or I could put it into Time Out.’
Elliott, who was a little drunk at the time, took a deep breath before he responded.
‘Richard,’ he said. ‘There’s one thing you don’t realize. You should stop this mission to acquire all or part of Time Out. At the end of the day, my readers don’t respect you. They see you as an opportunist, as someone without genuine cultural integrity.’
Cultural integrity he may have lacked; but Richard Branson had an almost unlimited capacity to swallow failures and humiliations. ‘Business opportunities are like buses,’ he liked to say. ‘There’s always another coming along.’ And so with barely a pause for self-doubt, Branson plunged back into the daily concerns of his record business, his ability to sniff out a good deal heightened by the awareness that Virgin’s losses on Event had brought it perilously close to insolvency. It was not to be long, however, before Branson’s thoughts had returned to publishing. If he was not cut out to be a magazine proprietor, why should he not own a film company? A video production business? A cable television company? A radio station? The thought may even have crossed his mind, albeit briefly, of owning a newspaper.
Unfortunately, the early omens were not good. Branson already owned one publishing business, known as Virgin Books, and it was not going well. He had received an approach in 1979 from a man called Maxim Jakubowski, whose main area of expertise was in the food industry but who fancied himself as a publisher of books. But Jakubowski was not as successful a publisher as he was a negotiator; and in less than two years, it had become clear that Virgin Books was in trouble. Among the weird ideas he had put into practice was a series of short novels written by rock stars; at one stage he even wanted to publish a book about chickens that had appeared in the movies. But the company’s core problem under his stewardship was that it was trying to do too many things. Unable to choose even between fiction and non-fiction, Virgin Books was a small and not very successful publisher. In an ill-advised interview with the Financial Times, Branson had boasted that the company would publish books by undiscovered young talents, and would be looking for the literary equivalent of Mike Oldfield. It never found it.
Even before relations with Jakubowski began to deteriorate, however, Branson realized that he needed to bring someone into the publishing company whom he could trust. He knew exactly whom to ask for advice: his younger sister Vanessa’s boyfriend, Robert Devereux, who worked at Macmillan, one of the grander names in British publishing. Devereux was twenty-five years old, and very bright indeed. He also had the tactical advantage of having beaten Branson regularly at chess. A lunch was arranged on the houseboat to which Devereux brought with him Rob Shreeve, his boss at Macmillan. Branson put his proposal: the two men should come to Virgin and sort out its books business. Shreeve, older and perhaps a little wiser than Devereux, wanted to know just how committed Branson was to his book publishing division. How much money did he think he would be able to invest in it? How many titles might it expect to bring out over the coming year? Whatever the answers were, it became clear that Devereux would join Virgin; Shreeve, though grateful for the lunch, would politely decline.
Devereux moved fast on his arrival at Virgin Books. He fired some of the staff, and frightened others into working harder. He threw out Jakubowski’s strategy, and tried to decide how the small publishing company he was now in charge of should seek to compete against the corporate giants. Devereux’s first major decision was to stop publishing fiction. Instead, he ruled that the firm should concentrate on quick, preferably cheap, books that would appeal to young people. While the rest of the publishing world was going collectively mad, paying huge advances to a small number of star authors that could never be recouped in royalties, Devereux preferred to think small. He was successful. Virgin Books stopped losing money; over the coming few years it began to acquire a reputation as a serviceable publisher of books about rock, sport and video games.
But Devereux could not satisfy his ambitions by staying the managing director of a small publishing house. He wanted more responsibilities inside the Virgin Group, and with the help of Richard Branson, who had become his brother-in-law when he married Vanessa Branson, that was what he got. Branson’s closest advisers, Simon Draper and Ken Berry, viewed Devereux with polite suspicion when, still under the age of thirty, he joined the board of the Virgin Group. ‘We all liked him and were very impressed by him,’ recalled Draper, looking back on his feelings during the 1980s. But Devereux seemed to be trying to out-Branson Branson. ‘He thought, “I can play bridge better than Richard, I can play sport better than Richard, I can be Richard.”’ To Draper’s mind, Devereux’s self-appraisal was wrong. What Devereux lacked, for all his cerebral qualities, were his brother-in-law’s uncanny ability to inspire not merely great loyalty but also enormous effort among those who were working for him.
Those who were sceptical of Devereux’s abilities felt they had been proved right when he persuaded the board to take a 20 per cent shareholding in W. H. Allen, a publishing company that had lost its market edge. Having merged Virgin’s publishing interests into the firm, and then invested substantial Virgin funds in Allen, Devereux then allowed the existing management to carry on running it – and it was not long before Virgin was required to take a controlling stake in the company, cut out most of its unsuccessful operations, and write off substantial losses.
The company’s forays into film-making were only marginally more successful. Robert Devereux and Al Clark, the company’s erstwhile press officer and Events editor, made a little money for Virgin by topping up the finance of a couple of low-budget films, one called Secret Places and the other Loose Connections. They went on to put £4m into Electric Dreams, a high-tech love story directed by Steve Barron, a maker of pop videos. The film, whose soundtrack included a number one hit from the Human League’s vocalist Phil Oakley, produced a modest return for Virgin, made more attractive by the fact that under specially favourable tax treatment for investing in British films, the Inland Revenue allowed Virgin to deduct its entire investment in the film from its taxable income for the year. But Virgin seemed somehow unable to leave this small but successful division where it was. The next project, brought to Virgin by Simon Perry, the producer of Loose Connections, was to turn George Orwell’s novel of Stalinist totalitarianism, Nineteen Eighty-Four, into a film. It was not the first time a film of the book had been made; thirty years earlier, in the optimism of a fast-growing postwar society, a sanitized version with a happy ending had been put out. But there would be special resonance to releasing the film of Nineteen Eighty-Four in 1984. It would cost just under £2m, and the director would be Michael Radford, Perry’s partner.
When the proposal was brought to him, Branson agreed to back the film. John Hurt and Richard Burton were lined up to star in it. Before shooting could commence, however, Virgin received a piece of bad news: the film was going to be a little more expensive than its makers had expected. Instead of £2m, Virgin should now expect to stump up £2.5m. So convinced was Branson that Perry and Radford were going to pull off a masterpiece that he was bid up to £3.7m, and then, as the film continued astonishingly to overrun its shooting schedule and its budget with equal abandon, to £5.5m The meeting at which that figure was first mentioned in Branson’s hearing was a difficult one.
Still Virgin and its chairman appeared to be dazzled by the glamour of the movie business. Instead of doing what most investors would have done – sacking the producer and director, and replacing them with a pair of placemen who could be relied on to get the film in the can and then distributed with as small a loss to the backers as possible – he allowed Perry and Radford to finish off the project. But the greatest disagreement was still to come. In the hope of making the film a commercial success, Branson had arranged for the Eurythmics to produce a soundtrack. The music they came up with, assembled with breathtaking speed in a Caribbean studio while the band were serving out their required number of days of tax exile, was an impressive piece of soundtrack, but it seemed to have little connection with the movie. Perry and Radford insisted that they should use a soundtrack already written by Dominic Muldownie, which they considered far more suitable. If Branson did not agree, they said, he was welcome to distribute the film with whatever soundtrack he liked; but they could not be expected to talk of it as their own.
Faced with this threat, Branson looked for a compromise. The Muldownie soundtrack was used for the reviewers and the