Sir Richard Branson: Sky's the limit
From The Exorcist to 400 companies: how music sent Virgin entrepreneur Richard Branson into space. He's an island owning adventurer, but he's incredibly shy. He's the record label owner who doesn't even like music. Journalist Zing Tsjeng and BBC business editor Simon Jack try to understand a man of many paradoxes and ask whether he's good, bad, or just another billionaire.
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Welcome to Good, Bad, Billionaire.
Each episode, we pick a billionaire and we find out how they made their money.
Then we judge them.
Are they good, bad, or just another billionaire?
I'm Singh Singh and I'm a journalist, author and podcaster.
And I'm Simon Jack and I'm the BBC's business editor.
And this episode is about the world's most successful virgin.
It's Virgin Group founder, Sir Richard Branson.
I would say he's probably Britain's best-known billionaire.
And weirdly, and I didn't know this, he's the second most followed person on LinkedIn after Bill Gates.
And Bill Gates is significantly richer, but I feel like Branson has a better PR machine around him.
I think he's got one of the best PR machines I've ever seen in business and he is the brand.
He personifies it and he sprinkles that magic dust of the virgin name on just about any business you can think of.
He's had a go at it.
So he's currently worth over £2 billion and his wealth comes from his businesses under the Virgin name.
Right now there are 40 Virgin companies but he reportedly has set up 400 companies so he's done record labels, airlines, cola, gyms, the internet.
And he also was the first in a billionaire race in a very important way to billionaires.
He was the first one to space aboard his own Virgin Galactic rocket.
He beat Jeff Bezos into space by nine days.
But this isn't the first time he's tried some daring stunt.
So he became known for his world record attempts.
He set the record for the first transatlantic crossing in a hot air balloon.
That went at about 130 miles per hour.
Those daredevil stunts might be a personality thing, might be the most genius bit of marketing you've ever seen.
Let's listen to a clip of him sharing his desert island discs in 1989.
BBC presenter Sue Lawley has just asked him why he does these daredevil stunts.
I mean, there are tremendous personal challenges, both with the balloon project, for instance, that you know, overcoming a technological problem where people said it was impossible for a hot air balloon to go that far, and then the actual personal challenge having never flown a hot air balloon, to learn to fly it, to learn to skydive, to see whether one was capable of setting oneself that kind of task.
And I'm in that fantastic position of being able to, say, ride in the jet stream at 150 miles an hour in a balloon, which no one's ever done before.
He's quite a smooth operator, isn't he?
Yeah, there's another reason he does these stunts because basically he knows the press loves these things and will document his antics.
You can't buy that kind of publicity for the Virgin brand.
And he famously owns his own island, Necker Island.
It's in the British Virgin Islands.
He bought it when he was just 28 years old.
I feel like a real failure that I don't have my own island.
I mean, I think I set up my first ISO when I was 28 years old.
Well, Necker became a big celebrity hotspot.
You've had Princess Diana went there.
Barack Obama, Kate Moss, after her cocaine scandal, went to recuperate or lay low there.
I don't know how much lying low there is on Necker Island.
It sounds a bit like a party central.
You can go there yourself if you like, apparently.
For a mere £85,000 a night, you can party like Branson.
Have you ever met Branson?
A couple of times, actually, yeah.
Funnily enough, I flew to New York on Virgin.
He was part of an environmental lobby, which was talking about trying to reduce emissions, which is you've got a bit of a nerve if you run an airline trying to do that.
But he wanted to be in the front of that particular groovy initiative at the time.
What did you make of him?
What was he like?
I find it really interesting because he is rich and playboyish and he's got his own island, got his own airline.
And you'd think of him as being this uber confident, slick and confident in his personal presentation.
He's actually painfully shy
and he's quite faltering in interviews.
So he's a real bunch of paradoxes, which is what I think we'll see in this.
I mean, for example, he owned a famous record label.
He doesn't even like music.
But let's get into that.
Let's go back to the beginning and find out where Richard Branson comes from.
So Richard Charles Nicholas Branson was born in Blackheath in London in 1950, the eldest of three children and he had two younger sisters.
Yeah, his parents, Edward and Eve, came from a line of barristers, judges, British officials posted in India, solidly upper middle class.
Oh, yes, and you know, you can tell he's got quite a posh accent.
And his mum was desperate to want him to do better than other people.
And she often told people that Ricky was going to be prime minister one day.
I'd never heard of him referred to as Ricky.
That's really interesting.
As I was saying, there was a shyness to him.
He was apparently a shy child, but he learned to cover this when he was young.
His mum said shyness is a form of selfishness.
Posh.
That's quite the take as well.
I mean, it sounds like he had quite a pushy childhood.
She apparently used to make him perform skits in front of family friends to quote-unquote stamp the shyness out limey she also felt independence and toughness were key apparently when he was four years old she pushed him out of the car and said find your own way home ricky I mean
quite the tiger mum yeah and when he was five he received a letter from her explaining that she was building a business selling houses in Morocco that he would one day be the chairman of so there's entrepreneurial streak here and he often described his mother as his biggest inspiration and when she died he wrote her a letter which read you always pushed us to our limits you let me jump into a river to sink or swim before the world existed you were always an entrepreneur you showed me how to grow a company how to treat people how to be creative how to balance work and play how to live quite a tribute yeah and branson was sent to the elite boarding school stole he struggled academically because he was dyslexic yeah he did though manage to win an award for an English essay and when he was presented the award by journalist Gavin Young, he was listening to the journalist's tale of his his glamorous life.
