantic’s avalanche of cash from advance ticket sales was being used by Virgin Records as if there were a common pot. Branson scoffed denial and outrage. Shuffling money around was normal. Intolerant of criticism, he would not be accountable to anyone. Fields had miscalculated: he was about to discover that he had married a vulture. Branson’s tactics were merciless. Formally, Virgin Atlantic announced the appointment of a new director to outvote Fields at board meetings. To stop Branson, Fields appealed to the court for an injunction. He won and departed with the judge’s condemnation of Branson’s behaviour as having ‘left a bad taste in my mouth’. But the American’s legal victory was pyrrhic. Branson ordered that the locks on Fields’s office should be changed. Pleading, begging and screaming with Branson for reason, Fields was reduced to tears by a man whom he damned to his friends as ‘The Devil’. Finally, he accepted defeat and surrendered. In the settlement on 1 May 1985, Branson paid ?1 million for the American’s shares and promised a lifetime of free flights across the Atlantic on Virgin planes for Fields and his family. Branson was content. Knowing that Fields had lost was satisfying. But for Branson, minded to count every penny, the free flights rapidly became irksome. Fields’s frequent use of the concession, he estimated, cost $500,000 in the first year. Branson disputed the agreement and was again summoned by Fields to court. Branson had no chance of winning. The contract unambiguously gave Fields the right to unlimited flights. Branson was nevertheless determined to make Fields fight for his rights, gambling that a judge might be persuaded against Fields. He was unlucky. The judgment was clear and merciless. Fields’s victory found little sympathy in London. The general goodwill towards Branson neutralised Fields just as it silenced Branson’s other victims. His performance was perfect. While Fields complained to friends about Branson’s ruthless negotiations, that image was unknown to most of Branson’s employees and the public. To the vast majority, he was a charming, fun-loving and blessed entrepreneur, readily embraced by the people. 6 The people’s champion (#ulink_a833d176-b576-5f2a-a8a5-6a86c0512458) Scattered in eighteen houses across London, Virgin’s employees were thrilled by the informality and their proximity to Branson’s new fame. Virgin Atlantic and Virgin Music had transformed the company’s foot soldiers into icons of glamour. Young, aspiring working-class secretaries and scrawny clerks relished the opportunity to escape their anonymity and win recognition in the pubs and clubs by announcing, ‘I work for Richard Branson.’ Wherever they held court, regaling envious strangers about the Virgin family, Branson’s army boasted something more important than share options and money. They shone status, a quality of life and a unique qualification for the next job. Employment by Branson was an adventure. The people’s tycoon satisfied their need for moral purpose. ‘And did you see Richard Branson?’ they were asked. ‘See him! I talked and danced with him,’ they sighed about an icon they gladly worshipped. ‘He’s wonderful. And so generous.’ Their audience’s interest and envy compensated for low wages. Annual bonding sessions encouraged staff loyalty. The mystery day trips to Croydon and the Isle of Wight had evolved into wild weekends in foreign hotels. Under Branson’s supervision, the daytime was filled with sport, golf, rounders, cricket and endless pranks and the nights with parties, alcohol, drugs and endless sex. The climax was glorious mayhem. Television sets were thrown out of windows, fire extinguishers were squirted around bedrooms and buildings were trashed. In the spirit of fun, at the centre, was Branson kissing and groping every girl in sight and constantly disappearing into the shadows or passing through bedroom doors. The party habit had been perfected with the establishment of Virgin Atlantic. Since most of the airline’s hostesses matched his stipulation – tall, blonde with big breasts – he knew that if he joined the crew at their Newark hotel, he could probably find one who was willing. Names were never mentioned. Although he was often seen disappearing with a woman, and often with two if he was partying with David Tait in America, or Rod Vickery in the music world, an omerta descended about the night’s carousing. One of the exceptions was Pier Walker, a Virgin Atlantic hostess, who described her weekend’s affair with Branson in New York. Branson’s denial on the grounds of his ‘absolute and binding rule’ never to go near anyone employed by Virgin was a topic of mirth among the dozens of his former employees recalling his enthusiastic chases after female employees. ‘First girl to get them out and shake maracas between them,’ he had laughed at a Virgin party, ‘wins two first class tickets to the States.’ A blonde with big bosoms obliged. Everyone roared their approval and admiration for Branson’s generosity, forgetting that the tickets would only be given for empty seats on his own airline, a cost-free gesture. The following day, everyone was certain that Branson had helped the girl to her home that night but Branson was emphatic: ‘I’m a great believer in sticking with one relationship. Of course, one will get tempted but I have generally resisted temptation.’ In pubs across London in the aftermath of his company bonding sessions, Branson’s disciples spread stories about those riotous weekends. ‘Virgin is so different,’ Jon Webster, Virgin’s marketing director would say. ‘We’re part of one big, happy family with a strong, capitalist money-making ethic.’ Branson’s vulgarity appealed to those flattered to be given opportunities. Not only had he paid for the weekends but also for lovely gestures at the wedding receptions of favoured employees using Virgin’s club in the Kensington Roof Gardens. As the newly weds shook hands with the owner, the King more than once loudly proclaimed, ‘It’s all on me.’ How Branson savoured the cheers, the devotion of his people, but the afterglow was occasionally brief. Some grooms discovered that the largesse was limited and others discovered that Branson’s spontaneous generosity did not protect them from subsequent dismissal. Inside Virgin, the image of ‘generous, fun-loving Richard’ was fiercely protected. No one wanted to contemplate that the millions and the celebrity of an empire spanning music to an airline had changed their hero. For them, he was still the relaxed hippie who would arrive as the guest speaker at the Institute of Directors full of bravado in a jumper, hand-knitted by an aunt, scornful that the expected dress was dark suits. Only the old guard noticed how Branson’s mood and appearance had modified. The hair was slightly landscaped. The beard was cropped. The shirts were ironed. The sweaters appeared to be fitted. The expensive shoes favoured by City magnates now encased his feet. Occasionally he even wore a jacket. The swagger had perceptively matured. His personality had hardened. The joyously rebellious youth had been replaced by a rebel tycoon on a mission. The eyewitnesses to his reinvention remained loyally silent, noticing Branson’s particular sensitivity to the subject of Nik Powell’s departure with comparatively little money despite Virgin’s exploding fortunes. ‘It’s the end of the era of innocence,’ announced Al Clark, the resident philosopher. Branson, they finally began to understand, was no different from any other hard businessman. Among the new casualties was Jumbo van Renen, a black South African, who had worked for eleven years with Simon Draper. Van Renen’s contribution to Virgin Records was considerable but Branson spurned his approach for a pay increase. ‘I’m afraid I can’t pay you more,’ smiled Branson in a superior manner, ‘because it’s only right that we invest all our profits in the company as a long-term strategy. It’s for the good of the family. We’re all one big family.’ Van Renen nodded apologetically but on reflection he began to query Branson’s loyalty to the ‘family’. Branson’s real family, receiving big salaries with valuable share options, were Simon Draper and Robert Devereux – Branson’s new brother-in-law who had been hired in 1983 to manage Virgin’s publishing business – and Ken Berry, the former accounts clerk who owned a 15 per cent stake in the company. Those three, exclusively privy to some financial secrets, and Branson, were the real beneficiaries of Virgin’s policy of low wages. All established offshore trusts and occupied houses bought and maintained by Virgin. No one else shared in this ‘family’s’ fortune. Van Renen had felt betrayed by the stammering performance of Branson as the innocent amateur. ‘I’m leaving,’ he told Branson. ‘Fine,’ he was told. Branson’s eyes showed no compassion. No one was compelled to work for Virgin. His executives and employees could read their contracts. Some might call it self-centred or selfish. He called it commercial. Everything was dedicated to Virgin’s shareholders. In 1982, they had received ?1.4 million in dividends from Virgin. In 1984, the dividend income increased to ?4.5 million. The shareholders were the private trusts associated with Draper, Berry, Devereux and, principally, Branson. His share was being reinvested in the airline, struggling to establish itself. ‘What are we going to do?’ Branson asked his publicists. ‘We need something to get us into the media.’ His 747 was carrying backpackers on cheap tickets and businessmen were still avoiding his unreliable service. The solution, Branson reasoned, was to promote himself. The method was suggested by Simon Draper. Ted Toleman, a friend from the motor racing fraternity, was seeking sponsors to promote his catamaran’s race across the Atlantic. The prize was the Blue Riband cup which had been awarded since 1935 for the fastest crossing. Toleman’s crew included Chay Blyth, the round-the-world yachtsman, and a BBC television reporter. In return for sponsorship, Branson could join as a passenger on the especially named Virgin Atlantic Challenger. Branson knew that the challenge was suspect. The Blue Riband was a competition for passenger liners not speed boats refuelling at sea. But unable to pay New York advertising rates, and planning to defray the costs by finding other sponsors, the opportunity of attracting free attention to himself was too important to miss. The moment of metamorphosis had arrived. The actor’s performance, until then restricted to a handful of spectators, was to be offered to a worldwide audience. Insiders did not spot any hesitation or reflection. After trading for eighteen years, Branson understood all the aspects of his gamble to become a star. The downside made it risk free. ‘We’ll use the 747,’ Branson told Hugh Band, the airline’s marketing director. One hundred journalists were flown on 7 February 1985 above the Scilly Isles to witness, while eating and drinking at Virgin’s hospitality, the finishing line for the crossing. Later, limping into a press conference dressed as a pirate, with a black eye patch and a stuffed parrot on his shoulder, Branson wallowed in the attention of his guests. His easygoing manner and availability encouraged newspapers to repeat his self-description as a ‘daredevil’ for whom ‘a race across the Atlantic is all in a day’s fun for Her Majesty’s wackiest tycoon’. Although the misdescription as ‘the son of a judge and a ballet dancer [who] doesn’t drink much and doesn’t smoke at all’ was mystifying, Virgin’s active press office, primed to demand swift corrections, was grateful that Branson’s occasional collapse into drunkenness at parties and his smoking passed unmentioned. The only casualty was Ted Toleman who was discovering the undeclared price for Branson’s co-operation as he was cast into the shadows. By 10 August 1985, as the catamaran bobbed in the sunlight by a Manhattan quay on the eve of departure, Branson, despite his technical and navigational ignorance, was f?ted in the media as the expedition’s captain. Four days later, after a trip refreshed by refuelling stops, the first ‘race’ ended in disaster. The boat hit some flotsam and sank just two hours from the finishing line. It was an ignominious end to what Chay Blyth described as ‘An easy trip. Not life threatening.’ Stepping from the sinking catamaran into a life vessel, Branson was inspiring his publicity machine by radio to twist his flop into success: ‘Branson – the hero who bravely escaped from the clutches of death.’ Conveniently, Branson’s son Sam had been born during the first day of the journey and a publicist had arranged for Joan to tastefully pose for photographs which were published by newspapers on the front page reporting how the ‘daredevil’ father toasted his new born. He was lionised for his bravery. The thirty-five-year-old Branson could chortle about millions of pounds of free advertising. Even disasters could be presented as a success. Many Britons were entranced. Reservations for Virgin Atlantic increased. ‘Virgin is worth over ?150 million,’ he preened to a television audience, notwithstanding that it still owned just one plane flying one route. His greater bravado was to complete his cosseted transatlantic crossing while disguising his latest financial crisis, during which Coutts had threatened to dishonour Virgin’s next cheque. Branson’s business, employing 1,100 people, was again on the brink of chaos. Financial crisis had become a normal part of life, but the stakes on each occasion were higher. His knee-jerk entry into new ventures – first the airline, then computer games, television and holidays – had sucked cash from the record business. Buying rock groups had become more expensive, costing millions before any profits were earned. Without organisation or accountability, Virgin’s casually managed finances had obscured the losses caused by bad management. Although the company’s pre-tax losses in 1981 of ?1.3 million had improved to profits of ?12 million in 1985, and turnover had risen in the same period from ?30 million to ?152 million, the company had pressing debts of ?7.6 million, tax debts of ?7 million and owed in total ?22 million, mostly on the aircraft’s lease. Branson’s optimism about Virgin Communications, managed by Robert Devereux, seemed misplaced despite his annual report’s reference to an ‘excellent year with turnover more than doubled, with pre-tax profits rising five fold’. As a recent founder of British Satellite Broadcasting, Virgin would be, he proclaimed, ‘in the leading position in the television market in the nineties’ despite offering European viewers old English language television programmes. To fulfil his ambition to own Britain’s biggest international entertainment group, Branson and Devereux required money, creative talent and the respect of the industry regulators. They failed on all the requirements. His salvation appeared to be Roger Seelig, a confident, talented and aggressive merchant banker at Morgan Grenfell. ‘You’re lucky that you can take advantage of lax accounting standards,’ the banker told Branson, surveying a company on the verge of disaster. The best solution, advised Seelig, was to borrow money in the City by floating the company on the stock exchange. The first step was to appoint professional managers. Branson’s instinctive reaction was negative. Outside scrutiny and participation in his secret business was loathsome. But necessity dictated his agreement. At least a flotation would provide money for expansion, settle unpaid taxes and debts, and provide another opportunity to transfer his wealth to offshore trusts to avoid future taxation. Terry Baughan, Virgin’s finance director, was the first casualty. ‘He’s no good,’ Branson was told. On Seelig’s recommendation, in August 1984, Don Cruickshank, a forty-three-year-old accountant formerly employed by Thomson Newspapers and Pearson, was appointed Virgin’s managing director. In April 1985, Cruickshank recruited Trevor Abbott, a thirty-five-year-old accountant employed at MAM, a diversified entertainment company, as finance director. Both were attracted by the glamour of Branson and Virgin. Branson offered something special, even unique, to some professional businessmen. His ‘can-do’ enthusiasm attracted those stultified by business’s traditional hierarchies. ‘He’s a man,’ Abbott soon after remarked, ‘who can turn stone into money.’ At the end of that year, twenty-five City institutions loaned Virgin ?20 million. Suddenly free of immediate financial pressure, Branson focused again on his self-promotional campaign. Only a successful speedboat crossing of the Atlantic satisfied his requirement. The publicity for the failure had been substantial. Success would be a bigger prize. He marvelled at its simplicity. Thanks to the media uncritically reproducing his own comparison of himself with Scott of the Antarctic, the public believed the venture was dangerous. But the crossing on a new boat, refuelled by Esso tankers as his crew were fed hot Irish stew, with the promised support of the Royal Air Force and other rescue organisations, would be safer than a drive along the M4 motorway. Branson’s priority was a better boat, not one built by Ted Toleman. Delivering the message was painful – for Toleman. In Branson’s customary manner, the bad news was drip fed. Not only did Toleman lose the contract for building the new craft, but Chay Blyth was hired by Branson and three of Toleman’s best staff were poached by Virgin, although Branson would suggest that each had asked for the job. Toleman was ‘on his way’. ‘How can we describe Richard?’ Chris Moss, the marketing expert snared by Branson, asked Blyth, the captain of the crossing. ‘Call him skipper,’ replied Blyth, understanding Branson’s vanity. ‘After all, he’s paying the bills. Just call me Number One.’ On 12 August 1986, Virgin’s publicity machine corralled dozens of journalists and TV cameras into New York harbour. Since the single purpose of the trip was to publicise Virgin Atlantic, Branson spoke ceaselessly. ‘We are like Scott of the Antarctic,’ he repeated. ‘We’re proud to follow in his footsteps’. Branson’s generosity towards the media silenced the cynics who had noted the absurdity of the comparison. Linked by radio to Virgin’s control centre in Britain, Branson set off not on a nautical but a journalistic marathon. During the four days, he ceaselessly gave interviews, endlessly repeating the same thoughts of bravery and derring-do. To enliven an unexpectedly dull voyage, the man who was determined not to be forgotten even invented a passing whale to suggest danger. ‘It was just as safe as the first trip,’ Blyth grunted, contradicting Branson’s on-the-verge-of-death accounts. With just two hours to spare, the boat crossed the finishing line. Branson’s luck was extraordinary. Millions were watching the half-time summary of the World Cup in Mexico on television. His success was flashed on the TV screens followed by live pictures of Virgin’s hero. ‘More millions of free publicity,’ crowed Branson. ‘Mrs Thatcher says she wants to see the boat,’ Branson told his publicists. His coup – calling in favours – was remarkable. No one understood how Branson’s personal telephone call to Margaret Thatcher lured the prime minister on 3 July 1986 to the River Thames to promote Virgin. Standing beside Thatcher, Branson sped at 30 knots, unlawfully fast, under Tower Bridge raised in salute to a British hero. Branson never considered the irony that nine years earlier he had deliberately broken the law on the same river to promote the Sex Pistols, thereby financing his pose next to the Prime Minister. All that mattered was the intoxicating glamour and the media attention. ‘He’s done it,’ screamed the Daily Mail’s headline. ‘Richard the Lionheart,’ worshipped the Daily Express. ‘Pride of the Atlantic’, ‘King of the Waves’, ‘Salute to Challenger’, ‘Towering Triumph’, blared other newspapers. In a round-Britain tour, Challenger II docked in harbours to promote Virgin, with Branson making guest appearances. His presence was hailed by ordinary people as historic. Virgin shops reported record sales. Cheered as a national hero, Branson swelled with the adulation. Virgin, he mused, had become more than merely a player. The company had entered the nation’s folklore and he had been anointed an icon. Reality chose that inappropriate moment to bite back. ‘The fans are puking about you and Thatcher,’ Jeremy Lascelles, Virgin Music’s A&R manager, told Branson with an unexpected grimace hours after his return to his office. ‘It’s all very unhelpful with the bands too. They loathe Thatcher.’ Branson was shocked. Thatcherism – the encouragement of entrepreneurship, the privatisation of state industries and the moral legitimacy of wealth – enabled his success and he had occasionally accepted invitations to Downing Street. The ‘hippie tycoon’ and classless toff whose popular appeal straddled social barriers, had never revealed his sympathy for Margaret Thatcher. ‘Most young people in Britain are like me,’ he scoffed. ‘We are more popular than you think.’ Momentarily, Lascelles was puzzled. ‘We,’ Lascelles mused. ‘What does he mean “We”?’ Moments later, Lascelles, a charming musician, believed he understood. Branson was apparently speaking royally. ‘We can do no wrong,’ Branson repeated. ‘You see,’ he told Lascelles, ‘the press are treating us favourably.’ Reality and illusion merged in the hero’s mind, often incoherently. After again posing for newspaper photographers with his children, he pontificated, ‘I would never involve my family with the press.’ Overwhelmed by the celebrity, he could not imagine that an assistant was struggling to persuade musicians to appear in an edition of This Is Your Life to celebrate Branson. ‘People don’t want to know,’ Sian Davis, a publicist, moaned. ‘Even the Human League’s manager said “No”.’ The television programme possibly contributed another subtle change of the chameleon’s colour. The new image was modesty. He eschewed expensive cars, preached that he flew economy class – ‘the extra comfort is not worth the extra cost,’ scoffed the owner of an airline seeking business class passengers – and espoused a carefully refined casual style. With echoes of his sixties credo, Branson chose to speak again as the champion of the people. His natural nonchalance was commercially advantageous. The star had become a valuable commodity. Major corporations were seeking Branson’s endorsement in advertisements. In the new yuppie era, socialism was discredited and wealth was no longer sinful. Branson as the classless, benevolent rags to riches tycoon compared well with the suffocating grandeur of his competitors. But the reality was a lifestyle of extraordinary opulence in a life divided between a large house in Notting Hill, Mill End, his country house in Oxfordshire, and Necker, expensively developed by the company. Hosting parties at the weekend, organising endless sports competitions, ample food and wine and free foreign holidays satisfied Branson’s need for entertainment. Jeremy Lascelles, Chris Moss, Simon Draper and many others loved Branson. He guaranteed fun. Few of the chosen jesters could recall what their host actually said but the safety of numbers protected everyone from boredom. Even a growing habit towards exaggeration – ‘How I signed the Sex Pistols’ – was tolerated. The prankster, placing himself at the centre of attention, conjured scenarios exalting his courage: ‘As I bobbed up and down in the Atlantic in a life raft,’ he prattled, ‘I had this vision of Virgin as the largest entertainment group in the world outside the United States.’ Deluded by his own propaganda and the popular hero-worship, he convinced himself that his business and his methods were sufficiently robust to withstand the scrutiny of outsiders. Fatefully, he decided to ask the public not only for their adoration but also for their money. 7 Confusion and salvation (#ulink_00bea3fd-e2ee-5bf6-8583-3059d75a5e7c) The national mood in 1986 matched Richard Branson’s ambitions. He wanted to lease another Boeing 747 for a new service to Miami and to launch a myriad of other schemes. The only obstacle was his lack of money. Roger Seelig, his merchant banker and a star in the City, offered the solution. Margaret Thatcher’s privatisation of state monopolies had encouraged the public to buy shares. Branson was promised by Roger Seelig that the City would provide the millions he desired. ‘You’ve only got to persuade them to trust you and make them understand that Virgin will produce a fortune,’ soothed Seelig. Selling himself and Virgin to the suits in the City, Branson smiled, was not a problem. He was, after all, a man enjoying effortless access to every minister in Whitehall and was f?ted by discreet invitations to Downing Street and Chequers. He preferred to ignore the humiliation that year as the failed ‘Minister for Rubbish’ after the launch of UK 2000, a government initiative to encourage the young unemployed. In the war of whispers after the Sun had photographed him holding a broom, even the charitable said, ‘He didn’t enjoy or understand the complexity, pace and politics of charity work.’ The more critical charity workers complained, ‘He was frustrated because there was no immediate return.’ Although still bruised by the ridicule heaped upon him for failing to perform as promised, his credibility as a businessman was so pristine that barbs from a handful of critics ridiculing Thatcher’s favourite with a history of fraud, drugs and rock sleaze were easily ignored. The critics did not include the bankers and lawyers whom Seelig had invited to Branson’s home. Averting their eyes from discarded food and dishes lying around the living room, the suited professionals were startled by his young son waddling into the room and asking, ‘Daddy where’s my potty?’ Branson’s guests smiled unctuously. The raw statistics presented by Seelig were encouraging. Virgin’s sales had risen in the twelve months to July 1986 from ?119 million to ?189 million; its pre-tax profits had risen from ?15 million to ?19 million; and the company, including the airline, was employing nearly four thousand people. Anyone querying the enhanced profits for 1985 might have noticed that the accounting period had been changed but that was an acceptable legal technique to improve Virgin’s image as Branson was introduced by Seelig to an unusual tribe from the City. Branson presented himself as the head of a worldwide media empire embracing not only rock music, but also books, films and satellite television. ‘Virgin operates in seventeen countries,’ beamed the thirty-six year old, ‘two-thirds of our income is earned overseas and we’re growing very rapidly. Because of my gut feeling, I’ve set up fifty-five companies and closed down only one.’ Branson knew that his boast was not quite accurate. Many of his small enterprises had collapsed but they were obliterated from the record. His personal bankers at Samuel Montagu in the City remained enamoured. ‘The sweater’s arrived,’ announced the banker as their client, wearing jeans, sat down with a warm grin. The telephone call for Branson interrupting their meeting was a reminder of their client’s fame. ‘Has it got air conditioning?’ Branson asked. ‘And how many hours has it flown?’ Their client, they realised, was being offered a Boeing 747 by Lord King, the chairman of British Airways. At the end of the meeting, his unconventional farewell was amusing. ‘Bugger, I’ve got no change. Can anyone lend me a pound for the Tube back to Holland Park?’ Four hands dived into their pockets and proffered handfuls of coins. His performance was immaculate. Bankers, like his employees, would resist demanding high fees if they witnessed his personal frugality. None contemplated an alternative scenario: that while Branson was congenitally tight with money, he also enjoyed cultivating anecdotes for insiders to gossip around London. Meticulously, he was creating his own legend. The result of those meetings was an unusual package to be offered to the City and the public. To retain absolute control, Branson would sell only 34 per cent of Virgin Music and the other directors would keep 11 per cent. He personally retained 55 per cent of the music company. He would not float Virgin Atlantic or the nightclubs. In an internal transaction, Branson would buy Virgin Atlantic from the new, publicly-owned Virgin holding company for ?6 million. The division of the empire, suggesting inevitable conflicts when Branson’s energies were focused on building the airline, was spontaneously highlighted by the occupants of the bland City boardrooms which he visited during his choreographed journey to recite the identical story to win the trust of investment managers in the fickle entertainment industry. ‘Not much of a problem,’ he replied unconvincingly. Seelig hoped that Branson’s disdain for proper financial accountability and his management by whim would remain as unknown as his unhelpful delight at showing a video of himself free-falling on an unopened parachute towards possible death. Although Branson acknowledged that ‘there was little chance of me coming to grief because of the back-up chute’, his urge to publicise his gamble with death, reckoned Seelig, would hardly inspire fund managers to risk the public’s money in Virgin, even if they saw two instructors clasping Branson as he slid from the plane. Branson’s bravado nevertheless impressed Seelig. The banker was unaware that minutes after landing, Branson had shakily confessed his terror during an interview with Garfield Kennedy, a television documentary producer. On reflection, Kennedy had decided that the evidence of Branson’s emotional collapse was untransmittable, but the producer remained confused. Was Branson’s terror genuine or did he record a performance after Branson had persuaded himself of the danger? A similar uncertainty about Branson struck those seeking clarity about his business. Branson offered no reassuring concessions. Dressed in a pullover and jeans, on his houseboat with four telephones ringing, he explained to an American journalist, ‘I was never interested in becoming a businessman. I’m good at spotting gaps in the market and filling them.’ A man with a goatee beard writing messages on the back of his hand who exclaimed, ‘I want to build the biggest media company in the world’, while admitting confusion about the technicalities of the accounts of his allegedly $200 million company, was struggling to inspire universal confidence. Those concerned about any independent scrutiny of the maverick and his compliance with City rules should have been reassured by the appointment as non-executive directors of Sir Philip Harris, a carpet retailer, and Cob Stenham, the former finance director of Unilever who had just been appointed head of Bankers Trust. ‘I am excited at the prospect of working with such an enthusiastic team,’ said Harris who had pledged to spend ?250,000 of his own money to invest in Virgin shares. ‘It’s an exciting venture,’ agreed Stenham. ‘I admire what the company has achieved.’ Although both men were renowned as astute, independent operators, gossip in the City suggested other flaws in Branson’s business. Insiders described a board meeting of Top Nosh, Branson’s sandwich company, where a director with green hair lay prostrate on the floor recovering from the previous night’s excesses, while another director stared blearily into space silently opening and closing his mouth like a fish. Similar injurious reports mentioned Virgin’s abandonment of film production after an expensive failure with 1984; the loss of money from satellite television and Virgin publishing; and the permanent debts from Virgin’s shops despite copying HMV’s successful Megastore in Oxford Street. Only Virgin Music was profitable but any plans for expansion were vague. ‘Does Virgin ever have proper board meetings?’ Branson was asked during his City tour. Branson was irked. The performance required for the flotation was infuriating. The questions targeted at himself or Simon Draper revealed suspicion about the long-term value of owning the copyright to music and records. He did not care for the ‘clever dick’ who reminded him about the City’s requirement for ‘transparency if you are going to win trust and confidence’. Of course, he withheld some information. His business could only flourish in secrecy. He would not reveal his ambition to buy EMI Music. He would make no concessions to win their trust. Nor would he tolerate the long, technical discussions about taxes and the minutiae of the offer document. Frequently he walked out of meetings with the excuse, ‘I’ve got to make a phone call.’ Draper and Berry could cope. But on one issue he was adamant. ‘I want more money,’ he demanded, gazing at the accounts prepared by Terrence Webber, the auditor. ‘The company’s worth more. I want more money for the shares.’ ‘I can’t help you,’ replied Webber. ‘The rules on valuation don’t allow it.’ Their arguments were endless. The slick presentation before flotation day, 13 November 1986, concealed Branson’s impatience and the City’s bewilderment about Virgin’s real value. ‘After the Big Bang,’ raved the advertisements, ‘how about a little pop?’ A pin-striped stockbroker disco-danced around his office with the caption, ‘From the rock market to the stock market’. Virgin’s publicists had persuaded the Sunday Telegraph to praise the new shares as potentially ‘a great success … a pioneering company which looks like carving out a major role in world markets’. In The Observer, Virgin was extolled as ‘one of the most glamorous flotations this year and should be oversubscribed’. Eighty-four thousand people, Virgin’s customers who idolised Branson, had applied to buy shares. Mobbed by his admirers on the City pavement demanding his autograph, Branson acknowledged the defining moment. ‘I’m humbled by the interest,’ he told the invited media through a permanent smile. The flotation had placed him precisely where he most desired: at the centre of attention. He was a star, who would share equal attention at a concert later that week with Peter Gabriel. The reality, Branson had been told by Seelig, was gloomy. ‘We’re floating at 140 pence per share,’ the deflated banker announced, ‘less than we anticipated.’ Branson was distressed. Too many City investment managers were unimpressed by Branson’s performance and had shied away. Branson had only sold 34 per cent of the company to the public, keeping 55 per cent for himself. Although Virgin was valued at ?240 million, and Branson would personally receive ?21.1 million to invest in the airline, there was only ?32.1 million for the Virgin Group, much less than expected. Branson spouted a smokescreen. ‘We’re pitching the offer low,’ he told interviewers through his fixed smile, ‘to attract a healthy after-market.’ Hours after the first public trading, the share price fell. Instead of the big hit with an avalanche of cash, he was saddled with financial stagnation, City suits, regulations and scrutiny. His cure was to escape. Draper and Berry would manage the music business while he focused upon his airline. ‘What’s the plan?’ he had asked Hugh Band and Chris Moss, the airline’s marketing directors. The two were godsends for Branson, tumbling over with ideas to promote the airline. Their latest idea was amazing. If successful, Virgin would be guaranteed enormous free publicity in Britain and America. ‘Why not try to be the first man to fly across the Atlantic in a hot-air balloon?’ asked Moss. ‘Fucking hell. We’ve got to do it,’ swooned Branson. The two explained that Per Lindstrand, a thirty-eight-year-old Swedish balloon manufacturer and pilot, was looking for a sponsor for the epic flight. ‘It’s an amazing way to promote the airline,’ said Moss. A conversation with Lindstrand confirmed the dangers. ‘You’re going to risk your life,’ warned the Swede. On reflection, Branson realised that he had reached another milestone. The cosy speedboat dash across the Atlantic had reaped a windfall of publicity which in turn had earned millions of pounds for Virgin’s businesses. A record-breaking balloon flight across the Atlantic would elevate him into a unique league. The exposure, he calculated, would produce ?25 million in conventional advertising. There were, he told Lindstrand, some conditions before he accepted. Naturally, there would be no commercial risk, stipulated Branson. Lindstrand would provide the balloon at cost and would not be paid for piloting it across the Atlantic. Branson wanted guarantees that only his bravado and never his terror should be broadcast. Branson would be presented as the captain of the balloon and only he would speak to the media. Lindstrand, the designer, navigator and pilot of the Virgin Atlantic Flyer, was not to talk about the crossing without Branson’s agreement and that would never be offered. The list continued but the Swede was unconcerned. Branson provided the opportunity to satisfy his dream. Although Branson would take a course in balloon flying, undergo some instruction in using a parachute and be shown how to operate a radio, both accepted that the paymaster was a passenger. His talent was masterminding a showcase performance at Sugarloaf Mountain near Boston. Few newspapers and television stations resisted Branson’s personal invitation to witness the preparations and take-off, planned for May 1987. His provision of a satellite transmitter to feed pictures and interviews supplied by Virgin’s own television crew encouraged even those hesitant about pleasing a self-publicist to journey to Sugarloaf and report the possibility of a tycoon’s dramatic death. The countdown began but bad weather delayed the lift-off. Around the clock, Branson, the brave adventurer risking his life for a mention in the Guinness Book of Records, made himself available to journalists and TV crews for endless interviews, even escorting journalists on boating trips to stave off the boredom. For four weeks Branson waited, managing his business in Britain by telephone until in mid-June an urgent message from London interrupted his frustrating routine. A newspaper had discovered that Virgin was to launch a condom. Despite the denials – ‘Your report is extremely inaccurate and misleading,’ brazenly asserted a Virgin publicist – the story could not be suppressed. With one balloon marooned by the weather, Branson dashed back to London to launch another variety. On the transatlantic flight from Boston, Branson explained his latest preoccupation with sex and uttered a doom-laden scare about Aids: ‘Potentially, it’s a catastrophic problem to the younger generation. If nothing is done, we could be talking about hundreds of thousands of people being stricken with the virus over the next fifteen years.’ He proposed a publicity campaign to frighten the British to change their habits. ‘He’s putting something back into society,’ explained his publicists in London summoning a press conference. Branson was associated with a good deed, alleviating the embarrassments of the ‘Minister for Rubbish’ and UK 2000. In mid-Atlantic his alarmism was uncontrolled. ‘Half of America’s population,’ he continued, ‘could die of Aids by 2010. Aids has taken a firm grip on heterosexuals.’ Someone more thoughtful might have been more cautious but Branson was prone to exaggeration: ‘By 2010, one third of the population could be infected with the Aids virus in one form or another.’ Cynics would ascribe Branson’s alarm to his permanent obsession with sex. ‘My principal weakness is women,’ he admitted. ‘I inherited it from my dad.’ Visitors to his office in Holland Park, like the journalist Cherry Hughes, were repeatedly amazed by the ‘over-sexed atmosphere, like a permanent orgy’. The cure was condoms. The brand name, he proposed, was ‘Virgin Jumpers’ to match the colloquialism, ‘Slip a jumper on!’ or ‘Have a jump!’ Durex, the supplier of 98 per cent of Britain’s condoms, had refused to supply Virgin. Instead, Branson had signed a deal with Ansell, one of America’s biggest manufacturers. Ansell had been delighted. Repeatedly, the company had failed to break into the British market and Branson had agreed to underwrite a ?5 million launch. Fortunately for the American manufacturer, neither Branson nor John Jackson, his representative, appeared to have properly investigated Ansell’s misfortunes in Britain. Before Branson landed at Heathrow, outrage had erupted in the centre of London. ‘You won’t guess what’s happening,’ Lawrence Post, Virgin’s company secretary, told Cob Stenham, Virgin’s non-executive director. ‘Richard’s going to give a press conference at Heathrow. To announce Virgin condoms.’ ‘What? When?’ asked Stenham. ‘When he lands from America,’ replied Post. ‘Later today.’ ‘He can’t do that,’ spluttered Stenham. ‘It hasn’t been agreed by the board. It hasn’t even been considered by the directors.’ Stenham telephoned Philip Harris, Virgin’s second non-executive director. Branson, they agreed, should be intercepted and brought to London before he spoke. Both had become irritated by Branson’s behaviour. Ever since the flotation, he was breezily announcing deals – ‘I’ve bought Storm, the model agency’ – without consulting the other directors, and he rarely attended board meetings. Only four weeks earlier Lawrence Post had announced, ‘The board meeting is cancelled.’ ‘Why? Where’s Richard?’ asked Stenham. ‘He’s gone to America to fly on a balloon,’ replied Post. ‘He’s always buggering off when it matters or calling board meetings at ten o’clock at night,’ complained Stenham. Branson refused to be pinned down. Complaints that he was an erratic manager, careless with documents and unaccountable with the company’s money, passed over his head. Despite his responsibility for the public’s money, Roger Seelig’s warning that ‘The City doesn’t like your action-man antics’, had been ignored. If his critics complained about a nightmare, he was unconcerned. The publicity at the flotation had been marvellous but he had moved on to the next idea. Unlike Ted Turner or Rupert Murdoch whom he had vowed that year to overtake, he disliked constant involvement in the detailed development and management of his business. He prided himself on being a deal-maker, ‘good at getting things going’, delegating the management and the chaos to Don Cruickshank, the Virgin Group’s managing director. ‘A publicity-seeking deal-junkie,’ was one director’s seething assessment. Cruickshank, a critical ingredient for the flotation and Virgin’s first employee to wear a tie, was reminding a maverick marketeer that he could not use the public company’s money for private purposes. But Branson had set his annual salary at ?60,000 to justify his staff’s low wages, to minimise his taxes, and to claim expenses from the company. Too often, complained Cruickshank, Branson had issued a company cheque to charge costs incurred on Necker, his private island. ‘But I entertained for Virgin,’ protested Branson, apparently unaware that a public company requires accountability. Cruickshank, he realised, would not accept the legality that Necker was ‘not my personal island but a commercial venture and a successful part of our hotel division’. Sensing that his explanation was rejected, he retreated, ‘It was a mistake. Someone must have used the wrong account.’ No one dared to question how he could afford his lifestyle unless he received money as a beneficiary from the offshore trusts. Branson’s dislike of ‘the onerous demands’ from the City was undisguised. He rarely visited the company’s headquarters in Ladbroke Grove – to the irritation of rock groups playing in the street outside in the hope of a contract – and he sat sullenly at meetings held in Harris’s home because Virgin did not possess a boardroom. Paying dividends to the new shareholders was hateful. Shareholders’ money, Branson appeared to believe, should be his to use at no cost while he pledged his own shares as collateral to raise loans. But he did keenly understand that Stenham and Harris could prevent Virgin’s name on condoms. ‘Why should a music company go into condoms?’ asked Harris. ‘Are you doing it for money, charity or publicity?’ The answer was incomprehensible. Hours later Branson acted contrite. ‘Course they won’t be called Virgin condoms,’ he promised. Whenever a warning sounded, his performance was honed to perfection. His remorse defused the row. The tensions at Virgin were unknown in London during his launch of the renamed ‘Mates’. No one questioned the background of the deal which John Jackson, an accountant, had negotiated with Ansell, to buy the condoms for 4 pence to be resold by chemists and other retailers for 12 pence, undercutting Durex by 60 per cent. Branson was unconcerned by the detail of marketing condoms. His pitch was that by cutting prices he would capture half of Britain’s market within the first year – seventy million units – and treble Britain’s use of condoms. Branson emphasised, in his press conference, his new charity, the Healthcare Foundation, as the fulfilment of a life’s mission. ‘Aids,’ he announced, ‘is fast becoming a heterosexual disease.’ Mates, sold by shops at no profit, would halt ‘a problem which constitutes a crisis of monumental proportions. If it fails, I stand personally to lose many millions of pounds. But it’s a loss I’m prepared to accept because I care for the people who represent our future health, wealth and prosperity.’ No one challenged his sincerity. As he rushed back to Boston, Branson was content that the public had accepted Virgin as a company crusading for humanity to prevent a plague. The new charity had won invaluable attention for himself. If the Virgin Atlantic Flyer successfully crossed the ocean, the publicity whirlwind was limitless. The balloon’s take-off on 2 July 1987 was exhilarating. As he sat in the tiny capsule watching Per Lindstrand navigate and pilot a balloon larger than the Albert Hall along its unprecedented thirty-hour journey, Branson had every reason to celebrate his own courage and foresight. The radio reports confirmed that the take-off had been quite spectacular and that the sudden loss of two fuel tanks which risked exploding into a gigantic conflagration had added to the excitement. The bid to establish a record gave his life additional meaning and distinction. ‘How’s the media coverage?’ he asked ground control. ‘Fantastic,’ was the reply. Branson’s eyes tightened, gleaming with satisfaction. Everything was going to plan. His relationship with Lindstrand, a sombre hired hand, was polite and professional. There was limited warmth between them, which was Branson’s preference. Even in this perilous voyage, he could only tolerate a relationship of master and servant, although he took care to conceal that tension from the video camera fitted in the cramped capsule. Regularly, both he and Lindstrand activated the video to record their activities for a television documentary. One particular touch before the departure appealed to Branson. Ostentatiously he had sat in the hotel cafeteria with two lawyers who had flown up from New York. ‘He’s making his last will,’ whispered Virgin’s publicists. Highlighting the possibility of death was drama. His public gamble against failure would certainly endear him to his many admirers, although in future he would remember, when asked whether he had written a will, to fidget, blush and hesitatingly reply, ‘I really do prefer to keep these things private.’ After twenty-nine hours in the air, the balloon hovered to land in Donegal, the first landfall on the west coast of Ireland. A succession of exposed video tapes had been individually placed in sealed plastic bags inside a red Virgin flight bag lying on the floor. A new cassette was recording as Lindstrand prepared the unprecedented manoeuvre required to jettison the fuel tanks and land the biggest balloon ever flown. Branson sat passively, not expecting the sudden gust of wind which flung the balloon to the ground, pulled it across a field before thrusting it up into the atmosphere. This was the beginning of genuine danger. The balloon’s cables were twisted, its fuel tanks were lost and Lindstrand was battling to bring his cavorting, twisting craft under control. As the Swede coolly drew on every ounce of strength and years of accumulated expertise, Branson exploded in terror. ‘We’re going to die,’ he screamed. ‘We’re going to fucking die.’ Pulling cables, firing the propane burner and trying to navigate, Lindstrand shouted back, ‘Control yourself! We will die if you don’t stop.’ But Branson had lost his self-control. At the critical moment, the daredevil was terrified. Frenzied, tears rolled down a face contorted by anxiety. Lindstrand’s choice was stark. Either he could hold on to the controls and allow Branson to rant, or he could take his hands off the levers and knock Branson unconscious. But the craft suddenly stabilised and Branson calmed. Lindstrand smiled. ‘That’ll look good,’ he nodded. Branson followed Lindstrand’s eye. His outburst had been recorded on the video. Branson’s face froze. His tantrum could be witnessed by the whole world. With ferocious energy, he ripped the cassette from the machine. Oblivious to the continuing peril, he stamped frenziedly on the plastic box, pulling out the tape to destroy the evidence. Glancing up from the mangled tape on the floor, Branson saw Lindstrand. During those moments, the Swede had battled to steer the balloon downwards towards a beach. At the last moment, the craft hit the sea and skimmed across the choppy surface, violently tumbling its two passengers. ‘Get out,’ shouted Lindstrand. The pilot heaved himself through the hatch and plunged into the waves. Branson hesitated and drew back, paralysed by fear. Seconds later the balloon soared upwards. The chance of escape had disappeared. His only reassurance was the sight of seventeen helicopters clinging behind him, led by Garfield Kennedy, the television documentary producer. But once the balloon passed through the clouds, he could only hope that the flotilla would remain somewhere near. Heading north across the Irish Sea, Branson’s options had deteriorated. He could either hope to land in Scotland or parachute into the watery wilderness. For a trainee prevented by Lindstrand from touching the controls during the flight, the predicament was horrendous, especially after he mistakenly assumed that none of the seven radios or the emergency locator transmitter was working. He believed he was almost certainly doomed and scribbled a farewell note to Joan and his children. Leaving the note in the capsule, he planned to parachute into the sea, and opened the door. Quickly, he abandoned the idea and for nearly thirty minutes struggled to close the door. Exhausted, he peered out and saw a Royal Navy helicopter and a destroyer, alerted while on an exercise. Manoeuvring the balloon downwards, he hauled himself up through the small hatch at the top of the capsule and plunged into the sea. He was soon rescued. One hour later, Lindstrand, suffering from hypothermia, was also pulled to safety. During the helicopter ride to Kilmarnock in Scotland, Branson’s sense of priorities was restored. He had successfully won the world record. The publicity prize was secure. Quickly, he persuaded a member of the crew to lend him an alluring red jump suit. As he stepped from the plane on to the tarmac, a waiting crowd rushed to hail the hero. Behind, huddled and shivering in a grey blanket, hobbled Lindstrand. The headlines surpassed Branson’s dreams. A wave of accolades verging on worship overwhelmed Lindstrand’s courageous passenger. In countless British and American newspapers and television interviews, Branson spoke through his smiles with seeming modesty mentioning, ‘How I flew the Atlantic.’ The pilot was forbidden by their contract to interrupt. ‘The publicity would have cost ?45 million,’ Branson later laughed. ‘Even the cover of Newsweek!’ The epic trip had crowned a superstar. Those allowed close were, in an almost religious manner, awed. Abandoned on the capsule was the evidence on the videos of his terror. Strangely, when the capsule was recovered later that day, none of the video cassettes was found. ‘Where are they?’ asked Lindstrand. ‘I left them on the capsule,’ replied Branson. ‘The cassettes were the only items missing,’ replied Lindstrand suspecting that Branson had jettisoned the tapes into the sea to destroy the evidence of his terror. After all, even his farewell letter to his wife was found. Two years later the letter was auctioned by a charity for ?2,500. Even his most private emotions were available for publicity. The hero wanted to rejoice. At his parents’ house in Shamley Green, Branson hosted a party to thank all those who had worked for more than one year preparing the balloon crossing. Standing near the swimming pool, Branson talked animatedly with his father Ted, glancing regularly at the garden door. Suddenly, to a burst of music, it was thrown open. Eve Branson, his sixty-three-year-old mother shrieked her arrival. Dressed as Michael Jackson, the singer, his mother’s face was painted black, she wore a black suit and white gloves, and stood with her arms outstretched beckoning applause. Instead there was an awkward titter. ‘Oh my God,’ murmured the crowd. The moment passed and Branson prepared himself for his speech and the presentations. Four golden medallions hanging from gold necklaces had been specially manufactured for four women who had worked exhaustively throughout the year. Among the four who had been told in advance they would receive the necklaces was Ali Yates, Branson’s project co-ordinator. She had not taken one day’s holiday for eighteen months. Her unselfish loyalty, working eighteen hours a day without any extra pay, had damaged her health. Despite her devotion, she had recently sensed Branson’s inexplicable hostility. One week earlier, at another party, he had ordered her to hand over a special Virgin Atlantic jacket made only for the balloon team to Joan Thirkettle, the ITN journalist. In Sugarloaf Mountain, Thirkettle, an attractive, serious woman, had edged unusually close to Branson, especially after preparing his obituary in case the balloon expedition failed. At their hotel, Yates had one evening watched Thirkettle walk naked out of Branson’s bedroom, clutching her clothes. ‘I’ve just had a sauna,’ Thirkettle unconvincingly explained. A special relationship, Yates assumed, existed between Branson and Thirkettle. That evening at the party, Yates looked uneasily at the woman journalist. She resented losing her jacket and wondered why Branson did not fulfil his promise to find a replacement. Her thoughts were interrupted by Branson’s opening remarks and then his words of appreciation to ‘the four women without whom our success would not have been possible. We’ve had special presents made for them. Step forward, Laurie, Lisa, Fiona …’ Yates knew she was the fourth but was thunderstruck. Branson did not say, ‘Ali’ but instead gushed, ‘Joan Thirkettle’. Yates stood paralysed. ‘I feel gutted,’ she whispered to her neighbour. ‘That was meant for me. He’s betrayed me.’ Branson ignored Yates as she left the party close to tears. Later, revealing that exhaustion from work had brought her close to a breakdown, she received a telephone call from Branson’s office. ‘Richard’s paid for a two-week holiday for you in Greece,’ said a secretary speaking on behalf of Britain’s ninth wealthiest man. Yates was grateful until she arrived in the Mediterranean. The accommodation was uncomfortably cheap and her ticket, she discovered on her return home, was a standby. Barred entry to her flight, she slept overnight on an airport chair. Branson knew Ali Yates would never complain. He credited her silence to loyalty and gratitude. His caprice was never questioned by the beneficiaries of his generous hospitality. Celebrity and success had hardened his attitudes, especially towards a handful of disenchanted admirers. There appeared no reason for him to doubt the public’s adulation. His tiny airline, thanks to the boat race and the spectacular balloon flight, was also acclaimed. Wherever he travelled, he was greeted as a hero. Only a negligible minority carped that Branson, like his balloon, was an overblown container of hot air. To Branson’s misfortune, the dissidents included some powerful voices in the City. 8 Returning to the shadows (#ulink_a6500727-ca1b-5452-a14c-9cc4e892630c) The newspapers’ adulation cushioned Branson from the City’s scepticism. ‘No one’s buying your stock because you’re not wooing them,’ a banker told Branson. The price of Virgin’s shares had barely risen above their offer price. ‘They think Virgin is a shambles.’ ‘It’s the City,’ Branson grumbled. ‘They don’t understand.’ Since he had failed to get what he wanted, the City, he concluded, was unfairly prejudiced, treating him as a hick. Blame was always attached to someone other than himself. He was blind to his own failure to explain his business adequately to the City. The victim overlooked his advantage over the past months – which he owed to the City – of enjoying an interest-free ?200 million loan. ‘They’re only thinking short term,’ complained Branson, forgetting his own impatience with the failure of Event to produce rapid profits. Virgin, he insisted, was undervalued. The company’s profits, according to Virgin’s accountants, were rising dramatically yet the analysts were casting doubts. Branson, they sniffed, had failed to fulfil his promise to produce good profits in America. City analysts, Branson cursed, were a dislikeable breed, ignorant about his business. His irritation in turn aggravated the more conservative financiers. Those same bankers, who months earlier had chuckled about their endearing client driving in a Renault 5 to meetings in the City with packets of Mates spread across the back seat, were also fathers of young children. They disliked Branson’s later collaboration with Michael Grade, the director of programmes of BBC Television, to foist crude sexual descriptions and exaggerated alarm about Aids into young children’s television programmes. Branson nonchalantly rebuffed their comments. Describing sexual acts on children’s television was quite appropriate. Branson was proud of his unconventional values. City practitioners also mentioned rumours about ‘conflicts of interest’. Trevor Abbott was managing the finances in both the private and public companies, suggesting that Branson was managing the music and airline businesses as a single entity. Branson, they murmured, appeared to enjoy the dark. ‘You’re very secretive,’ pronounced one banker. Branson grinned. His youthful manner normally defused tension and disputes. In London’s clubland, Branson’s decision to sell Virgin’s shares in British Satellite Broadcasting (BSB), the satellite television station, to Alan Bond, the Australian tycoon, aroused mirth. BSB had, despite Branson’s bravado, disastrously failed against Rupert Murdoch’s competition. Incompetent management, profligate waste, rivalry among the founders and bad programmes had caused losses of ?60 million. He had hastened the sale after hearing from Per Lindstrand that Bond was on the verge of bankruptcy. The sale of Virgin’s 12.5 per cent stake in BSB earned a ?2 million profit. With hindsight, if he had waited until 1994 when Murdoch floated BSkyB, the joint company, his stake would have been worth ?300 million. But Branson’s ambition to create a worldwide media empire was flawed by his short-term attitude and his lack of creative ability. Robert Devereux’s management of Virgin’s 45 per cent stake in Super Channel and the Music Box was similarly mediocre. Neither Branson nor his brother-in-law were inspiring managers of media businesses. ‘People suspect that you’re not telling us the whole truth,’ continued the banker uneasy about new whispers that Branson was secretly buying shares in EMI, the major record producer. On this occasion the banker’s irritation could not be placated by Branson’s equivocation. Branson, his ‘waters told him’, was holding back. His instinct was accurate. Without retaining bankers as advisers, Branson and Abbott had decided that Virgin should launch a takeover bid for EMI, a company they believed was greatly undervalued. Both were undaunted that EMI was ten times bigger than Virgin and would cost about ?2.6 billion, far in excess of what Branson could raise. The birth of his secret scheme was a shambles. Abbott’s genius was to negotiate a ?100 million loan from the Bank of Nova Scotia, allowing the two to begin spending ?30 million on secret purchases of EMI shares. Occasionally, Stenham and Harris, the two non-executive directors, were not told, which was a clear breach of the company’s rules. Their unusual trade provoked questions around the City whether Branson would bid for EMI. ‘These rumours,’ he replied, ‘have no basis in fact … we have no plans.’ By then, he had accumulated a large percentage of EMI shares in anticipation of the bid. On Monday, 19 October 1987, the world’s stock markets crashed. The value of EMI’s shares fell by 20 per cent and Virgin’s share price collapsed from 160 pence to 83 pence. Undeterred, Branson wanted to launch his bid to buy EMI cheap but, he complained, Harris and Stenham vetoed his plan. Instead, they insisted that Branson should personally reimburse Virgin for its losses. His glacial stare at the directors signalled the beginning of their divorce. That week, Branson travelled with a Virgin executive by taxi to a meeting of Parents Against Tobacco, a group which he sponsored to campaign against the promotion of smoking. The revelation of his secret purchases and his new debts had aroused anger among the bankers at Samuel Montagu. Their reluctance to defend Branson, caught in the public spotlight, intensified suspicions. ‘Give us a fag,’ he sighed to his companion. ‘I’m knackered.’ The City’s distrust could not be dispelled, even after Virgin announced a rise in profits from ?14 million to ?32 million. In the aftermath of the crash, most share prices remained low, and Virgin’s was stuck at around 80 pence, nearly half their original value. Abbott was alarmed. With Branson’s encouragement, he had borrowed over ?100,000 to buy Virgin shares at the flotation. He had lost half his money and could not repay the banks. His secret proposal to Branson was radical. ‘Why don’t we privatise the company? Buy the shares back from the public?’ The flotation, he told Branson, had become an albatross. ‘You can’t borrow money using Virgin shares as collateral,’ he explained. ‘Nor can the music business use the cash generated by the airline.’ Branson listened. His second attempt to establish a music business in America was failing to produce profits. Abbott was proving his value, repeatedly pulling levers and shuffling money to keep the group afloat. Thanks to Abbott’s financial engineering, the recent losses of Virgin Retail had been obliterated by transferring Virgin Music’s profits to the loss-making company. Branson regarded his finance director as a Best Brain, a reliable acolyte. Privatising Virgin was a good idea and Abbott, who could retrieve all the necessary financial information from Robert Ford, the group treasurer, was the ideal mastermind of a horrendously complicated strategy. ‘Tell people I’m losing faith in the City,’ Branson ordered Will Whitehorn, his new spokesman. ‘We’re spending too much time explaining and justifying what we’re doing and we get no benefits.’ Neither Stenham nor Harris would for the moment be informed about their idea. Nor would Simon Draper. Having spent so much on cars, art and property, Branson’s cousin would surely oppose the buy-back as a threat to the value of his shares. ‘He’s lost the plot,’ Branson had sniped. The sombre mood could not interfere with Branson’s 1987 Christmas party. Eighty business associates had been invited to the Roof Gardens in Kensington for a buffet dinner. Unfortunately, he was late, stationary on the A4 driving into London. ‘Richard is inching his way to the Hammersmith flyover,’ announced a Virgin minion over the tannoy. ‘He’ll be here soon.’ Among the guests, Don Cruickshank and Trevor Abbott kept their distance. Cruickshank’s early enthusiasm after recruiting Abbott had soured. Both had been attracted to Branson’s glamour and his heady ability to turn stones into money but gradually their different appreciation of Branson caused conflicts. While Cruickshank, the careful manager and at heart a regulator, had gradually despaired of the maverick’s addiction to a deal-a-day, Abbott had become mesmerised. Virgin, Abbott appreciated, offered the chance to become personally rich. In Virgin’s headquarters on the Harrow Road, the two men argued about Branson’s erratic lurches and his tiring lust for publicity. Initially, both deferred to a man blessed with exceptional instinct but Cruickshank favoured consistent management rather than impulses. Branson had not concealed his preference for Abbott. At the end of a recent dinner, Cruickshank had asked, ‘Who was that sitting next to my wife?’ ‘Phil Collins,’ replied another Virgin employee. ‘Who’s he?’ asked Cruickshank. Branson’s eyes shot up. He sympathised with Robert Devereux, his brother-in-law, who, during an argument in Spain, had pushed Cruickshank into the swimming pool. But Trevor Abbott, Branson believed, was different. The man, unaffectionately known to the twenty accountants rehoused in Holland Park as ‘Black Adder’, knew Phil Collins and loved music. After eighteen months, Abbott had mastered some of the intricacies of Branson’s financial web and had made himself appear indispensable. Working ceaselessly, he spirited the transfers of cash through dozens of different Virgin bank accounts to stave off the perennial crisis. Among the advantages of privatisation, Abbott reasoned, would be the welcome departure of Cruickshank. ‘I want him out,’ Branson had agreed. ‘Richard is now on the flyover. The traffic’s awful,’ intoned the camp voice on the Roof Gardens tannoy. Among one group of bankers, the conversation had focused on the plight of Roger Seelig, the banker, under investigation for participating in a criminal conspiracy to support the price of Guinness shares. ‘Richard has cut him dead,’ revealed one. ‘Bit ungrateful,’ commented another. ‘Considering everything, you’d think he’d stand by him.’ Branson, it slipped out, had become fascinated by Seelig’s pitch of ‘playing with shares’. The banker’s eyes rose. ‘Murky,’ he mumbled. ‘Murky.’ ‘You’ll be pleased to hear that Richard has now come off the Hammersmith flyover,’ gurgled the desiccated voice into a microphone, ‘and hopes to be here in five minutes. The traffic’s awful. He says he hopes everyone is enjoying themselves and says sorry.’ In a corner, Abbott was talking intimately with a solicitor from Freshfields. Their cryptic discussion concerned the secret decision that Virgin should be privatised. Abbott echoed Branson’s complaint that Virgin was grinding to a halt. Across the terrace was Ken Berry who would fly secretly in June 1988 to Tokyo to find an investor to finance the privatisation. ‘I’m delighted to tell you that Richard has just got out of his car and he’s in the hall about to get into the lift. He’ll be with us any moment now.’ Muted cheers and shaking of heads greeted the news. Branson’s narcissism was truly exceptional. No party, he believed, could really begin without him. His entry was modest yet the atmosphere changed. Even dressed casually in a pullover he was imposing. Smiling and greeting his guests, he had no apparent concerns about the latest financial wrangle. Juggling the debts had become a normal daily chore. Bankers, he believed, existed to be used and not feared. He disliked their scrutiny. He disliked the independent directors even more. He would spend Christmas in Necker and reveal his plans to privatise Virgin in the new year. The welcome diversion was Mates condoms. In early January 1988, Branson flew to Russia to establish a Virgin music company in Moscow and consider organising Virgin holidays to the Crimea, a deal offered by the Kremlin over the years to Harry Bloom, Robert Maxwell and other controversial British tycoons. To his carefully selected entourage of journalists, Branson extolled his offer of giving Mates condoms to the Russians. ‘When I travel,’ he giggled, ‘I always pack my Mates condoms.’ Saucy, sexy Richard appeared to be living up to his pledge ‘to put something back into society’. But his performance concealed growing doubts about Mates. Branson had mistakenly assumed that selling sex was no different from selling records. Although thirty-five million condoms had been sold in the first six months, a spectacular success towards capturing one third of the NHS market, the sales of Mates began suddenly to crumble. His publicity campaign evaporated. Branson’s trading loss was over ?1 million and rising. Not only had shops refused to sell Mates for no profit, but the senior directors of local health authorities, the major purchasers of condoms, were rejecting Mates despite the low price. Doctors resented Branson’s gimmicks, especially his giant advertisements on hoardings. Those visiting family planning clinics were rejecting Mates and choosing Durex. Their preference, to Branson’s irritation, was not based on familiarity. In early 1988, Colin Parker at the Family Planning Association received complaints about Mates’ shape and quality, substantiating the instinctive suspicions by doctors and their patients that the cheaper product was inferior. Men were alleging that Mates condoms ‘split’ and ‘burst’. A damaging report in the Guardian had fortunately been retracted with apologies after threats from Virgin, but the newspaper’s appraisal had been accurate. John Jackson, Branson’s appointed condom supremo, had discovered that the American manufacturer, to save money, had failed to conduct air inflation tests on the condoms. In the rush to finalise the deal, Branson and Jackson were unaware that Ansell’s factory in Alabama had also suffered production problems. Subsequent scientific research would confirm that Mates gave ‘a sub-standard response to the airburst test’. Edward Shaw, Mates’ marketing manager, reported that Branson’s challenge to Durex was provoking customers to castigate him for ‘obviously just sticking his finger in the pie because it was another big market to make lots of money’. ‘We’re getting out,’ was the message. The complaints and scepticism about his altruism were harming Branson’s image. After one year, with estimated losses of ?4 million, Branson sold Mates back to Ansell (Pacific Dunlop) in return for a ?1 million payment to the Healthcare Foundation. The Americans were delighted. Their association with Branson had been profitable. Thanks to his publicity campaign, especially on BBC Television, Ansell’s share of the market, after improving the condoms’ quality, would increase to 16 per cent and, after increasing prices to equal Durex’s, the company would earn a healthy profit. Branson’s declared mission to encourage a significant increase in the use of condoms had failed; and, contrary to his dire predictions, in 1999 four hundred and not tens of thousands of people died in Britain of Aids. It was a saga, like other failures, he gradually washed from his biography. Unpleasantness was best forgotten or delegated to others. Branson, the chameleon, soon forgot condoms and focused on the privatisation of Virgin. The revelation of his plan to Draper, Harris and Stenham was assigned in February 1988 to Abbott. ‘We’re going to explore the possibility of going private,’ Abbott announced. Harris and Stenham stared silently, evidently displeased. This latest shock would be expensive and Branson did not have any cash. How, they wondered silently, could he afford to service the huge loans to buy back the shares, and repay Virgin’s existing debts of ?109 million? A meeting was arranged. ‘Have you got another buyer?’ Branson was asked by Stenham, a non-executive director. ‘No,’ he was told. Branson’s hesitant style, the inscrutable trademark of the benign English amateur, placed him above suspicion, even if the doubts remained whether he was knowingly breaking the City’s rules or was unaware that the rules even existed. Anthony Salz, the solicitor at Freshfields, some Virgin executives suspected, would at some stage be consulted, but he only answered to Branson. Yet Branson’s vaunted declaration that ever since his Customs fraud, ‘Every single decision since has been made completely by the book’ was hard to dislodge. Neither director would be informed about Ken Berry’s approach four months later to Akira Ijichi in Tokyo. Berry, looking for $150 million for a 25 per cent stake in Virgin Music, insisted that their meetings had to remain secret. The Japanese accepted Berry’s explanation: ‘We want the money for expansion. To sign new artists.’ Ijichi did not realise that Branson needed the money to repay his debts after privatisation. The president of Pony Canyon, a subsidiary of Fujisankei, the giant Japanese media company, agreed that he would come to London after making preliminary inquiries. He was delighted to be bound by Berry’s request for secrecy. The privatisation of Virgin was the most delicate operation Branson had ever faced. He needed to conceal any negotiations with the new investors and plan how to minimise the inevitable antagonism in Britain. Four weeks later, in early July, Frank Kane, a financial journalist employed by the Sunday Telegraph, telephoned Will Whitehorn, Branson’s new spokesman. ‘I hear that Richard is intending to take Virgin private,’ said Kane, relying on a tip from a merchant banker. ‘I’ve talked to Richard about this and there’s nothing in it,’ replied Whitehorn convincingly. ‘Even if there was, we couldn’t say because of Stock Exchange rules.’ With that careful justification, Whitehorn smudged over the truth. ‘It’s the worst deal I’ve ever done in my life,’ Ken Berry was cursing to anyone within earshot in Virgin’s offices about the planned privatisation of the company. ‘All just to bail Richard out of his filthy, stupid deals.’ Sitting on the Duende on Regent’s Canal with a group of bankers from Samuel Montagu and Abbott a few days later, Branson, dressed in jeans and barefoot, was staring at a hole in the window. ‘Someone tried to shoot me,’ he laughed. The bankers were unsure whether Branson was telling the truth or seeking to impress them. They harboured mixed feelings. Some were enthusiastic about the flippant schoolboy. Others had become disillusioned but, in the interests of earning their fees and future business, concealed their emotions. All agreed that Branson’s swift withdrawal from the stock market would terminate any chance of Virgin’s acceptance as a substantial, orthodox corporation. Ken Berry’s anger, everyone rightly assumed, referred to the huge loans which Virgin required to buy back its shares. No banker was aware of his journey to Tokyo. Конец ознакомительного фрагмента. Текст предоставлен ООО «ЛитРес». Прочитайте эту книгу целиком, купив полную легальную версию (https://www.litres.ru/tom-bower/branson/?lfrom=688855901) на ЛитРес. 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