penalty for what he had done was two years’ imprisonment, the investigators seemed to have no special desire to send Branson to gaol. True to their occupations as taxmen, what they wanted instead was money. Before the case came to trial, therefore, Branson and the customs settled their little dispute as follows: he would make an immediate down payment of £15,000, and would then pay taxes, duties and charges to the tune of another £38,000 over the next three years. Given the size of Virgin at the time, these were daunting sums of money to find. But he would have no criminal record, and he was free to go back to his mail-order business.
When they heard the story on the night after Branson’s appearance in court at Dover, Caroline and Rob Gold were sympathetic. But they were hardly surprised. Some weeks earlier, Richard Branson had discovered that Caroline’s father, Francis Rodgers, was a shipping agent who had just set up a containerized freight business. He had approached the older man with a request for advice and for a place to store some records. Caroline was not present at the conversation. But Francis Rodgers left her in no doubt: he had smelt a rat, and wanted nothing at all to do with the scheme. The customs scam was no adolescent mistake, as the investigators might have inferred from Branson’s earnestness and youthful enthusiasm; it was a deliberate and quite knowing attempt to break the law and get away with it.
Luckily for Branson, his neighbours on the canal saw no reason to be judgemental on the matter. More luckily still, the Customs & Excise never found out about Branson’s approach to Francis Rodgers. By the time they had begun to investigate the customs fraud, Caroline Gold had already given up her job to have children. She was no longer an employee of Richard Branson’s, so nobody ever thought to interview her.
‘NIK AND RICHARD,’ Simon Draper would later recall, ‘had no particular feel for the music business. They found themselves in it by accident. They were public-school boys who had dropped out of education.’
While the two budding entrepreneurs did what they were good at – Richard sweet-talking the press and striking daring deals, the more introverted Nik reading his management magazines and trying to think of ways that Virgin could cut costs – they needed some real musical expertise. Steve Lewis, for all his encyclopaedic knowledge of Motown, was at first only a part-timer, he was also still at school. Tony Mellor, a former trade union official, had been in charge of buying stock for the mail-order company and the shops; but he soon disappeared to America, never to be seen again. So there was a vacuum for Draper to step into. After Branson’s brush with the Customs, it had become clear that Branson’s plan to start the record label would have to wait a little. In the meantime, Simon Draper would become the company’s record buyer.
Over the next two years, Draper’s work gave him an invaluable insight into the sort of music that would sell. Although the record shops and the mail-order business were not profitable, they were a goldmine of information about the likely future habits of the record-buying public, for the tastes of the Virgin clientele were more adventurous than those of the average teenager. For instance, the mail-order company received a growing number of requests for records by an obscure German band called Tangerine Dream, which Draper fulfilled by finding out where the records were produced and then buying a job lot of them. So it required no great insight to see that the band might be worth trying to acquire for the new Virgin label. ‘When we signed Tangerine Dream in 1974,’ said Draper, ‘it looked like clever stuff. But we knew it was going to sell.’ It did – by the million.
The great coup of Virgin’s early years came via a different route. While the Manor was preparing for the first formal booking of its recording studio in 1971, an obscure band was allowed to come and rehearse there. During a quiet moment, one of its members produced from his pocket a demo tape that he had made and handed it over to Tom Newman, who was in charge of the studios. This was an occurrence that would become tiresomely familiar to anyone involved in the record business. But Newman listened to the tape, and he liked it; so did the other Virgin people he played it to. A few weeks later, he came back to the guitarist and told him that he should try and get a recording contract.
Simon Draper heard the tape later that year, by which time the young guitarist had been turned down by almost every record company in London, and pronounced it ‘incredible’. He took a copy home to his flat, and played it time and again to anyone who would listen to it. The recording elicited an extraordinary reaction. When Virgin Records was ready to start its label, Draper decided, he would tell Richard to sign up Mike Oldfield.
Oldfield was an unlikely pop star. Son of an Essex doctor, born in Reading, he had an unhappy childhood; his mother drank too much and was prone to roller-coaster changes of mood. By the end of his teens, it was clear that Mike, too, was unable to face life as an independent adult. He was painfully shy, and was as lacking in self-confidence as Richard Branson was full of it. Women were attracted to him, not so much for the physical charms of his underdeveloped body and adolescent beard as for his air of vulnerability and for his bouts of depression from which only constant reassurance and attention could redeem him. Yet Oldfield was by no means an inadequate musician. He had been playing guitar professionally for five years, and had made two albums with the Whole World, Kevin Ayers’s group. He had made the demo tape that he had given to Tom Newman entirely on his own, working painstakingly at home on a battered Akai tape-recorder that Ayers had lent him.
Oldfield arrived at the Manor at Draper’s instigation, and spent a week in the recording studio there without even having a written agreement with the Virgin record label. In the event, there was no hurry; it was to take months of work before the album was ready. Oldfield played more than twenty different instruments, laying each performance down on the tape on top of the mixture that was already there. This procedure, known as ‘overdubbing’, allowed him to build up a full-length instrumental album with only incidental help from others. It was a challenging use of the state-of-the-art recording equipment that Branson and Newman had agreed to buy. The machinery stood up to the punishment, but the tape did not. After being passed across the heads thousands of times, the master tape of Tubular Bells came dangerously close to wearing out. For Oldfield was not content to remake what was already on his demo tape, and to finish off the as yet uncomposed second half of the record. He wanted to polish and repolish; hence the weeks of work.
Richard Branson had been to a trade fair in the meantime, and had been warned that it would be commercial suicide to publish a record without any lyrics. Once persuaded, however, he set to work with gusto. By the time the album was complete, Branson had managed to learn a little about music industry contracts. He had asked Rob Gold, his houseboat neighbour, to explain to him how record companies worked – and the obliging Gold had put down the basics on a single sheet of yellow foolscap paper. ‘He hardly knew what a record was,’ Gold recalled. ‘I told him that you go to a distributor to distribute your records, and that you get more if you’re a production company that makes its own records. Your percentage is higher if you do your own marketing.’ Crucially, Gold also told Branson what sort of figures he should be aiming at.
The deal that Branson struck with Oldfield was a standard record industry contract of the time. In fact, it was copied directly from an Island Records contract that Branson was given a copy of. Oldfield would give Virgin worldwide rights to Tubular Bells and to a fixed number of albums that he would make after that. In return, he would be paid a flat-rate royalty of five per cent of sales (but not on samples or records returned by retailers). He would also receive the equivalent of an annual salary of £1,000 a year, though this would be deducted from any future royalties he might earn.
This deal was no less attractive than the deals which hundreds of other aspiring rock stars had received; in fact it was more attractive, since Oldfield had failed to find a recording contract with a number of other labels before coming back to Virgin. But the seeds of ill-will were laid in that agreement. Oldfield had signed at the kitchen table of the Manor, negotiating directly with Branson. More important, the albums he was contracted to produce could easily be ten years’ work; they would certainly tie him to Virgin for a period of time that was longer than the