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.
TWO (#ulink_42983798-66df-5b86-b1b2-91675a4b2ae5)
One Per Cent of Tubular Bells (#ulink_42983798-66df-5b86-b1b2-91675a4b2ae5)
‘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 entire creative career of most rock musicians. And Richard Branson, the man with whom he would have to negotiate future changes to these arrangements, had become Oldfield’s manager.
Branson’s next job was to find a way of distributing Tubular Bells. Island Records, Britain’s leading independent record label at the time, offered to license it from Virgin in return for a royalty. Branson refused: remembering the advice he had received from Rob Gold, he suggested instead that Island should do no more than press and distribute (P&D) the record on Virgin’s behalf. David Betteridge, Island’s managing director, told Branson he was mad. If it accepted a straightforward licensing deal, Virgin would be able to hand Tubular Bells over to Island and forget about it, but still pocket the difference between the royalty it was paying Oldfield and the much higher royalty it received from Island. By insisting on a P&D deal, Virgin would miss out on an advance from Island, and would itself have to carry the risk of financial failure. In any case, said Betteridge, Island did not do P&D deals; the other small companies for whom it distributed records were signed up on a full licensee basis. But Branson was adamant. In the end he got what he wanted.
Tubular Bells was released in May 1973 along with the three other albums that made up the beginning of the Virgin Records list. But it was on Oldfield’s work that Virgin concentrated its attention, and where Branson’s salesmanship came into its own. Having had the nerve to telephone businessmen he had never met before to ask them for advertising for a student magazine, the young entrepreneur had no hesitation in making a nuisance of himself in the offices of radio stations and music papers and magazines, trying to get air time or publicity for his new Oldfield album.
At first, the job of selling the record seemed daunting: albums were supposed to be made up of a dozen or so three-minute songs, not of two long continuous instrumental compositions. But once the record had received the honour of being broadcast in its entirety on BBC Radio One by John Peel – a disc jockey of undisputed authority and street credibility – its future was assured. Within a matter of weeks, it was the number one selling album in the British pop charts. Within a few weeks more, Branson had flown to the United States, and sold a package of the four inaugural Virgin albums to Atlantic Records for three-quarters of a million dollars. Ahmet Ertegun, Atlantic’s chief executive, sold Oldfield’s record in turn to the makers of a new film who were looking for a soundtrack. The Exorcist, as the film was called, became a hit in America; so did Tubular Bells. It reached third place in the US charts.
That single album, and to a lesser extent the Tangerine Dream LP Phaedra released the following year, put Virgin on the map. It also unleashed a torrent of money into the company’s bank accounts. The £38,000 that Branson had to finish paying to the Customs, and the continuing dribble of losses from the shops and the mail-order business, suddenly came to seem insignificant. Virgin Records was in business as an independent label; and Simon Draper now had enough money to sign the bands that he wanted.
In July 1972, four days after his twenty-second birthday and while Virgin Records was preparing its first albums for release, Richard Branson married. His bride was Kristen Tomassi, a tall, slim blonde New Yorker who had come to the Manor a year earlier on the arm of an Australian boyfriend. Branson, struck instantly by her high-cheeked, almost Scandinavian good looks and by his discovery that her sense of fun matched his, decided instantly to make her his own. Like him, Kristen loved friends, practical jokes, convivial evenings with a bottle of wine and a joint or two, and sports. But she was still a student when she visited the Manor, and had been intending to go back to the university architecture course from which she had been taking a summer break.
Branson won her with the same impulsive daring that had already helped him to start a magazine and a mail-order business. On the day that her two-week holiday in England was over, Kristen received a telegram, A BOAT IS SINKING, it said, and asked her to ring a telephone number. Kristen rang him from a call box to thank him for the telegram, but insisted that she was going to leave all the same. When she went back to her packing, she was met by a friend of Branson’s who had come around, on his orders, to take her baggage around to the houseboat. She followed in a taxi, to find Branson and Powell deep in a business discussion. Branson opened her case, upended it on the floor, and confined talking to Nik Powell as if this were the most natural thing in the world.