Blimey Things Must Have Changed.
So he started a magazine called Student.
And he decided to take a punt on it.
So he dropped out at 15 to run the magazine.
And on his last day, his headmaster told him he'd either go to prison or become a millionaire.
And you all know how that turned out.
Yeah, he had some support.
His parents rented him a four-story house near Hyde Park from a family friend.
Nice parents.
I mean, you know, this is not a boyhood.
I hope my children are not listening to this.
Would your children, like Richard Branson, be able to use their charm to get interviews with Mick Jagger and John Lennon and James Baldwin and Hockney?
John Paul Sartre, even.
That's a wild one.
Pretty intellectual for a student magazine.
Well, clearly connected.
But even while he was at the magazine, he decided to start seven other related businesses, all kind of student-themed.
agencies with student artists, a student advisory line.
Yeah, and all of this meant he sort of became a kind of go-to spokesperson for political youth, despite, I don't, I've never detected that he's that interested in politics himself.
The magazine had cash flow problems, so he starts looking elsewhere.
He began a pattern of setting up new businesses.
One of his new schemes was a mail-order record business that he called Virgin Records because they were virgins in business.
And one of Virgin Records' sort of early tricks, if you like, turns out to be a scam or fraud potentially.
So one day, Richard was trying to drive a large shipment of records to Europe but the ferry was cancelled after he reached Dover.
At that time in the UK music retailers had to pay a 33% tax on records sold in the UK but not on those they sold overseas.
And then he realized he could stop at customs in Dover, get the export paperwork stamp, then bring it back to sell it home.
And so he could pocket the tax savings.
So Branson and his friends began driving to Dover with cheap records just to get the stamp and return home selling them here.
Now, is this legal?
Definitely not.
Well, suffice to say, this scam did not last because a customs officer noticed that they claimed to export 30,000 records in one Land Rover and became suspicious, as you would, because that is a lot of records to put in one London.
Also, records are heavy.
Have you ever tried to move a bunch of records?
They really are actually heavy.
30,000 records must weigh a ton.
But after a three-month investigation, they were raided.
They were arrested in 1971.
His mum went to negotiate with the police and agreed to put up her house as collateral for the debt if it was kept out of the papers.
Quite the exchange.
So this fine was £50,000,
but it was agreed that Branson would pay £15,000 immediately and the rest in monthly repayments of £3,000.
And he has an interesting comment at the time, which I think gives you an insight into him a little bit.
He said, no one was hurt.
Customs is only an organisation.
If organisations get robbed, it's not a problem because they've got lots of money, too much money, which should be handed around.
I wonder if people who work at Virgin feel the same way.
Well, we'll see that at some point they do feel that, but it's it smacks of kind of his anti-establishment approach to it, and that's one of the other paradoxes.
He's a billionaire with lots of companies, and yet he sees the man, if you like, as being the enemy.
And he obviously thought this was a victimless crime.
He's anti-establishment, which is understandable given his age and the fact he's setting up a business, but he still keeps that anti-establishment identity going, despite the fact he becomes fabulously wealthy.
Yeah, you could also see this.
I remember when we were were doing Bill Gates as our billionaire, he got pulled over by the cops and there was something slightly privileged about the way he had his shades on in his mug shot and he was basically like slightly cocky.
It was smacked of a privileged rich kid and that's what it feels like here as well.
Someone who could essentially buy their way out of trouble, which is exactly what he did.
So 1971 is where we're at.
The mail order business started struggling when there was a postal workers strike.
So it opened a record shop on London's Oxford Street.
He described it more like a club than a record shop.
So this is the heart of London's shopping.
And even though it was a record shop, he actually says that he didn't have very much interest in music.
But luckily, he had a connection who did.
So his cousin, Simon Draper, stocked the shop with avant-garde records.
The cash was flowing, you know.
You can really imagine this in the 70s, right?
I have a real problem with this.
Virgin Records was the foundation of his future fortune.
And a guy running something like that who doesn't even like music, there's a lack of authenticity there, which I find deeply troubling.
It sort of makes you wonder why music to begin with.
Surely there's easier ways of making money.
Maybe it's just he liked the people he could hang out with, you know, that crowd was appealing to him.
Anyway, so that went pretty well.
They opened more virgin record stores, but remember he's still got his monthly tax bill to pay, so he needed even more money.
So on the advice of a rock guitarist called Tom Newman, who came into the Virgin shop, Richard Branson buys this rundown manor in Oxfordshire with plans to build a recording studio.
And to kit it out would cost £30,000.
He convinces aunt to loan him £7,500 as a deposit.
And a bank called Coots provided the mortgage because Branson's family already banked with them.
And I think Coots is the bank for the rich, for the landed gentry, for the aristocrats, the people with high net worth.
It's been around for over 300 years.
If you go to Eton College, the top private school in the UK, every pupil there gets marched down the high street in Eton to open a Coots account because they will be the rich and famous and aristocrats of the future.
If you ever go on a night out with someone and see a Coots bank card in their wallet, they're buying the drinks.
Yeah, definitely.
Make them buy the drinks.
So Coots were stamping up the mortgage for this recording studio and he also bet £500 from a Virgin Record Shop's takings and made 200 quid.
He's wheeler dealering, but at a very, very high level.
Yeah, the studio opened in 1972 and then a young musician walks into his life who's going to change his world.
