What You See Is What You Get: My Autobiography (94 page)

Pace was also a public company and when Malcolm Miller arrived as managing director, a new share option scheme was implemented. When the share options kicked in, Malcolm made PS8m, and good luck to him. However, it seemed afterwards that Pace had a bit of a problem with their financial accounting and their relationship with the Stock Exchange.

In comparing Pace and Amstrad, I would say that, from a technical development point of view, they were superior to us in that they had loads of engineers (maybe 200 compared to our 30). However, when it came to buying and component procurement, Pace was clueless, and the same could be said when it came to manufacturing. They used sub-contractors in Romania and Hungary and even attempted to assemble some of the stuff themselves in England, the consequence being that they hardly ever made a profit. In fact, there were a couple of years when they kept putting out warnings to the stock market, saying their profit forecast wasn't going to be met. They would try changing their accounting period or state that some other phenomenon had arisen which had affected their figures.

By autumn 2002, Malcolm had seen the writing on the wall, in the same way as he did when he left Amstrad. There was no more big money to be made by him at Pace; it was going in the opposite direction. His contract with Pace was up and so, as he put it, he was free to leave to take up other opportunities, as you do when you realise there's no more cash coming your way. At least he didn't quote the usual 'irreconcilable differences with the board' bollocks that people use in order to piss off when they've copped their dosh.

While he was at Pace, Malcolm and I spoke on and off - just general industry chitchat. He never disclosed to me any of their so-called secrets or pricing. However, he did ask me why, when Amstrad took some of the Sky+ business, we slashed the price by PS40. I told him he should know better than anyone that as long as we were meeting our 1.54 profit index, I was a happy bunny. The lower the price, the more orders we would
all
get and, more importantly, BSkyB could subsidise the product so even more consumers would take it up. He moaned about having to come down in price to compete with us and how it forced Pace to lose money.

After leaving Pace, he called me and asked whether he could come and see me at home, to seek my advice on something. He rolled up in a bright-red Ferrari, bought with some of his PS8m windfall. Ann, of course, had known Malcolm since he was a youngster (remember, this was the young man who had come to work for me back in the seventies and had seen the meteoric growth of Amstrad). She'd always liked him, thinking he was an affable fellow, and now greeted him and caught up on some of the family-type small talk. It turned out that Malcolm wanted me to give him a reference for the chairman of Raymarine, a company which made equipment for the boating market. Malcolm was going to take the job of president and CEO to help Raymarine expand and get it listed on the stock market. He was hoping he would get share options and make himself another packet. I was happy to recommend Malcolm - I saw no problem in helping out some of my old people - and he got the job.

Given our long relationship, I didn't expect what happened next. Ann and I and some friends were in Scalini, a restaurant in the West End, when I noticed Malcolm's wife walk past our table. She saw Ann and me, stuck her nose in the air and blanked us completely. To be perfectly honest, Ann and I had never really got on well with this woman. There were always rumours around the firm that she was a bit of a demanding snob and gave Malcolm a lot of grief. In the past, the pair of them had turned down invitations to my fiftieth birthday and other family functions with various excuses, and we'd always thought it was his wife not wishing to come rather than Malcolm. However, on this occasion, Malcolm was also in the restaurant. Later in the evening, he got up with his entourage and walked out. I could see that he knew I was there, yet for some reason or other, he did not come over to my table to say hello. Given our history and the favours he had asked, I was stunned. It seemed to me a blatant snub. That was it! If Miller wanted help or advice in the future he knew where he could stick it. It seemed to me he was being a real selfish shit.

Malcolm did get in touch with Nick Hewer to say I'd misunderstood his behaviour, that really it was pressure from his wife (from whom he was now separated) and that he would like to mend the relationship. Nick, being the nice fellow he is, can sometimes be a bit naive. I told him, 'Malcolm is off the radar, Nick, forget him. I
know
what happened in that restaurant and, trust me, he was just being Mr Bigshot in front of his pals. He didn't want to come up to someone like me, as it would have been deemed grovelling, which of course it wasn't.'

*

My son Daniel left Spurs shortly after I sold it to Enic and came back to Amshold to run the property business, Amsprop. Up until then, I hadn't fully concentrated on the property side of things. I'd always viewed it as an investment, but boring. However, over the years, it had grown and it was now time to pay more attention to it, so I put Daniel in charge.

So far I've been sharing lots of stories with you about many of the deals I've done. Reading them, you might think I'm stretching the truth a bit or that I've got a big ego. They say gamblers only talk about the bets they won and forget to mention the losses. Let me assure you, no matter how unbelievable some of the stories I've shared may seem, they're all 100 per cent true. Having said that, in the football days, you'd have seen another side of me. There was no shrewdness shown in some of the negotiations for players - I lost my marbles completely in that industry. I was intimidated by managers and fans into making sure we had a constant supply of players. When you're desperate to land players, you do silly things. I could tell you stories about football deals I did where I was legged-over badly. You'd wonder whether you were reading about the same person.

Things didn't always go smoothly in the property business either. Take the building I acquired in Old Park Lane, London, which I wanted simply because it was in such a prime location. According to the estate agent, it was being sold on behalf of some Middle Eastern gentlemen who had owned it for many years. On the ground floor and basement was the Hard Rock Cafe and there were six separate apartment floors above, each being around 5,000 sq ft. The apartments were totally dilapidated - they hadn't been used for years - but the agent told me that if I were to spend just PS2-3m in total on refurbishing them, we could easily sell them for around PS2.5-3m
each.
Having been advised by this prestigious firm, and having the hots for this wonderful building, I purchased it on impulse for PS12.7m and engaged the services of Igal Yawetz, the architect associated with Spurs.