After a few weeks, Kristen began to fret about her half-finished architecture course, and (though she did not tell him this) the live-in boyfriend that she had left in America.
‘You don’t need to go to architecture school,’ said Branson, with the unshakeable confidence of someone who knew that university could not have taught him anything he did not already know. ‘You can do the architectural work on the Manor.’ Before the summer was out, Kristen therefore found herself making regular visits to the Phillips auction rooms in nearby Bayswater, buying up huge pieces of cheap antique furniture for the Manor. Her best find was a second-hand billiard table, which cost £50 and required six people to manoeuvre it into position in the old house.
She soon found her own individuality being subsumed into a set of shared concerns about the business. Every aspect of Branson’s life – from his dealings with colleagues at Virgin to his negotiations with the Inland Revenue – became part of hers. Kristen also found that she got on very well with Eve Branson, Richard’s mother. Like her own mother, the head of the Branson household would tolerate no laziness or newspaper reading on Sunday mornings. Instead, guests at the Surrey farmhouse were required to swim, play croquet or feed the pigeons. When Richard and Kristen went to stay at the family house before they were married, they were invited to join his parents in their bed in the morning for sausage and eggs and strong tea.
The wedding took place at the village church of Shipton, and the party followed immediately afterwards at the Manor. It was an odd occasion; Branson’s friends and colleagues dressed up in morning dress and grey top hats, their long hair splaying oddly from the sides. Branson’s bank manager from Coutts, a guest of special importance given the cash-flow requirements of the business, was first on the receiving line. Kristen’s father paid for the party.
When they returned to London after a suitably energetic holiday on a Greek island, Kristen began to prepare for the couple to move from the houseboat on the canal to a small terraced house in Denbigh Terrace, near Portobello Road. The bank manager justified his invitation to the wedding by providing them with a mortgage that allowed Branson to offer £80,000 for the house; in keeping with the gap between their means and aspirations, Kristen then devoted herself to decorating it in style on a shoestring, making the curtains herself and imbuing the house with a sense of style and proportion befitting a former architecture student. Their one extravagance was a huge, lavish sofa in which Branson would slump as he made endless telephone calls. Meanwhile, Kristen would cook – brilliantly, her friends told her – for the dinner parties whose frequency was matched only by the short notice at which she had to prepare them. In quieter moments, the two would stroll down to Holland Park and talk about their ambitions to live one day in one of the huge stucco houses there that were now so far beyond their financial reach.
As they settled into Denbigh Terrace, Kristen became used to seeing her husband deep in conversation at all hours with Nik Powell, Simon Draper and Ken Berry, a clerk whom Branson had plucked from the accounts department to become his personal assistant. It did not take her long to realize how important his work was to the man she had married. Any doubt that there might have been was dispelled by Branson’s impulsive decision to give Mike Oldfield the Bentley that he and Kristen had received as a wedding present from Ted and Eve. The splendid car was given to Oldfield as a reward for agreeing to perform Tubular Bells at a concert at the Queen Elizabeth Hall. Kristen was given strict orders not to tell her mother-in-law, for fear of hurting her feelings – and it was in fact long, long afterwards that Eve discovered what had happened.
Kristen’s first response to Branson’s devotion to business was to try to behave like him: to throw herself into design decisions about the Manor, or to rush to and from the Virgin Rags clothes shops that were opening up inside the record stores, trying to make some order of the chaos that was the mark of Virgin’s first and last venture into clothes retailing. She also worked hard as Branson’s back-up in mollycoddling Virgin artists – spending a number of days, for instance, cheering up Mike Oldfield at an isolated country cottage, and at one point arranging to return a Mercedes roadster that the pop star had bought on the spur of the moment and then decided a week later that he did not like. But soon Kristen tired of trying to compete with her husband, and began instead a crusade to attract his attention. But he did not take the hint – not even when Kristen sent him a poem about the fact that they always seemed to meet in the hall at Denbigh Terrace, when Branson was rushing busily to his next oh-so-important meeting.