Okay, this bit of the story blew my mind because at first I was like who's this Mike Oldfield character?
What is this 19 year old walking into the studio to use it for free for a night?
And then as I kept doing the research I was like tubular bells, what an awful name for an album.
I bet this sounds terrible.
But then it turns out that this was the album that launched Virgin Records thanks to a little known movie called The Exorcist.
That's right.
William Friedkin needed a soundtrack for his very famous, infamous film from the early 70s.
And he heard the Mike Oldfield album and loved it and wanted to use it.
And it was already doing okay.
We should play a bit of it.
Can we play a bit of it?
Can you imitate it?
It was this repetitive, kind of like minimalist sort of sound, which built up and built up.
Very atmospheric, very effective in the Exorcist film, and was possibly, I think, at the time, and still might be one of the best-selling albums of all time in the UK, for sure.
So, Mike Oldfield laid it down when he was 19.
He signed to a 10-year contract.
Branson was his agent and manager, so Branson took 10%.
And Atlantic Records bought the US rights to tubular bells of £750,000.
But once the Exorcist was released, it became a sensation.
And when it finally made number one in 1973, Richard Branson became a millionaire.
He's a millionaire.
He later said, I never thought that the words tubular bells was going to play such an important part in our lives.
Virgin going into space most likely wouldn't have existed without it.
Also, just to emphasize the fact that at this point, Richard Branson was 23 years old and he's already a millionaire.
So, how do we get from a million to a billion?
Before we go down that road, it's worth noting that while he was clearly making money, he often cried poverty to his own staff.
And by crying, we mean quite literally.
Literally crying.
So, in 1971, his staff were being paid £12 a week, but a staff member had seen a cash book which showed £15,000 paid in to his personal account.
And when his staff wanted to form a union to ask for a wage increase after the huge huge success of Tubula Bells, Branson burst into tears and said, Why are you so interested in money?
Virgin Records has no money.
Well, that's an interesting take on a company that just produced their first number one album.
Yeah, he turned on the waterworks quite frequently.
One of our producers' mums was actually the PR woman for Virgin back then, and she remembers the crying.
I don't know whether we're allowed to say this, but we have on impeccable authority.
She also snogged him.
I think we'll just leave it there.
A lot of snogging going on in the 70s.
But after becoming a millionaire, on the advice of his father, he sets up his first offshore trust on the Channel Islands.
So the royalties from Tubala Bells and the newly trademarked Virgin logo were deposited there.
And of course, that is for tax reasons.
It means that all that money comes in and you're not paying UK tax on it.
Some people find that despicable.
It is not unusual in business.
Moving from a million to a billion, the Tubala Bells money meant he now has an engine for growth and he uses that engine to expand into all sorts of things.
Virgin is a very powerful brand thanks to the records.
And he tries to sprinkle that magic virgin branding onto all sorts of things.
Virgin rags, clothing, virgin pubs, a health food shop, a hi-fi sales business, sandwich delivery, a Notting Hill restaurant, gay nightclub heaven.
And he later said, with the many companies we start, we don't even do the figures in it, farms.
We just feel there's room in the market as a need for something and we'll just get it going.
We try to make the figures work after the event.
I'm not sure this is a very sensible business strategy.
Yeah, well, I think it's basically this is just
throwing stuff at the wall and seeing what sticks.
Virgin brand's powerful.
Some of it will work, some of it won't.
But you're not immune, however powerful your brand is, to external economic forces.
And by the mid-1970s, Britain was in a pretty deep recession, which impacted consumer spending.
And Virgin had a cash flow problem.
So once again, Virgin Records came to the rescue.
The Sex Pistos, a little known band you might have heard of, they released Never Mind the Bollocks on Virgin Records in 1977.
And amazingly, I didn't know this, Branson actually decided the track list.
So he included all the big hits on the one record, despite the objections of the band manager, the famous Malcolm McLaren, and most of his other executives at Virgin.
And because there was such an uproar over the album, over the band, they became notorious.
It was actually banned by several retailers.
It paid off.
It went all the way to number one.
Yeah, I'm going to also mention a minor irritant in my life.
My wife used to go out with the drummer from the Sex Pistols.
Well, I could not name the drummer of the Sex Pistols if you paid me 50 quid.
So who's laughing now?
Yeah,
his name's Paul Cook and he's still alive.
And I've never met him.
If he's listening, no hard feelings.
Anyway, so the Sex Pistols to the rescue.
And in 1978, he had enough money to buy Necker Island, his own private island, for £145,000.
Sounds like a bargain.
I also want to point out that I don't actually think this story could happen now.
Like, it's very hard to think of someone becoming a millionaire and being able to buy their own private island off the back of a number one album.
No, I think that's right.
But meanwhile, on the personal front, he was building a family.
He'd previously been married to Kristen Tomasi in 1972.
They divorced in 1979.
So he started dating Joan Templeman.
They had their first daughter, Claire Sarah, in 1979, but she died a few days later, tragically.
And Joan was an interesting person, an interesting match.
So she was a working-class girl from Glasgow.
And I think what this relationship had the benefit of doing was it kept him grounded.
She was his sounding board.
He actually said, I owe a lot to Joan.
Joan has always been a steady source of wisdom and has played no small part in some of my better life decisions.
And they later had a second daughter, Holly, in 1981 and a son, Sam, in 1985.
They got married on Necker Island, where else in 1989 and are still together.
So he's got a lovely family, he's got number one records under his belt.
