Branson. Tom Bower
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 mêlée 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