Kristen would afterwards declare that her decision to start sleeping with other people was a reaction to the fact that Richard had let his work get out of control. It was not a question of being unfaithful; even if she spent the entire night away from home, she never sought to be secretive about what she was doing. More, it was a cry for help. ‘I wanted some private life for us, that’s all I wanted,’ she remembered. ‘I just wanted half an hour a day.’ Branson, meanwhile, suggested that the couple should have children. His wife could not resist responding with sarcasm, asking him how he intended to fit in another obligation into a life which left little enough room for her as it was.
Matters came to a head when Branson asked Kristen to help him entertain a rock star whom he wanted to sign to the record label. The artist’s name was Kevin Ayers; it was he who had lent Mike Oldfield the tape machine on which he recorded his demo of Tubular Bells. He was older than Branson and Kristen, and he had all of her husband’s self-assurance without the naivety. The couple went to meet Ayers and his woman friend at the shop in Notting Hill Gate, drove the pair down the motorway to see the Manor, and then brought them back to the houseboat in the evening for dinner. Kristen cooked lobster while Richard told the jokes. Everyone drank too much; Ayers produced some cocaine, which the inexperienced Branson sniffed with him for the first time in his life – and the evening ended with Kristen in the arms of Kevin Ayers. She later claimed that Branson sought consolation from the woman that Ayers had brought with him; Branson denied that this was the case.
Although the spark of mutual attraction between his wife and Ayers was evident the following morning even to Branson, the marriage did not end immediately. Ayers pursued Kristen with flowers, presents, letters and telegrams. She went to Australia for a while to get away from everything and think, but Ayers found her there. She went to live with him briefly in France, returned to England for an attempted reconciliation with Branson – and then left again, this time for good. On the day she left, Branson was on the telephone at Denbigh Terrace, engrossed in a long negotiation to sign the Boomtown Rats to Virgin Records. The echo of his voice, raising the offer minute by minute, resounded in her ears as she slammed the door of the house for the last time. Months later, when she was living in a house in France without electricity and utterly cut off from the outside world, Kristen would imagine as she walked in the fields that she could hear the sound of the ringing telephone that had helped to destroy her life with Richard Branson. What almost broke her heart was the fact that Branson later offered to change his entire life in order to bring her back. He was willing to give up work, go and live in the country, make another life – and he told her so in letter after pleading letter. But it was too late. They divorced, citing Kevin Ayers as the co-respondent.
The irony was that Kristen’s relationship with Kevin Ayers was doomed not to last. After bearing his baby, she began to feel that he had laid siege to her mostly because it was a challenge to steal from Richard Branson his most prized possession. She was only to find happiness in marriage many years later. But as the wounds healed, Branson and his former wife were able to restore some of the old brother-sister relationship that they had had in the earliest days. Kristen and her German husband Axel Ball would be invited to spend holidays with their family on Branson’s private island. By the end of the 1980s, the two families were even in business together: Branson bought a controlling interest in a luxury hotel that they had opened in Majorca, and a new hotel was being planned in Hydra for which Kristen and her second husband would provide the architectural and managerial talent, and her first husband the money.
A matter of months after Richard Branson married Kristen Tomassi, his business partner Nik Powell married Kristen’s younger sister Merrill. A matter of months after the failure of Richard and Kristen’s marriage, the marriage of Nik and Merrill failed also.
But the twin marriages, at which Richard and Nik served as each other’s best man, said as much about the two founders of Virgin as about their wives. Nicholas Powell had been Branson’s earliest real friend; they had met at the local private school at Shamley Green at the age of four. They were, as the closest of friends can sometimes be, almost opposites. Richard was fair-haired, gregarious and rudely healthy. Nik was dark, shy and epileptic. Richard was an indifferent student; Nik was more academic. When Richard went to Stowe, whose foundation in 1923 made it a parvenu among public schools, Nik was sent north to Yorkshire to be educated in the gloomy tradition of Ampleforth College, founded by Benedictine monks before the Reformation. Richard was the leader, Nik the follower; it was not clear who needed whom more.