What would a millionaire do now?
He starts looking to the sky.
Literally looking towards the sky.
He decides he wants to go into the airline business in the 1980s because an interesting bit of deregulation happened.
In 1978, Jimmy Carter, the then president, had deregulated the airline business, allowing new entrants to come in from things which were completely dominated by the flag carrier, the American Airlines, the British Airways of the world.
So basically, you too could set up your own airline.
And obviously Richard Branson spotted a classic opportunity to sprinkle the virgin magic onto air travel.
Yeah, there are two stories of the origins of Virgin Atlantic.
The one told by Branson often is that when his American Airlines flight was cancelled from Puerto Rico to Necar Island, he used his credit card to charter a private plane and then held up a sign saying $39 for a flight to the Virgin Islands and filled up the plane with other passengers.
When they arrived, a passenger told him, sharpen up your service and you could be in the airline business.
A very convenient origin story, I would say.
Well, the other story is that an American lawyer came up with an idea.
His name was Randolph Fields.
He pitched the idea of an all-business class airline flying between the UK and the USA, and Branson agreed to spend £3 million on starting that.
So, whatever the origins, whatever the true story is, in 1984, the first Virgin Atlantic flight flew from Gatwick to Newark Airport in New York.
I remember this really clearly.
I remember the shots of of it.
They had Yuri Geller on board, Madonna's Like a Virgin was playing.
Richard Branson himself was going around pouring champagne.
It was incredibly effective PR stunt.
Right, so kind of glamorous and chic and you know, and just fun.
Yeah, fun.
I think that was the thing.
It's like, you know, this is a fun experience.
But all masking the fact this was a pretty threadbare operation.
When they launched, they had only one plane, an old Boeing 747, that was on loan.
So, really, another example of kind of style over substance, you might say.
Yeah, but he did have a mentor in the airline business, which people of a certain age will remember this name very well.
I do.
His name is Freddie Laker.
He was the first person to try and break the mold of transatlantic flying with Laker Airways in the 1970s.
But Laker Airlines had gone bust in 1982.
But he had this key bit of advice to Richard Branson, which has probably molded the Richard Branson that we know today.
So, Freddie kind of mentored Branson and told him, you've got to be the story.
And, you know, Branson had done publicity stunts before, you know, he'd put sex pistols on a boat on the Thames during the Queen's Silver Jubilee.
But prior to this piece of advice, he hadn't really included himself as part of the brand, but he started putting himself front and center of every single virgin campaign.
And this is when the first of his sort of big kind of capers, the daredevil stuff, starts, because he was a passenger on a speedboat that was attempted to make the fastest ever Atlantic crossing from New York to the UK.
And I say on a speedboat, it was festooned in virgin branding, of course.
So unfortunately, they did not make it.
It actually crashed right before it completed near the Isles of Scilly.
But he turned it into a great story because his son Sam was born during the four-day journey when a photographer was sent to snap them in the hospital.
It was reported as daredevil father toasts newborn.
Yeah.
He also joined the balloonist Pearl Lindstrand in in the Virgin Atlantic Flyer.
They set the record for the first ever hot air balloon to successfully, this time, they didn't crash, cross the Atlantic.
He crossed the Pacific later too.
During the 90s, he made four attempts to circumnavigate the world in a balloon before he finally gave up in 99.
He had this kind of, I always think of it as Phineas Fogg kind of thing, you know, Around the World in 80 Days, this is mad cap sort of adventurer, and we could, we lovingly follow his antics, and there's always someone there to snap a picture.
And that kind of PR was quite new at the time, and it's cheaper than doing advertising.
And you're associating it with a kind of adventurousness, youthful spirit, pitching yourself against the odds.
It's a powerful message.
Do we think that part of this was also because he liked being the center of attention?
I don't know.
It's really difficult to figure that one out because, as I say, when you meet him in person, he's actually quite shy and retiring.
And yet he does all these kind of crazy things.
It's one of the many paradoxes about him, you know, partly because he's clearly a very ambitious person, but also I think you know there's a bit of wizard of oz there's a shy person behind it yeah if you pull back the curtain you'll find branson in a hot air balloon yes
anyway so he was winning on the branding front but he was still very much an underdog in the airline business so by the end of the 80s virgin atlantic still had only a handful of planes four of them and it was struggling to compete with its main rival british airways he hired a new pr head and he told them you've got to fight for virgin and you've got to knock british Airways.
So this launched a kind of war against BA.
So one advert said BA is for short, thin people to poke fun at the fact that their seat sizes weren't big enough.
And at that point, Virgin were a bit of an irritant to BA, no more than that.
But that changed and the tension between them stepped up again in 1990 when Virgin was given approval to fly from Heathrow Airport, BA's real sort of spiritual home.
And then there was another stunt where Branson wrote to Saddam Hussein offering a Virgin plane to pick up Brits who were stranded by the Gulf War.
And the BA chairman at the time was a guy called Lord King, and there was a real feud between these two individuals.
King was shocked that Branson had bypassed the usual channels and was said to have instructed his staff, do something about Branson.
So it's getting quite personal, this feud.
And it actually became a matter of espionage because Branson received a tip-off that BA was hacking into Virgin's computers, poaching its passengers, and leaking stories about their finances to the press.
So Virgin started to collect evidence of BA's wrongdoing.
And Branson started using the press who would begin running articles about BA's what became known as Dirty Tricks campaign and ITV aired a documentary which was called Violating Virgin.
