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 premiere; once the film was on general release, however, it would be replaced by the work of the Eurythmics – provided market research supported the view that audiences did not actually object to the more commercial rock soundtrack. In November 1984, a month after the film’s release, Radford took the opportunity of giving an acceptance speech for an award for best British film of the year to attack Branson’s company for having ‘foisted’ the Eurythmics soundtrack on him. That was embarrassing enough; Perry them compounded the sin by giving an interview to a gossip column in the Daily Express, in which he blamed Branson’s inability to sell the film in the United States on his ‘inexperience’, and threw in an accusation of lying for good measure. Branson threatened to sue for libel.
The small satisfaction was that Perry and the newspaper caved in quickly, apologizing and withdrawing the allegations, agreeing to pay Branson’s costs as well as their own, and making a donation to charity. But for Branson, the losses he made on the film came with an important lesson. Never again would he be tempted to set aside his own commercial interests for the sake of backing a director who wanted to make a masterpiece. In media businesses – whether records, books, films or magazines – the proprietor had to stay a little aloof from the product. Once he became too swept up in the creator’s enthusiasm, his financier’s judgement was sure to suffer.
Do You Really Want to Hurt Me?
IN PRINCIPLE, there was no dispute between Richard Branson and Nik Powell about how they should respond to the harsh economic conditions of 1980. But the two men had different pet projects. In 1978, Branson bought a private island in the British Virgin Islands for $300,000 from a cash-strapped English aristocrat. He then spent nearly £1m buying two clubs: the Roof Gardens in Kensington, and Heaven, a nightclub near Charing Cross that was the largest gay club in Europe. Powell, by contrast, had been the leading light behind a plan to spend a similar sum on converting a cinema in Victoria into The Venue, a combination of restaurant, bar and concert place.
These two interests were a source of conflict: Powell complained that the island was an indulgence, and feared (incorrectly as it turned out) that the two clubs Branson had acquired might not make money. For his part, Branson felt that the Venue made demands on their time that were disproportionate to its importance to the Virgin Group. Everything there seemed to be a problem. Planning permission came only at the last minute, and Branson himself was forced to intervene to get even trusted members of staff to sell tickets for performances there. The waiting staff were paid very low salaries, and had to be placated at Christmas for the absence of an expected bonus with individual presents wrapped up by Nik Powell and Barbara Jeffries, the Venue’s manager at the time. The working conditions there brought bad publicity to the group when Private Eye began to run articles claiming that the Venue’s waiting staff and the bands who performed there were being exploited, and that recipients of free tickets were being denied entrance when the club finally began to fill up. And as if these problems were not enough, it was realized in late
