As Virgin Records grew, for example, it divided itself into new record companies. "We've now got five record companies," Branson says. "That gives us a lot of advantages. They can concentrate on new bands instead of getting cluttered up with tons and tons of artists." This, he says, keeps the companies in closer touch with bands and the tastes of the market, and can improve each company's chances of having radio stations play its new releases. "It costs us more on switchboards and telex machines, but I definitely believe it works better."
Branson's greatest weakness as a manager, according to his generals, is his hatred of confrontation. He'll sidestep obstreperous employees, as he did with the editor of Event, a London entertainment-listings magazine Virgin started in 1981 that folded six months later. The editor stood up to Branson, says Simon Draper: "That is, he was not a yes man. There wasn't that magic. If you say no to Richard too many times, just because you're being perverse, he really goes off it." Branson skirted the first editor and, in effect, appointed a second, duplicate editor. "Of course, it caused the most appalling conflicts," says Draper. "Those two fought like mad." The magazine failed mostly because an existing entertainment magazine had suddenly changed course, filling the niche Event was supposed to fill.
"I'm not one to waste energy and time having arguments," says Branson. "Perhaps that's a fault. Maybe sometimes just to sit down and have a confrontation, to sort of clear the air, would be the better thing to do."
Branson would rather spend his time exploring new business ideas, or promoting companies he already owns. "He's a natural showman," says David Tait. "He loves to shock." Indeed, it was that most shocking affair of the Sex Pistols that really thrust Virgin Records into the major leagues. "I must confess it horrified my wife," says Edward Branson, Richard's father, a retired metropolitan magistrate, his expression becoming somewhat pained.
"It's not a part of Richard's life that I'm proud of."
First, a spot of history. As his father remembers it, Branson began his first venture when he was about 11 or 12 years old. He planted a thousand seedlings and then went back to school convinced he'd make a killing selling Christmas trees. Rabbits ate the trees. About a year later he tried again, planning this time to sell budgerigars -- small, fiercely reproductive parrots. Branson steadfastly contends that rats ate this venture. Eve Branson, his mother, says she simply let the birds go.
No one's certain where Branson got his entrepreneurial drive. British culture certainly didn't encourage it, and there were no national role models. His parents contend he may have felt some responsibility for the family's welfare. "The fact that we never had any money was a very good thing," says Eve Branson. "I think he felt deep down he wanted a way to help the family. I think he felt reponsible for his sisters." The answer, however, may lie in the fact that Branson as a boy loved sports -- and probably would have pursued a sports career if he hadn't badly injured one of his knees. Could it be he's simply projecting the same drive into business? "He likes playing the game for the sake of playing the game," says Simon Draper. "He competes hard because he enjoys competition."
At 15, Branson started a magazine called Student and did his dealing from a telephone booth at his boarding school. His parents thought he was starting a school magazine -- until he went to London to sell advertising space. "He was so enthusiastic it seemed a pity just to stop it like that," Edward Branson says. "I thought it would be rather a good thing for him to learn the difficulties, as he only had ?100 in the world. I thought he'd very quickly be forced to stop it." The first issue sold 50,000 copies.
At 17, Branson quit school to run Student full-time. Soon afterward, he started a mail-order company, selling records at discounted prices -- the first person to take advantage of a new law allowing the practice. A postal strike stopped the enterprise cold. Branson wasn't deterred. He opened a discount-record shop over a shoe store in Oxford Street. Other stores followed.
Branson picked the name Virgin because he had no experience running a business. Virgin Records quickly diversified into providing recording services for bands and, in 1973, produced and issued the first of its own original records, Tubular Bells, by Mike Oldfield. Virgin sold more than 5 million copies of the record, part of which was included in the soundtrack for The Exorcist. Virgin, however, still hadn't shaken its image as an oblique, hippie recording company.
Then the Sex Pistols came along, and punk went mainstream. Safety pins turned into jewelry. Hair turned orange. Britain's adult population wanted to see the Pistols shot. For the young, however, the group was the power and the glory. And Branson knew that he wanted the group's contract.
He called EMI, which had previously signed the group, and told its chairman that he'd be glad to take the Sex Pistols off his hands. The chairman declined.
Those were the days when four-letter words were four-letter words, and one night in December 1976, during a live TV interview, Johnny Rotten and the rest of the band used a few, egged on by their host, Bill Grundy, at the time Britain's Johnny Carson. Adult Britain was convulsed with anger. One viewer reportedly kicked his foot through his screen. "THE FILTH AND THE FURY," screamed The Daily Mail in the next morning's edition.
At seven that morning, EMI's chairman summoned Branson. EMI had decided to dump the Sex Pistos. In a bidding war, though, another recording company signed the group. But within hours of the signing ceremony, the Sex Pistols became upset and trashed the record company's offices. Available yet again, the Sex Pistols next signed with Branson. "Richard loved them from the moment they started to cause this notoriety," says Simon Draper. "He just thought it was the most wonderful thing. They were his kind of group -- it was total media wonderfulness." The Sex Pistols drew other bands to Virgin, and soon Virgin amassed a roster of talent, including Boy George and Culture Club. "There's no question that it firmly put Virgin on the map," says Draper.