So when BA's Lord King claimed Branson's accusations of dirty tricks were baseless, Virgin decided then to take the dramatic step of suing them for libel.
So to take on BA in court, Branson needed some money.
So he announced to his staff they had sold Virgin Records to EMI for £510 million, an enormous amount of money in the early 90s, 510 million.
And
that's a big move.
That's kind of the heart and soul of the Virgin family, really.
Yeah, that's staking the house on everything.
Yeah, he again, apparently he cried to staff about this.
And I think those tears were probably kind of genuine.
I don't think he would have wanted to get rid of.
And it strikes me as a strange decision to sell Virgin Records to go and take off in the highly competitive airline industry.
That is a very bold move.
And I wonder whether he would have done it.
I suppose, look, we're talking about him as a billionaire.
So something worked out.
So he sold Virgin Records, but this injection of money basically saved Virgin Atlantic from going under.
And finally, in 1993, Virgin won one of the most bitter and protracted libel actions in aviation history.
Yeah, a BA admitted in the High Court that staff had engaged in disreputable business practices.
They apologised.
They paid Branson £500,000 personally.
That was divided among his staff and became known as the BA bonus.
And BA also had to foot the £3 million legal bill, and his rival, Lord King, had to resign.
So it is Virgin 1, BA 0.
I think that made him kind of the maverick superstar in many ways that we think of today.
Oh, definitely.
And I think it kind of solidified this reputation that he's kind of cultivated of being the little guy, the underdog, the outsider taking on the big establishment.
You know, you can see kind of seeds of that being planted in his early years.
But I think that fight against an aviation giant like British Airways was the thing that solidified it.
Yeah, but even his own head of ANR, this is artist and repertoire of Virgin Records, said that people were naive who had allowed themselves to be seduced by the informality, the no-suits.
It was always about the money.
Even his own mother described him as someone who plucks what he needs out of you.
It's interesting what the head of ANR said about that because in many ways it kind of mirrors what happens with tech companies, right?
Everyone's in hoodies, it's super informal, and you're never never going to get sat down with a guy in a suit to do your appraisal, but it is still always about the money.
But if it works for the branding, it works for the branding, and it really did for Virgin because by the mid-90s, the brand had this reputation as being honest, quality, fun, stylish.
I'm told that Virgin Group at this point was now the largest private company in the UK.
It had 6,000 staff and subsidiaries in 15 countries.
I personally find that difficult to believe.
And there were so many businesses there.
It's actually quite hard to narrow them down.
But we can discuss one in particular, Virgin Cola.
Which is interesting.
I mean, taking on behemoths of an industry, you can't take on anyone perhaps more dominant than Coca-Cola in that industry.
And it launched Virgin Cola in 1994.
And this is a classic example of like, let's throw this off at the wall and see what sticks.
Of course, Richard Branson had a stunt for the launch of this.
He drove a Sherman tank through three tons of cans of Coke in Times Square, and he launched a bottle in the shape of Pamela Anderson.
Classy.
Virgin Cola did not do well.
It was a flop.
Yeah, by 2000, it had debts of over 30 million, and it's one of the businesses that didn't work.
Other failures also included virgin vodka, virgin brides, virgin clothing, virgin V, which was a cosmetics line, virgin cars.
So they really were trying to do quite a lot.
So we've lost sight of our goal here.
We're trying to figure out when he became a billionaire.
And it's quite tricky to pin down his wealth.
It's a private company, so it's not listed on the stock exchange.
There's also loads of companies across the group.
Some are being shut down, others are being started.
He's selling some off.
97 for example he sold Virgin Radio to Chris Evans, the presenter, for 81 million pounds.
But we can say that in 1997, the Sunday Times rich list estimated his wealth to be £1.7 billion,
which ranked him at number five alongside the Duke of Westminster.
And his biggest asset was still his airline, Virgin Atlantic.
That accounted for half his wealth on paper.
So Richard Branson is a billionaire.
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Suffs, the new musical has made Tony award-winning history on Broadway.
We demand to be home.
Winner, best score.
We demand to be seen.
Winner, best book.
We demand to be quality.
It's a theatrical masterpiece that's thrilling, inspiring, dazzlingly entertaining, and unquestionably the most emotionally stirring musical this season.
Suffs playing the Orpheum Theater October 22nd through November 9th.
Tickets at BroadwaySF.com
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Let's take a journey back to 2003.
Canadian teen sensation Avrilavine was topping the charts and turning the music industry upside down.
But what if I told you that the Avril Levine we know and love might not be the same Avril?
What?
Did Avril die?
Was she replaced by a doppelganger?
I'm Joanne McNally and I'm doing a deep dive into a notorious internet conspiracy.
Who replaced Avril Levine?
Listen on BBC Sounds.
So, he's officially a billionaire.
Now what?
Cast your mind back.
This was back in 1997 and a little thing known as cool britannia was starting to steamrow ahead thanks to the election of the new labour government in 1997 the uk was rocking at this point you had blair versus oasis oasis are hanging out in 10 downing street right and branson was very much the poster boy for what's that famous line where it's like cool to be stinking rich he said that though peter mandelson the new labour so they'd ditch their kind of heavily unionized labor roots peter mandelson famously said, We're very comfortable with you becoming filthy rich as long as you pay your taxes.
I was living in the US, but I was coming back a lot and I just couldn't believe there was a real sense of, I don't know, fun and enthusiasm, opportunism in the air.
