Branson: Behind the Mask (4 page)

‘Richard was very disappointed that the show didn’t get a bigger number,’ admitted Jonathan Murray, recalling that Branson repeatedly telephoned to seek commiseration about the bad ratings. ‘It was hard for him for the show not to be a success.’ Mike Darnell denied responsibility for the series.

Trump chortled at the challenger’s humiliation. ‘I love to beat my opponents,’ he told reporters after the first programme. ‘I think his show is nothing to do with business. I mean, I’m not going to hire a guy based on the fact he’s going to climb on top of a hot-air balloon. Branson even failed at the balloon business. The guy has spent his whole life trying to circle the world in a balloon and then some guy comes out of nowhere and beats him to it.’ Trump could not resist telling the
New
York
Daily
News,
‘I thought the show was terrible. And I thought he was terribly miscast. He’s a lot of hot air, like his balloons.’ He even wrote to Branson, saying, ‘You have no television persona,’ and then told newspapers the same: ‘I don’t know the guy but I think he’s got zero personality and zero television persona.’ Finally, his researchers rumbled the truth about Branson’s commercial career. In a letter to the
New
York
Times,
Trump commented on their original effusive description of Branson, which had been based on information distributed by Virgin’s publicists. ‘Your article about Richard Branson failed to mention any of his numerous failures, including cola and cell phones. Also I find it hard to believe that anybody in the airline business is in fact a billionaire.’

Trump had no doubt discovered that virtually all of Branson’s flotations of his companies had flopped, at the investors’ expense. Shares in Victory Corp., a clothing and cosmetic retailer, were down 95 per cent; shares in Virgin Express, a cut-price airline based in Brussels, had fallen 93 per cent; Australian airline Virgin Blue’s shares were down 10 per cent; while the shareholders in Virgin Music, his original success, had not earned any profits, but would discover that Branson had secretly profited by reselling the shares he had bought back from them. His suspicious transaction was referred to the Department of Trade and Industry for investigation but was ruled to have happened too long ago to merit any action. Companies that had invested in Virgin’s assets had also lost money. Singapore Airlines, which bought 49 per cent of Virgin Atlantic for £630 million in 1999, had written off its entire investment; EMI, which eventually bought Virgin Music, had lost 30 per cent of its value; and the value of Stagecoach’s 49 per cent stake in Virgin Trains was down 60
per cent.

The
Rebel
Billionaire
was won by Shawn Nelson. The wild-haired twenty-six-year-old founder of the LoveSac Corporation, a manufacturer of bean bags which he claimed operated through
a network of seventy-eight shops with 400 employees, was, like all the contestants, a genial self-publicist. Branson handed Nelson, whom he had blessed as a ‘Mini-Me’, Fox’s cheque for $1 million and offered him a three-month stint as president of Virgin Worldwide. Shortly after, Nelson’s business stumbled and he was accused by critics of indulging in a ‘complicated shell-game’ to strip the company of its assets. He denied the complaints, and although his three-month spell as president of a Virgin company was not a meaningful experience, Virgin said that he had enjoyed the competition despite the setbacks. All the contestants, however, were constrained from speaking to the media by stiff non-disclosure agreements.

Humiliation in the TV ratings did not disturb Branson’s public image. Entrepreneurs, he stoically repeated, prospered by learning from failure. Nevertheless, unlike Trump’s show, Branson’s was not recommissioned. The finale was played out in September 2005. Coincidentally, Branson appeared at a fashion show in New York’s Bryant Park to hear Trump loudly condemn Branson’s show as ‘bombing’. In retaliation, Branson predicted to their audience that SpaceShipTwo would be taking off with passengers in just two years’ time. ‘My aeronautical engineers’, chirruped Branson in front of Trump, ‘are designing a Virgin hotel to be built on the moon, or perhaps orbit around it, with glass-encased sleeping areas. You could be making love in these see-through domes and looking at Earth.’

Branson’s fantasy was enhanced by finding an ally – Governor Bill Richardson of New Mexico. The politician had long lamented New Mexico’s failure to attract any futuristic industries since the atomic bomb had been developed in the state during the 1940s. Searching for ideas to reverse the decline in the state’s population and generate hope among the young, befitting his campaign slogan ‘Run with Richard’, he pondered a suggestion by Rick Homans, his secretary for economic development.

