Radiohead

Sir Peter Michael, co-founder of Classic FM, is Britain's richest broadcaster - but his empire extends well beyond the air waves

The name of Sir Peter Michael may not often makes headlines, familiar only to a small section of the wine-collecting community who have a passion for vintages from California's Sonoma Valley. That the rest of us barely know the name is ironic, because he has had more effect on lives of Britons than hundreds of far better-known names.

The name of Sir Peter Michael may not often makes headlines, familiar only to a small section of the wine-collecting community who have a passion for vintages from California's Sonoma Valley. That the rest of us barely know the name is ironic, because he has had more effect on lives of Britons than hundreds of far better-known names.

The catalogue of what the 62-year-old electronic engineer from Croydon does is astonishing, if only for its sheer diversity, tempting one to wonder if there aren't two businessmen sharing the same name and knighthood. His CV reads more like a collection of aspirations thought up at random than a coherent description of one person.

Sir Peter is, variously, the co-founder and director of Classic FM; founder of Quantel, the company that pioneered advanced television graphics; owner of a Michelin-starred hotel and restaurant in Berkshire; a successful internet entrepreneur and founder and owner of one of California's top three wine estates.

The Daily Mail claims he is the richest man in broadcasting, outstripping the likes of Chris Evans and Carlton's Michael Green by a considerable distance. He is married with two grown-up sons, and his net worth is estimated at £120m, made mainly through sales of hi-tech companies he started, the California winery and his 33 per cent founding stake in Classic FM.

Waiting for him in the plush lobby of the Vineyard Hotel in Newbury, with various minions scuttling around like efficient beetles, one expects to be ushered to the presence of a grand, larger-than-life man who acquires biotech companies while simultaneously tasting wines and developing novel circuit technology.

But Sir Peter turns out to be diminutive, dapper and efficient, in a navy suit, white shirt and a navy-patterned tie. You'd put him down as a chief accountant in one of his companies - he has started one a year since 1970.

He is an electronic engineer who set up his first company, Micro Consultants, in 1968, a success on which everything else was ultimately based, as a supplier of electronic components to the computer industry. "I was always interested in electronics," he says. "I was an awful student at school but I did struggle through. I ran a small electronics business at school and designed a receiver that used valves, a clever little thing." He got his first patent when he was 19.

His conversation is compact and rapid-fire, punctuated by dry witticisms, and, sometimes, uncomfortable pauses. He rarely gives interviews and you sense he is not particularly interested in talking about himself, though he waxes lyrical about the technologies and companies he has embraced.

"The object and ethos of everything I've tried to do is to attempt to foretell what might happen and what might be an interesting opportunity," he says. "Very often it's in niche areas where there would be few players, where it's usually difficult. I see no fun in doing anything that's easy; it's always very challenging, and it doesn't always work. But sometimes it does."

Sir Peter's father was the chairman of the famous London philatelic shop Stanley Gibbons, and he says he was encouraged to become an engineer, without being drowned in wads of money. He studied at Queen Mary College, London, and got a job as an engineer at Smith Industries, combining it with a course in aeronautical engineering. Then, he says, he realised his future would be as a businessman and not a pure scientist. "I was trying to solve three-dimensional equations of flight and realised my math was not up to it, so I changed to studying management," he says.

He says he always knew he wanted to run his own company, but in his mid-twenties he was a corporate man, moving to Plessey, where he was commercial manager of one of the microelectronics divisions. The event that catalysed his departure, and the establishment of his first company, was, ironically, a triumphant presentation to the assembled grand personages of the electronics industry in a London hotel.

"I didn't know one of the directors of Plessey was in the audience, and afterwards he came to me and said it had been very interesting and asked what exactly I did at Plessey and how much I was paid," he says. "I said I was getting £1,800 a year [as a middle-manager] so he phoned up the head of my division and said: 'You're underpaying that man'."

The division head, in the unedifying managerial climate of 1960s England, did not jump at the opportunity. "From then on my life there was absolute hell," says Sir Peter drily. "I came home to my wife and explained what had happened, and she said: 'Well, now it's time to go and do what you've always said you've wanted to do'."

He resigned, recruited two engineers from Plessey, and set up Newbury's first hi-tech company, in 1968.

"Digital computers had just arrived and there was a crying need for interfaces between the old analogue world and digital products," he says. Two years later he started Quantel, to exploit the evolving world of digital coding and apply it to television special effects. It was a market that didn't exist at the time, with TV companies stuck in the analogue era and unable (for example) to use two pictures on the screen at the same time.