And also, the music was rocking at the time.
It was a very cool scene, man.
Right.
And I guess Branson with the kind of glamorous, youthful, sexy, virgin brand fit right in.
And it was just after this time he actually got knighted.
He got his knighthood for services to entrepreneurship, becoming Sir Richard Branson.
And he also took advantage of privatised British Rail in the 90s.
So that meant an opening for Virgin Rail.
Yeah, which he took.
He got an initial 15-year franchise of the cross-country and the West Coast mainline routes.
And it actually made a profit.
By 2012, the end date of that franchise, Virgin Group had received £180 million in dividends.
And by the end in 2019, that turned out to be £306 million in total.
So the Virgin Group has done well out of the rail industry.
But in 2019, they actually lost this franchise because it disqualified itself over pension liabilities.
I think you have to explain what this means.
They're not putting enough money into the staff pension pot, and the pensions regulator said that the UK rail industry needs an additional five to six billion pounds to plug the pension shortfall.
Virgin said it was being asked to take on risks it couldn't control and manage.
So, at that point, they lost that franchise.
So, originally, they agreed to pay £3.3 billion to the government to plug that shot for, but by the time they lost the franchise in 2019, they'd only paid £970 million.
And a Labour former politician, Lord Adonis, said he was forced to resign partly in protest as what he saw as a taxpayer-funded bailout of Virgin.
They didn't pay as much as they owed.
That was a quasi-bailout, in his view.
And that meant the taxpayer was left footing the bill.
And Branson also pops up in another great British privatisation story with Northern Rock Bank.
Yeah, this one I remember extremely well.
In 2007, he tries to buy a bank called Northern Rock, but he was stopped because Vince Cable, a politician at that time, said his criminal conviction for tax evasion back in 1971 over those records stood in the way of trusting him with public money.
And in a way, he dodged a massive bullet by not buying it then, because in 2008, it got into terrible financial difficulty because of the sub prime mortgage crisis, the great financial crisis.
Am I right in saying that, you know, Northern Rock was basically one of of the four horsemen of the apocalypse to signal the fact that recession was coming?
Well, it was definitely the most visible thing in the UK, at least, of the financial crisis.
There were pictures on the front page of every newspaper of queues of people around the block trying to get their money out of a bank because basically Northern Rock was taking enormous risks on how much money it was lending.
It was lending people 125% of the value of their home.
So when the financial crisis hit, they couldn't fund themselves and they collapsed.
And in 2008, they were nationalized.
The taxpayer was left footing the bell.
So £1.4 billion of taxpayer money was put into Northern Rock to save it.
And it was hoped that a sale of the bank would eventually earn that back for, you know, regular Joes.
So it was nationalised.
Listen, the government was pumping money into all sorts of banks.
It pumped tens of billions into RBS, which is now known as NatWest, tens of billions into Lloyd's, which then merged with H-Boss.
It was carnage, financial carnage.
Out of the wreckage of this, in 2011, the government did sell the nationalised Northern Rock to Richard Branson for £747 million, and it became and is still virgin money.
And would you say that this is kind of a discount fire sale price?
It seems pretty cheap for a bank.
Yeah, no, it definitely would have cost more back in 2007.
Even by 2011, the valuation of banks is still very depressed.
In fact, it's still depressed to this day.
Where are we now?
We're 15 years on.
And, for example, the the share price of NatWest, which used to be known as RBS, is still less than half what it was in 2008 when the government bought 80-odd percent of the bank.
So yes, this is definitely, he's definitely buying financial assets at a fraction of what they would have cost before 2007.
Listen, critics complained that the government had lost hundreds of millions by pushing for a quick sale, denying customers, for example, a stake in the business.
But it worked out for Branson.
Within two years, Virgin Money reported £150 million in profit.
And in 2018, Virgin Money was sold to CYBG for £1.7 billion.
So it was sold to CYBG Clydesdale Bank for £1.7 billion, but Branson retained 13% of the company.
Plus, Clydesdale are paying royalties to Branson for the Virgin Money brand, equivalent to 1% of revenues.
That brand still got value.
So even though he sold it, he's still making money from it.
Yeah.
So at this point, Branson's still a billionaire.
He's not lost his money yet.
He's conquered trains and planes.
Sadly, Virgin Cars did not work.
So what's next?
Like any self-respecting billionaire, space.
He officially launched Virgin Galactic in 2004.
In 2013, Virgin Galactic spaceship, the VSS Enterprise, made its first powered flight.
But in 2014, disaster struck.
Enterprise was destroyed in an accident during a test flight that actually killed the pilot Michaelsbury.
But even after this tragic incident, Branson vowed to carry on.
He was determined.
In 2021, Virgin Galactic completed its first fully crewed space flight.
Obviously, Branson had to be on board.
And it beat another one of our billionaires, Jeff Bezos, into space by a mere nine days.
So he wins the space race by a few days.
In 2023, Virgin Galactic did indeed fly customers to the edge of space.
I don't know, the edge of space.
I want to be in space.
Is the edge of space good enough?
Where have you just been?
I've been to the edge of space.
I'm not into space.
Yeah, you want to be.
I want my money back.
You want the full kind of zero gravity experience, don't you?
you?
I think you do get that, to be fair.
I think that does happen.
But Branson claimed there are 800 customers ready, already booked, paying a quarter of a million dollars for a ticket, including Brad Pitt, Tom Hanks, and Lady Gaga.