Homans had become a Branson zealot. After reading about the rocket’s success in the Mojave and watching Branson’s video promotion of Virgin Galactic, Homans had found a hero. ‘New Mexico’, he had told Richardson in 2004, ‘should aim for the gold standard of the commercial space industry – and that’s Richard Branson.’ Listing the names of other states that had been enriched by the space and aviation industries, Homans described Branson’s space venture as New Mexico’s ‘biggest economic opportunity for decades. We can’t afford to pass it up.’ If Virgin Galactic moved to New Mexico, Homans told Richardson, he would create over 3,000 new jobs and, according to one study, earn the state about $750 million by 2020. Richardson soon shared Homans’s idolatry of Branson. The visionary, they agreed, should be lured to their desolate state.

Like dozens of ideas that arrived at Virgin’s headquarters in Hammersmith, west London, the message from Rick Homans was discarded with little thought. Ignoring the rebuff, Homans flew to London to meet Will Whitehorn. Instead, he was greeted by Alex Tai, a Virgin Atlantic pilot who ranked among the headquarters’ gofers. ‘Will’s not available,’ Tai told Homans. ‘They’re not taking me seriously,’ Homans realised. Ninety minutes later, Tai understood what Homans was offering: nothing less than an airport dedicated to Virgin Galactic. The mood changed. ‘Hang on a moment,’ said Tai. Ten minutes later, he reappeared with Whitehorn.

Whitehorn knew that SpaceShipTwo could easily take off from Mojave, but the desert runway lacked glamour. Branson wanted a prestigious structure to entice more punters to buy a $200,000 ticket. At the end of two hours’ conversation, Whitehorn declared, ‘New Mexico is where Virgin was always destined to be.’ Homans returned to Santa Fe with a two-page memorandum of understanding outlining New Mexico’s agreement to build an airport for Virgin’s exclusive use.

Naturally, Branson sought a better offer. Early in 2005, along with Burt Rutan and Stu Witt, he visited Arnold Schwarzenegger in his office in Sacramento. The three asked California’s governor to finance the construction of a special facility in Mojave. Branson’s request was not unusual. His philosophy was clear: others always paid. Stu Witt was shocked by the negative reception: ‘We were met with, “Hey, what brings you guys here?” It was cold. Incentives, we were told, are a race to the bottom. Branson wanted to bring $300 million to the state, and he was greeted with such arrogance.’ Rutan agreed: ‘California lost an incredible opportunity. The governor didn’t understand it. And they let that opportunity get away with a smile on their faces.’

Soon after, Whitehorn called Homans. ‘Richard’s on. He wants to seal the deal with Governor Richardson.’ Branson was a master of identifying men with either hope or money. Governor Richardson had both. ‘Yeah!’ exclaimed the governor in November, blessing Branson’s generosity for planting the Virgin flag in the desert, forty-five miles north-east of Las Cruces, the nearest town. ‘Richard is tying his brand to New Mexico’s promises,’ cheered Homans, echoing Virgin-speak.

Two weeks later, in December 2005, Homans flew to London to unveil their agreement – by then over 400 pages long – in front of an audience at London’s Science Museum. The New Mexican government, Homans revealed, would sign a twenty-year lease with Virgin Galactic to use the airport. Three thousand eight hundred people from 126 countries, he repeated from Virgin’s script, had paid a deposit for a seat on the spaceship. One hundred, he continued, with Whitehorn’s nodding agreement, had paid the full $200,000 for flights beginning in 2008 or early 2009. No one seemed to notice that the take-off date had slipped, or at least no one appeared to care. And no one questioned the exaggerated statistics about the rocket’s abilities and timetable. The unpublished detail of the contract
reflected Branson’s tough negotiation and his optimism. Once the runway and the terminals were completed, Virgin would pay only $1.63 million in rent annually, plus a sliding scale of fees for each take-off.

Virgin Galactic had committed itself to launching a minimum of 104 flights in 2010 – two a week – carrying a minimum of 592 passengers annually. By 2015, Virgin assumed there would be at least 720 flights per year – two every day – carrying 4,104 passengers. The company would employ at least 174 local staff. Other clauses minimised Virgin’s liability if the rocket did not use the new airport.

Homans flew from London to Los Angeles to meet Branson. The tycoon arrived from Australia and then crossed the city to an airport used by executive planes. Homans was waiting there with the governor’s jet and the actress Victoria Principal, Branson’s mascot for Virgin Galactic. Branson himself was in ‘ensnaring mode’. He intended to effusively lard his commitment to Richardson with praise, making it nearly impossible for the politician to abandon the $200 million project. Not that Richardson had any doubts. On the flight south, Homans wrote Branson’s speech, filling it with flattery for Richardson.

