Branson. Tom Bower

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СКАЧАТЬ 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 façade 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. СКАЧАТЬ