Virgin Records 1984-1992
It’s the 90s. Richard is 40 and Virgin Music is one the of the largest independent labels in the world. Virgin artists Paula Abdul and Steve Winwood are at the top of the US charts and the retail business has gone global with Virgin Megastores.
Richard enters a bidding war to sign Janet Jackson. He wants to show the world that Virgin is the world’s best record label by offering Janet the largest amount of money ever to be offered to a singer: $25 million. All for just one album. An unprecedented move to break all the rules, blow away the competition and dispel rumours of a cash crisis – even though behind the scenes there is indeed a cash crisis. Richard persuades an initially reluctant bank to fund the deal.
Competition between Virgin Atlantic and British Airways is rife. Bad publicity whipped up by the major UK rival to Virgin Atlantic is causing damage to Richard’s airline. The Gulf War has caused the cost of airline fuel to rise and passenger numbers are down – another recession looms.
Citibank values Virgin Music at $900 million dollars and Richard needs to save his airline. Simon Draper insists on selling the whole company to make a clean break and Thorn EMI are interested in buying. But Richard doesn’t want to sell, especially now The Rolling Stones are on the lookout for a deal to release their Voodoo Lounge album. Richard signs them for £6 million and holds on to the label.
‘I tried to forget the bankers closing in on me and brave it out as long as possible... In many ways the signing of The Rolling Stones was the culmination of everything I had ever wanted to do at Virgin Music. We had been fighting to sign them for twenty years, and now at last we had the greatest rock n roll band in the world on our label. From being a start-up label in 1973 that had relied on the genius of Mike Oldfield, we had now come of age: now we were the label of choice of many of the world’s biggest bands. Artists had seen how we had launched Phil Collins’ solo career, and how we promoted UB40 and Simple Minds, what we had been able to do with Culture Club and Peter Gabriel, and they wanted to sign with us. But, just as we reached this height, it was over.’ Richard Branson, Losing My Virginity
Virgin Atlantic is in serious danger of going bust.
‘Selling Virgin Music would save the airline and leave two strong companies. Closing down Virgin Atlantic would leave one strong company and one bust company, with 2,500 redundancies and the Virgin Group’s reputation in tatters... My overriding objective was to save Virgin Atlantic from going under, and – cruelly – the only reason I was selling Virgin Music was because it was so successful. If I sold Virgin Music, the Virgin name would be saved.’ Richard Branson, Losing My Virginity
March 6 1992 – Richard finally and reluctantly agrees to sell Virgin Music to Thorn EMI for $1 billion.
‘Although I had saved the airline, I felt that I had killed something inside me.’ Richard Branson, Losing My Virginity
But the strength of the Virgin brand ensures that Virgin Records is alive and well today and thriving as part of EMI with artists such as Katy Perry, Gorillaz, 30 Seconds To Mars, Laura Marling, Professor Green, Swedish House Mafia and David Guetta.
