Never Mind the Bollocks

To put Mike’s mind at ease, Richard offered to take him for a drive in his Bentley. They drove past the Queen Elizabeth Hall when Richard slowed down. There were Mike Oldfield posters everywhere. A crowd of people were making their way to the concert. Richard stopped the car. “Do you want to drive?” he asked. He knew Mike loved that car. “Alright,” Mike agreed. Mike drove Richard’s Bentley further. Then Richard asked, “Would you like to have this car as a present?”

“A present?” Mike wondered.

“Yes. I’ll get out here and keep walking. You just keep on driving and the car’s yours.” Richard gave Mike an incentive to perform live.

“Come off it. It was your wedding present.” Mike hesitated.

“All you have to do is then drive it around to the Queen Elizabeth Hall, and go up on stage tonight, and then it’s yours.”

Mike Oldfield drove away in Richard Branson’s Bentley.

Last week on Methods of Prosperity:

Richard Branson dropped out of school at age 16. Back then, the headmaster of his school made a prediction. Either Richard would go to prison or become a millionaire. At age 20, the first part of that prediction came true. Richard Branson’s journey with Virgin Records took a significant turn. British customs arrested him for violating the Customs Excise Act of 1952. Branson chose to avoid further legal trouble. His mother bailed him out with £30,000, using their family home as security. To avoid a criminal record, he negotiated an out-of-court settlement. It amounted to three times Virgin's illegal profit. This incident drove him to focus on making Virgin Records successful. He reinvested earnings from the record shops to open more outlets and repay his debt and family. In 1972, Branson bought and converted a manor house. He turned it into The Manor Studio, making it the ideal recording environment. Virgin Records launched in 1973 with Mike Oldfield’s Tubular Bells. A promotional concert was set for June 25, 1973, at the Queen Elizabeth Hall in London. The only problem was that Mike Oldfield’s insecurity became his own worst enemy.

Part 55. Sir Richard Branson (continued).

You can read this week’s TL;DR here.

Key Lessons:

• Pay nothing upfront where possible.

• Controversy gets attention.

• Expand during a crisis.

• Find a star product.

• Be generous.

Now there’s a collectible version of this newsletter! Methods of Prosperity newsletter number 18 is available to collect as of June 28, 2024. If you’re so inclined you can permanently own it!

Between 1974 to 1976, Mike Oldfield was Virgin Records’ top-selling artist. His debut album, Tubular Bells, was the first release on Virgin Records in 1973. It became a massive success. It went on to be one of the biggest selling records of the 1970s and featured on the soundtrack of The Exorcist. Sales exceeded a million copies. The record generated a significant financial boost to the label.

Virgin signed other bands on the back of Mike Oldfield’s success. Most of them failed. Virgin re-invested all the revenue earned from Tubular Bells. Mike Oldfield’s follow-up album went straight to number one. Tubular Bells was still at number two. Money kept coming in. Virgin was in danger. Public perception would be that it was only Mike Oldfield’s label. Mike did no promotion himself, but sales of his records eclipsed other artists on Virgin’s roster.

During that era, Virgin failed to sign 10cc, The Who, and Pink Floyd. At the end of 1975, Richard raised $4 million to sign The Rolling Stones. EMI won the bid at $5 million. Besides Mike Oldfield and Tangerine Dream, Virgin had no other big artists. They were running out of cash. The entire company depended on revenue from Mike Oldfield’s records.

Virgin Record stores broke even. Richard negotiated zero upfront rent costs. He always finds creative ways to launch his businesses with minimal initial expenses. Whenever they run into a cash crisis, the only way forward is to expand out of it. Virgin could either keep scraping by, or go all-in on breaking a new band. The first option was reasonable. Otherwise they could lose everything. The second option was a greater risk with a greater reward. Richard chose to go all-in. In the meantime, the company would have to cut expenses.

By 1976, punk rock was happening. The Damned. The Clash. The Stranglers. The Sex Pistols. Anarchy in the UK by The Sex Pistols caught Richard’s attention. EMI signed them. Richard inquired about a chance that Virgin could take them from EMI. Controversy fueled The Sex Pistols. In a few months, EMI wanted to get rid of them. Malcolm McLaren held up the deal. He was their manager. In 1977, McLaren made a deal with A&M records. The Sex Pistols hated A&M, or they pretended to as part of their image. A&M hosted a party to celebrate signing the band. Sid Vicious, the band’s bassist ruined the party and got sick all over the desk of A&M’s managing director. His name was Derek Green. Richard heard about it and called Derek.

Sure enough, A&M was dropping the Sex Pistols from their label.

“Can we sign them?” Richard asked.

“If you can cope with them” he said, “We certainly can’t”.

A&M gave the band £75,000 as compensation for their cancelled contract. EMI had given them £50,000. The Sex Pistols earned £150,000 for doing nothing other than recording Anarchy in the UK. That and vomiting, swearing, and being punk rockers.

Malcom McLaren was a master at flipping record contracts. There was Virgin Records lined up to buy the next one. The Sex Pistols were the most notorious band. Richard knew they had a new single recorded, God Save the Queen. They wanted it out in time for the Queen’s Silver Jubilee, celebrating 25 years on the throne. It was scheduled for July 1977. Malcom McLaren came to Virgin Records to make a deal on May 12 that year. Virgin signed the British rights to the Sex Pistols’ first album for £15,000. A further £50,000 payable for rights for the rest of the world. On May 27, 1977, Virgin Records released God Save the Queen. Banned from radio and television, the single sold tens of thousands of copies. Never Mind the Bollocks, Here’s the Sex Pistols released in the UK on 28 October 1977. It’s the only studio album by the Sex Pistols. Warner Bros. Records in the US released it on 11 November 1977.

Considered vulgar in some contexts, “Bollocks” stirred controversy. Police made Virgin record shops take down posters for Bollocks. They arrested one of the shop’s managers for the Indecent Advertisements Act of 1889. A decade prior, Richard had been in trouble over the same law. When Richard was running Student magazine, he formed a health service. This organization directed people towards medical attention for venereal disease. Police arrested him for advertising this service. He called the same lawyer who defended him then. He advised Richard to find a linguistics expert to define the exact meaning of “bollocks”.

Richard recruited the professor of linguistics at Nottingham University. He explained that bollocks is an 18th century nickname for priests. Priests generally speak a lot of nonsense in their sermons. So bollocks came to mean rubbish. Bollocks actually means priest or rubbish.

In court, the professor was a key witness. He explained to the court that bollocks had nothing to do with testicles. It actually meant priests or rubbish. Richard’s lawyer questioned the professor.

“Are you saying that this expression, Never Mind the Bollocks, Here’s the Sex Pistols should more accurately be translated as, Never Mind the Priests, Here’s the Sex Pistols?”

The professor responded, “I am. Or it could mean, Never Mind the Rubbish, Here’s the Sex Pistols.”

To that, the lawyer stated, “Never Mind the Priests, Here’s the Sex Pistols. That is the meaning of this expression. Well, I have nothing further to add. It sounds like a strange title, but I doubt whether the church would mind.”

“I doubt they would either,” the professor agreed.

The prosecutor pressed the professor on this. How could he could be sure this wouldn’t offend a clergyman? The professor revealed his collar, revealing that he was a clergyman. The court dismissed the case.

This was pivotal for Virgin Records. Richard discovered reggae artists like Peter Tosh the year before. Signing the Sex Pistols would launch Virgin into new territory. It put the label on the map of the new scene. The Sex Pistols had a hit record, but they were about to self-destruct.

To be continued...

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