Powell had lived at Albion Street in the gap between school and university, and had helped out on Student. But it was only when he gave up his place at Sussex, returning to London to become Branson’s partner in the mail-order business, that the structure of their relationship was formalized in a business agreement. Powell was given 40 per cent of Virgin. As the venture grew, the two slipped into complementary roles. Powell would produce financial figures for the bank; Branson would take the figures to the meeting and persuade the bank manager to lend another few tens of thousands of pounds. Branson would decide suddenly that Virgin needed to open more record shops, and would galvanize everyone with the enthusiasm necessary to get the job done swiftly; Powell would do the stocktaking. Branson would rush off on one implausible scheme after another; Powell would provide the voice, sometimes gentle and sometimes not so gentle, telling him not to be such a damned fool. It was Branson whose gusto for life persuaded people that working for Virgin would be fun; it was Powell who stopped the biscuits in the coffee cupboard when times became hard. One did not need to know about the 60–40 split to know which was the senior partner and which the junior.
But there were other junior partners, too, who were given shares in the businesses they worked for because Powell thought that equity was the best possible incentive for hard work. One was Simon Draper, who was given a 20 per cent stake in the record company. Another was Tom Newman, who had 20 per cent of the studio business. A third was Steve Lewis, who received 20 per cent of Virgin’s management company. In common with the share split between Branson and Powell, these minority holdings were not negotiated. None of the three was asked to pay a penny for their shareholdings, nor to accept any financial risk on their own heads. Branson was prepared to take all the risks and to find all the money; the shareholdings were simply a reward, an expression of confidence in the future and a gesture of thanks for useful advice already given and work already done.
At first, this approach threw up no problems. In common with almost everybody else working for Virgin, Draper, Lewis and Newman were not much bothered by money. They were young and without responsibilities. Their salaries were perfectly adequate to cover the cost of renting a flat in London, going out for meals with friends, buying tickets to the movies, and, if they wished, smoking the occasional joint. Many of their living costs were paid by the company in any case. At the big communal dinners they all went out to, Richard would slip away and pay the bill before anyone had even noticed that he had gone. The fleet of company Volvos provided free transport for the trusted insiders. Perhaps most important of all, all three of the minority shareholders were doing what they wanted to do. Music was the passion of their lives; to be able to spend their days doing something they enjoyed, when many of their contemporaries were dressing up in drab suits and doing dull jobs in old-fashioned offices, seemed the greatest privilege of all. Who would be ungracious enough to start quibbling about equity?
Simon Draper was the first. In 1975 he went back to South Africa for a holiday and had a long chat about his work at Virgin with his older brother. He explained the way Virgin was structured. There was a holding company at the top, of which Branson owned 60 per cent and Powell 40. That company did business through a number of subsidiaries that it owned, covering records, studios, retail, mail-order and management. When someone at Virgin had been given a minority shareholding, it was always a shareholding in the subsidiary company. So Branson and Powell together owned 80 per cent of the subsidiary, and the rest belonged to the individual minority shareholder.
Draper’s brother told him that since Virgin’s shares were not quoted on any stock exchange, the value of a stake in the Virgin holding company was not clear until it was actually sold. But a minority shareholding in one of the subsidiary companies – which was what Draper himself possessed – was worse still; it was fundamentally unsafe. There was simply too much scope for Branson and Powell to change matters to their own advantage: if, for instance, they decided to dismiss Draper outright, he would be able to claim only the par value of his shares, not their real value as assets. Under company law, Draper’s 20 per cent of the record company was not a large enough stake to give him a veto over decisions that might become important later; and the presence of the holding company above it could allow profits from the record company to be used to finance other companies in the group. The advice from Older Brother was simple: Simon Draper should try to swap his stake in the record company for a stake in the holding company – and if that were not possible, he should at the very least obtain some safeguards to protect his position.
Branson and Powell would not agree to the first option. But Draper extracted from them an agreement on what he would be paid if he were ever to sell out his 20 per cent of the record company. He would still be required to offer Branson and Powell first refusal on his shares; but they would be obliged to buy him out not just at any arbitrarily agreed price, but at a ‘fair value’ or £100,000 – whichever was the less.
The matter became more complicated in the 1980s, because Draper saw the financial transactions between the record company and other group companies being arranged in such a way as to reduce the record company’s profits and liberate money for spending on the expansion of other companies in the group. Draper therefore insisted that the accounts should contain a note recording that for the purposes of valuing his shares, the record company’s profits should be considered higher.