Honestly, I can think of better ways to spend my money, but you know,
go you, Lady Gaga.
I think I would like to go to space if I had the money.
You know, don't you want to go and be able to see and look back at our beautiful Earth?
No.
Not at the rate we're destroying it.
Okay.
But by the end of 2023, Richard Branson helped send Virgin Galactic shares down 16% after he announced he wasn't going to put any more money in.
Like I say, it's a big cash burn going into space.
He also said that Virgin Group hasn't been in the best financial shape because of the pandemic.
He says he actually lost about £1.5 billion during COVID.
Mainly because of the devastating effect COVID had on airlines.
They had 50, 60 planes on the ground.
Remember his health clubs, the Virgin Active Health Clubs, they were all closed.
He's got hotels, they were closed.
At this time, he asked for a £500 million bailout from the government, who refused.
This is on the Virgin Atlantic, the airline side.
And the bailout appeal did not go down well.
So Angela Rayner, who's deputy leader of the Labour Party, tweeted, Richard, flog your private island and pay your staff.
We are in unprecedented times here.
Angela Rayner, as always, knowing her way around a quote.
So the private sector came to the rescue.
A private deal to rescue Virgin Atlantic eventually saw the Virgin Group put in £200 million
and investors and creditors also giving it an additional £1 billion in order to rescue the airline.
Yeah, and which is still in the air today.
He actually lost big again last year.
I don't know if you remember that satellite launch from a spaceport in Cornwall.
That was run by Virgin Orbit.
This was going to be the new space industry.
It ended up in disaster.
The rocket carrying them sort of exploded.
Nine satellites were destroyed and Virgin Orbit went bankrupt.
But despite this, people still seem to actually really like Branson as a person.
Yeah, YouGov poll placed him at number two in the UK and number five in the US in their most popular business figures, so bigger the US as well.
And there was a 2022 documentary about Branson in which former observer business editor Emily Bell said, I'm constantly impressed by the latitude that the British public will give Richard Branson.
They constantly want him to succeed in a way that they don't want most businessmen to succeed.
That is odd, isn't it?
And I think it should be our mission here to try and figure out why that is.
I feel like there's a bit of Boris Johnson pre-disgrace, pre-being kicked out of the Tory Party.
Really?
Yeah, because if you think about it, this kind of cheeky, happy-go-lucky chappy, bit of a rogue, you know, clearly loves a bit of fun, like they're quite similar qualities, I think.
And I think the British public really responds to someone who doesn't appear to take themselves seriously.
That's true.
There's a little bit of the kind of businessman Jack Sparrow about him.
He's got a little bit of a glint in his eye.
He's taken down some of the Goliath of the business like BA.
Michael O'Leary, the front man for Ryanair, has a similar kind of thing.
He's kind of sticking it to the big guys.
There's something kind of fun about him.
He's slightly irreverent.
And also, I just think also the Virgin brand is still steeped in the music business.
And I think that still has some charm and some appeal.
Yeah, it's a story about branding, isn't it?
I mean, really, when you think about big brands like Coca-Cola, like Apple, what Virgin was able to accomplish because it was kind of of tagging along to the 70s and the cool Britannia and, you know, boom in pop culture and music then.
That is basically Virgin.
Yeah.
So he's a billionaire.
Let's come to the bit where we judge him.
On sheer wealth, he's not anywhere near the top of the tree.
£2.4 billion currently.
That's down £4.2 billion from the year before, thanks to that Virgin Orbit bankruptcy.
But in this category, we also talk about how you wear your wealth.
And this he does extremely well.
Oh, yeah.
I mean, Necker Island alone, buying a private island in your 20s.
Yeah.
And also, you know, don't forget, the first billionaire to go into space, that's quite the achievement.
Yeah, he won the space race, which matters to these billionaires.
I'm going to give him a six for wealth, because he wouldn't usually justify that by the amount of money he has.
But the way he's worn it and the fact he embodies billionaire so well, I'm going to give him some extra boosts.
He gets a boost from that.
So six out of 10 for me.
I'll be more generous at the points I give him for wearing it well, so to speak.
I'm going to give him an 8 out of 10.
Okay.
Well, comes from a pretty solidly upper middle class family.
Parents rented him a four-storey house near Hyde Park when he was a kid.
He went to boarding school and was rich enough to drop out of boarding school without many consequences.
Yeah, he was hanging with a pretty cool crowd.
I think he had a pretty privileged upbringing.
I'm going to give him a two for Ragster Riches.
I'm going to give him a two as well.
He was born with a silver spoon in his mouth.
Yeah, pretty much.
Okay, villainy.
Has his business practice done damage?
Has he shafted people?
What's he been like in business?
Well, he's basically attacks Excel, right?
Even though he denies it.
I mean, he lives on Necker Island.
He's done so since 2006.
And actually, in 2016, the Shadow Chancellor of the Exchequer, John McDonnell, asked for him to lose his knighthood because he didn't, he resided in Necker Island.
Yeah, if everyone who was a tax excel lost their knighthood there'll be a lot fewer knights of the realm I can tell you that.
And also his carbon footprint's not looking great is it?
I mean if we if we criticize Taylor Swift for her carbon footprint, Richard Branson owns an airline and blasts rockets into space.
In his defense in 2007 he did start a company to make biofuels to counter the impact of his airline but you know you're still essentially propping up the airline industry.
And what about his business practices?