To fast-track the story, it transpired we needed to spend around
PS12m
in refurbishing the apartments, not the PS2-3m the agent suggested. We found the Hard Rock Cafe was emitting horrible smells cooking their hamburgers, making it unbearable to live in the apartments above. And when the builders finally got on site, they discovered that the whole of the steel frame of the building was rotten. Apparently, there had been an internal water leak for the past ten years which had rusted the steel. We had used a firm of mechanical engineers to survey the building and they'd signed it off, telling us it was okay to buy. Clearly it wasn't.

I instructed one of my staff, Andrew Cohen, together with Alan Watts at Herbert Smith, to try to recover some damages from this firm, as the cost of changing all the steel in the building was going to run to PS2m alone. Andrew, a chartered surveyor, got a bit over-enthusiastic and spent months communicating with Herbert Smith. Alan Watts warned me that there'd been so many phone calls, I'd better brace myself for a very high bill, which came to over PS250,000! When we finally settled with this company, we only managed to get about PS1m in compensation, as this was the cap they were insured for. In the end, the lawyers got PS250,000 and we got the balance. How shrewd is that, eh?

The contractors we employed were also a bunch of monkeys. Halfway through the building works, I received a surprise phone call from the
Sun,
telling me the Hard Rock Cafe building was on fire! It turned out the builders had left a heater on overnight, which had set fire to a whole section of the building. This put the contract back by about six months and a lot of the work had to be started all over again.

My daughter Louise, who was working for Amsprop at the time, was in charge of furnishing and decorating the apartments, each of which had its own character - we spent a fortune on the finest finishes. At last, we were ready to start marketing the apartments.

The Hooray Henry agent who'd sold me the building still maintained that the apartments would fetch only PS2.5-3m each. I reminded this prick that he'd told me it was going to cost PS3m max to refurbish the building and I had just spent the thick end of PS12m. So if you divide this PS12m by the six apartments, they'd already cost me PS2m each on refurbishment! I told him that none of the apartments was to be sold for less than PS5m. He started quoting me industry statistics on how it would be impossible to achieve PS5m - effectively PS1,000 per sq ft - and how it had never been achieved, even in Mayfair, the poshest of places.

I suppose the point I'm banging on about is that these agents know sod
all. They're only interested in receiving their commission. It seems when they're trying to sell something
to
you, it's the best thing since sliced bread. When they're trying to sell something
for
you, it's the worst thing on the planet. An estate agent has a very simple business. The only thing they have to invest in is an office and some people. They have no stocks, no inventory and they have nothing to sell or buy. They make all their money by taking a commission on recommending properties to buy, or acting as an agent for sellers. Sounds good, right? Sounds good if they knew what they were talking about, but most of them don't.

Say I had a property I wanted to sell for PS5m. An agent would charge 1 per cent for selling it and if he did a good job, he'd deserve his PS50,000 fee. However, say I insisted on PS5.5m, his fee would be PS55,000 instead of PS50,000. Typically, he'll bullshit me that the best he can do in the marketplace is PS5m. All
he
wants is a quick sale - from his point of view PS50,000 in hand is better than hanging on dreaming of PS55,000. He doesn't care that I want the extra half a million quid.

Their so-called 'research documents' are not worth blowing your nose with. Everything they do is based on events that happened a week before, meaning that if someone sold something for PS1m last week,
that
is the basis of their research on how much something comparable is worth today. I explained to the bozo who'd sold us the Mayfair building that we had created 5,000 sq ft apartments - something very special, something you could not normally find in this area of London, so there was nothing to compare it to. I told him it would need a very special buyer to come along with lots of money, who would fall in love with the apartments and buy one, and
that
was whom they should target. If his firm wanted to sell them, he should not waste my time bringing anyone along unless they had north of PS5m in their head.

In the meantime, the Hard Rock Cafe, who had enjoyed occupancy of this building for many years without any interference from the landlord, was starting to realise they weren't dealing with a bunch of idiots in Amsprop. They had to start cleaning up their act and install new equipment in their kitchens to cut down the smells. On top of this, they were playing loud music which, of course, would disturb any residents moving into the new apartments. We advised them that we would have to report the environmental damage they were causing by way of smells and noise to Westminster Council. This resulted in them taking the unprecedented step of buying the first-floor apartment from us to use as offices for the Hard Rock Group. By doing this, they would protect the apartments above from the sound (and to
a certain extent the smell). They were not happy bunnies, as you can imagine. They'd been there for years, running their business without any disturbance, then along I come and upset the apple cart. The former Middle Eastern owner had completely ignored the management of this building.

When the first lot of punters started to look at the apartments, the idiot agent put forward offers of PS3m and PS3.5m, which I summarily rejected, reminding him of what I'd said. Eventually, as I'd predicted, along came a couple who fell in love with the idea of these wonderful 5,000 sq ft apartments, with their exceptional views over Green Park and London. They paid PS5.5m for the second floor - just like that, without blinking.

I think a picture now emerges of what total tossers some of these estate agents are. They do not know what they are talking about. In the case of the Hard Rock building, it was only my insistence that I wasn't going to sell any of these apartments for less than PS5m that made it happen. And here's the funny part of the story. In the
Estates Gazette,
the estate agents' industry magazine, our agent put out a story about how they'd magnificently achieved the highest sales price for apartments in Mayfair, at over PS1,000 per sq ft, taking full credit for their brilliant achievement. If I'd taken their advice, we'd have lost a packet on the building.

People wonder why I have such a low opinion of estate agents. Perhaps now they will understand, as this was just one of
many
experiences I've had with these people. I've come across other estate agents, particularly in the early days, who would sell their grandmothers for 50p. And it is those rogues, I'm afraid to say, who formed my general opinion of certain agents, an opinion which still remains to this day.