Steve Lewis was less hard-nosed about the matter. His 20 per cent stake was in a management company, whose job was to represent musicians, extracting the best possible terms from record companies and music publishing companies, in return for a commission on the musicians’ earnings. Elsewhere in the music business, the relationship between managers and record companies was seen as inevitably hostile – for although a good manager could provide good ideas to promote a musician, and could smooth the dealings between the two sides, the unalterable fact was that it was in the manager’s interest to extract for his client as attractive terms as possible from the record company, and in the record company’s interest to resist.
At Virgin, however, Steve Lewis was expected to represent musicians who were signed to the record label and the publishing company, while simultaneously answering to an employer who owned the record company. The financial arrangements were also unusual. Most managers demand an advance for their client from the record company, and use it to pay wages to the band after extracting their own commission (usually 20 per cent). At Virgin, however, the management company that Lewis ran borrowed money from the record company, using that money to pay salaries to the musicians it represented. Matters were not helped by the fact that the management side was less successful than the record business itself. But the unusual relationship between the management company and the rest of the empire helped to make sure that the management company of which Steve Lewis owned 20 per cent never made any money. Four years after he had been given his shareholding, Lewis realized that it was not worth anything. The firm was later closed down.
Tom Newman’s 20 per cent was in the studio business, which started at the Manor but soon encompassed a mobile studio and another site in London. He had never asked for a shareholding; Richard Branson had written him a letter, unprompted, offering him a stake in the studio business as a reward for the work he had done over the previous two years. Newman, who thought of himself as a songwriter, singer and guitarist rather than as a businessman, was delighted. He had put huge efforts into installing the studio at the Manor and into helping Mike Oldfield make his bestselling album. Here, it seemed, was recognition from a grateful employer.
It was not until more than four years later, when he was sitting in a pub with another Virgin employee, that Newman heard a story that made his blood run cold. His drinking partner, who had been asked by Nik Powell to carry out one of the periodic reorganizations of the Virgin empire, reported to Newman that he had noticed that Newman’s shareholding was not in the main operating company that ran the studios, but in another company that was not trading at all.
The following day, Newman stormed into Branson’s office at South Wharf Road, and confronted him.
‘You bastard!’ he yelled. ‘The company’s worthless!’
Branson was taken aback. He began to mumble some answer, but Newman merely became more angry. After abusing his employer further, Newman walked out of the office and slammed the door. He left Virgin the same day, and resolved never to speak to Branson again. Newman’s hot temper gave Branson no chance to defend himself; more significantly, Branson claimed afterwards that Newman had never explained his grievance to him.
The irony was that Newman was quite mistaken in believing he had been betrayed over his shares. Had he toubled to check the accounts at Companies House, he would have discovered that Caroline Studios, the company of which he had owned 20 per cent, was still in operation as the trading company for the studios business. After the reason for his abrupt departure had become clear, Branson and Powell might easily have explained the situation and brought him back. But they saw Newman more as a musician than a business type; and they were beginning to realize the risks involved in giving employees subsidiary stakes in the companies.
‘My stupidity was such that instead of going straight to a lawyer, I was full of hurt pride. I thought Richard and I were partners; I was enjoying the situation,’ Newman recalled.
The gap in the management structure was filled promptly. Soon after Newman left, Branson appointed Phil Newell, who had formerly worked as the Manor’s maintenance engineer, to replace him.
Newman’s sense of outrage was compounded when he looked at the royalty statements he received from Virgin for Fine Old Tom, an album that he had made himself at the Manor. The record had taken three weeks to make, and Newman had arranged to do it at times when the studios were not needed by other artists. Yet his statement from Virgin after the record was released showed a deduction of £11,000 for the cost of studio time – a figure reflecting Simon Draper’s determination that studio time should be allocated to artists at its full price. But the album’s recording costs altogether were so high for this modest piece of work that it would inevitably take years for the royalties earned by his record to cover that deduction. ‘I’m not even sure that I came out positive in the end,’ Newman recalled.