‘Where is this place we’re heading to?’ asked Branson.

‘Nearest small settlement is Truth or Consequences,’ replied Homans, referring to a godforsaken strip named after a 1950s TV game show.

After they had transferred to a helicopter in Santa Fe, Homans told Branson through the headphones they were all wearing, ‘We need a name for the airport.’ Branson gazed wearily out of the window as Homans thought, ‘This is the world’s best marketing and branding man. He’ll have the best idea.’

‘Spaceport America,’ said Branson.

‘Great,’ gushed Homans.

At that moment, Branson leant against the helicopter’s door to
catch some sleep. The door flew open. Amid shrieks and shock, and with Branson held by the straps in his seat, the door was hauled back into place.

The sight after landing in the desert satisfied Branson’s expectations. On a dry plateau 4,300 feet above sea level, not far from where the first atomic bomb had been tested, the governor was waiting to be wooed. Behind him were thirty-five journalists who had been bussed to an obscure exit on the Upham highway. Branson’s appearance in the wilderness was embellished by his opening comment: ‘We’re going where no one has gone before. There’s no model to follow, nothing to copy.’ Richardson looked grateful to be hooked. He would immediately ask the state legislature, he said, for $100 million. The spaceport with launch pads and a giant runway would cover 1,800 acres. ‘We’re expecting 50,000 customers in the first ten years,’ chipped in Branson. Each passenger, he said, would experience a unique view of Earth during six minutes of weightlessness (the media’s reports of the duration always changed). Upping the ante, the governor outlined his bolder ambition: ‘We’ll have a cargo service from New Mexico to Paris taking a couple of hours and there’ll be flights to and from orbital hotels where space fliers could take vacations of cosmic dimensions.’ No one questioned which industries would ship their cargo to New Mexico or which rocket Richardson was speaking about. SpaceShipTwo was not designed to fly through space, and Branson could not afford the billions of dollars it would require to develop such a craft. Those details were irrelevant. All that mattered was Richardson’s timetable dovetailing with Branson’s certainty. After the first flights started in 2007, said Branson, ‘Virgin expects to launch three flights a day from the spaceport by 2010. Each flight will carry six passengers.’ The spaceport terminal, he said, would be designed by Lord Rogers, the famous British architect. He was mistaken. Lord Foster, another well-known British designer, was appointed.

After the ceremony, there was a celebration at a steak house in Santa Fe. ‘Our first job’, Richardson told Branson, ‘is building the road across the desert. Ten miles long.’ Branson smiled. He enjoyed benefiting at other people’s expense. The governor agreed that Branson could fly back to Necker on the state’s jet. ‘I’ll pay for the fuel,’ offered Branson. He was accompanied by Homans, who, after spending the night in Branson’s house, flew back to New Mexico. Not many people, he reflected, enjoyed such intimate moments with the great man and played Scrabble with him and his wife Joan after dinner.

In Mojave, Stu Witt was irritated. He could not see why anyone would want to take off from New Mexico rather than taking a helicopter ride from Los Angeles to Mojave airport. But he consoled himself: ‘Branson hasn’t invested a dime in New Mexico, and people will want destinations. They’ll want to go somewhere, not return to the same point.’

Branson had a spaceport and ticket-holding passengers. He now needed more money to develop the spaceship. Boosted by Burt Rutan’s encouraging reports, he flew in March 2006 to Dubai, a haven of cash-rich sheikhs. Amid the publicity for the start of Virgin Atlantic’s daily flights to the Gulf state, he hoped to persuade the Maktoums, the ruling family, to invest in Virgin Galactic. ‘A number of companies around the world are offering space travel,’ he said, ‘but they haven’t tested and built any spaceships. They certainly haven’t had any test flights into space. Virgin is the only company in the world that has achieved that.’ To embellish Virgin’s victory in space, Branson described his discussions with Robert Bigelow, an American aerospace entrepreneur, about developing inflatable pods so Virgin’s space tourists could stay in ‘a space hotel by the end of the decade’. During the visit to Dubai, he said that Virgin had registered ‘seventy-five fully paid bookings’. The sceptics were dismissed. ‘Personally,’ said Branson, ‘I think there’s a demand for space hotels.’