In this he actually scores quite well because he's seen as the one who was being shafted.
You know, the battle with BA kind of defined his business career and he was seen as the wronged party in that and came out on top.
So you can't, I don't think his business dealings are particularly villainous.
No, I mean, the crying thing is interesting.
It's not particularly villainous, but it is
smack of manipulativeness.
Yeah.
I'm going to come down.
the middle and give him a five because you know the aviation industry is literally burning carbon into the atmosphere but in terms of the actual villainous business practices he did to get to that point he doesn't score that high but for the aviation stuff I'll give him a five okay well you know if he didn't own the airline somebody else would you know what I mean you're five I'm four so philanthropy what do we know about that well he actually has signed the giving pledge so We've talked about the giving pledge on this podcast before.
It's set up to encourage billionaires to give away their wealth in their lifetime.
Yeah, set up by Bill Gates and Warren Buffett.
And in 2006, Branson pledged $3 billion of his transport profits to fight global warming.
But there are questions over how much he's actually given away.
Because in 2014, Naomi Klein claims he gave less than a tenth of the cash promised to develop low-carbon fuel.
I think that that pledge of $3 billion of transport profits to fight global warming, I mean, is that trying to absolve yourself of your own sins?
I suppose it is.
But still, it's a big chunk of money.
I'm going to give him a five for philanthropy.
I would also give him a five.
I mean, he scores quite, well, he did sign the giving pledge, which even though, you know, you don't get put in jail if you don't give away your money, it is quite the statement.
So maybe I would push him up to a six out of ten for signing that.
Power.
In the past, we've defined power as like, you know, for example, could he sway an election?
Could he...
pick up the phone to world leaders?
Is he a massive influencer?
I don't think he's any of those things, is he?
No, and actually, I think, you know, seeing Richard Branson, like growing up, seeing him on tele flogging stuff, actually made me, in a way, take him less seriously as a serious business figure.
Because the image he cultivated was one of glam, kind of sexy, cool, funny, irreverence.
You know, I think that this is a category he would want to score low in because the whole point about him is he's not powerful.
He was taking on BA as a pretender, as an interloper in that Virgin, which is more like a nightclub than a record store.
Power is not what he's trying to project, and I don't think he does, so I'm going to give him a two for power.
I would give him a three out of ten.
Yeah.
Because I think coolness, however you define it, is a sort of power.
It's just one that works in a slightly different way to being able to ring up the president.
Yeah.
Okay.
Legacy.
I think that his stature as the best-known entrepreneur that Britain has produced in the last, well, ever, probably.
He is a role model, I think, to an entire generation of people who think that they can do things a bit differently, want their own island.
Yeah, there's a kind of scrappiness that I think is inspiring to a lot of younger people who want to become millionaires or billionaires or entrepreneurs.
Yeah.
As an exemplar of entrepreneurialism, it's pretty powerful.
So I'm going to give him an eight for legacy.
And even, you know, the power of having a personal brand.
You know, nowadays, people take real pains to cultivate personal brands for themselves on social media.
Just look on TikTok.
Everyone's trying to create a personal brand.
And in a way, Richard Branson was right at the center of that.
You know, he really pioneered this idea of you can be more than just a person.
You can embody a brand.
You can embody, you know, a company's values.
You can change the way people perceive your company through just sheer personality.
Yeah, whether it's true or not, it has power.
I can imagine if you're a university student and you're studying marketing or one of those disciplines, Richard Branson is a case study for you.
For sure.
Okay.
So I would give him an 8 out of 10 for this as well.
Two eights.
Okay.
And then we have to ask, is he good, bad, or just another billionaire?
Honestly, I feel like he's just another billionaire.
Like, you know, the companies he started, I don't want to say they were just companies.
Obviously, they were very successful, but did they contribute tons and tons to, you know, did they reshape the world for the better?
Did they, you know, change the way we do things?
Yeah, Tubala Bells is probably a really good album, but I wouldn't say it really changed lives, except for maybe the life of Richard Branson and Michael Field, who made the album.
Yeah, I find myself quite perplexed by this story in a weird way.
It's like he sets up so many companies in a way because Virgin is so powerful as a brand, but a lot of those companies just do stuff, you know, they don't transform people's lives.
They don't change the way we do things.
So for that reason, I think he's just another billionaire to me.
I think as an aspirational character for many people who want to start out in business, and you know, when we talk sometimes about the unacceptable face of capitalism um people have been described as that philip green for example other people i think in many people's eyes he's the acceptable face of capitalism he's worn it well he seems to have fun billionaires aren't generally liked people but there is a certain amount of affection for him i'm really torn by this because he is a really complex character and it's difficult to get to know what's the real richard branson is but i think for what he's done for music what he's done for branding he revolutionized the airline industry.
He put out Chibla Bell's, never mind the bollocks.
These are all great moments in history.
So I'm going to call him Richard Branson.
Sir Richard Branson is a good billionaire.
And I'm going to listen to Chibla Bell's album now.
Oh yeah, you've got to.
So who do we have next episode?
The youngest self-made billionaire in history, one of the top four richest people in the world ever.
He's not even 40 yet.
You may know him from a film called The Social Network.
He has revolutionized the way we spend our time, how advertisers spend their money, and some people say arguably for the worse.
Mark Zuckerberg, next up.
Thanks for listening to Good Bad Billionaire.
This podcast is produced by Hannah Hufford and Mark Ward.
James Cook is our editor, and it's a BBC audio production.