Sir Peter set up a head office near Silicon Valley in California, recognising the area's importance and America's pre-eminence in television. Quantel pioneered its field and its products, including the Paintbox, which became standard use for every production engineer by the end of the Seventies, were usually first to the market.

"The first time Quantel digital graphics were seriously used was in 1976 at the Montreal Olympics where they could put a guy in the studio and a guy in the stadium together on screen," says Sir Peter, with satisfaction. "Before, you could only have had one of them, then a roll, then the other." Most of the TV special effects we see today were invented by Quantel.

"By 1980 [when he took the company public] we had 800 employees in Quantel, and where we were selling things at £200 in 1970 we were selling things for £10,000 in 1980."

All the while, he was still running Micro Consultants and other small engineering firms for new niche markets ("some succeeded, some didn't"), and in the early 1980s he merged the businesses with UEI Group to form a digital electronics giant, becoming chairman of the group. The fine wine business was a family dream come true. "My father had always wanted to buy a vineyard in Burgundy but, at that time, to buy something in France was very complicated," says the man who claims he was more a "conspicuous consumer" of wine in his thirties than a real connoisseur. By 1980, when Sir Peter was 42, he had amassed enough wealth to buy an established vineyard in Bordeaux or Burgundy; claret prices were soaring and, if you had enough money and patience, it was thought to be a good investment.

That's what most oenophile businessmen might have done. Sir Peter did it the hard way, buying a tract of mountainside, with no vines on it, in (then unfashionable) northern California. "I had ventured north of the Golden Gate Bridge while I was based in Silicon Valley (30 miles to the south)," he says. "I fell in love with this part of northern California and said: 'One day I'm going to own a part of this'. I've always enjoyed the development of greenfield sites, so I didn't want to take over an existing vineyard."

After four years spending most weekends searching for a site, he bought a plot next to Chateau Montelena, on the slopes of Mount St Helena, some 40 miles north of the wine towns of Sonoma and Napa. He knew the going would be tough. In the early Eighties, California wines had none of the prestige they do now, either at home or abroad. Even the most patriotic American businessmen would order French wines at dinner, knowing the local offerings carried little status.

But a couple of years earlier, Montelena and Stag's Leap, two of the most prominent California wineries, had stunned the wine world by winning a blind-tasting against France's finest offerings in Paris. The great California wine boom was beginning, and Sir Peter was in at the start.

"The brief to the team, once we'd cleared and planted the vineyards, was me telling them: 'I've got a cellar of Burgundy and Bordeaux. I want something that I'm going to be able to put on the table next to it and serve my clients'."

Eight years later, the maiden vintage of Peter Michael Les Pavots, a Bordeaux-style red wine, won the seal of approval from Robert Parker, the American über-arbiter of wine, and the Peter Michael winery went on to remarkable heights in the Nineties. The white and red wines are often given scores equal to top Burgundies and Bordeaux chateaux in industry tastings, and the 1996 vintage of Les Pavots was nominated one of the best three wines in the world from that year by the influential Wine Spectator magazine. A bottle of it will set you back more than £150 in a London restaurant.

"It was a challenge to run a business 6,000 miles away," says Sir Peter. "I was there several times a year anyway (for Quantel) so it wasn't that much of a strain, and the invention of the fax machine helped. It wasn't easy, there were plenty of disasters, but it was great fun."

All the while he was running Quantel, UEI and a number of smaller businesses. He sold Quantel to Michael Green's Carlton Communications in 1988 for £526m, making £60m for himself.

He did not get on with the Carlton boss, for reasons he will not reveal on the record. "At that time, I wanted to go back to private companies anyway," he says. "Nobody should be in charge of a large public company for more than five years. It wears you out."

At that time, he started a venture capital fund for hi-tech companies in Germany ("because there was no venture capital in Germany then") and could have been forgiven for relaxing for a while.

Which he did (relatively speaking) for a few months, until, "my waistline started expanding from having too many nice lunches".

He was also asked by a contact if he would be interested in running a debt-laden hi-tech company called Cray Electronics (no relation to the Cray supercomputer manufacturer in America). The company had a turnover of £150m, debts of £40m, assets of £20m and was losing £5m a year. The share price had collapsed.

"I took it on because there wasn't enough aggro in my life," Sir Peter says. He ran the company during the early Nineties recession and slowly struggled back to life when he secured a deal to buy Doughty, another electronics firm.

"It had a £200m turnover in things I pretty well understood, I bought it for £50m and after that things really turned around."

Cray was sold in 1993, netting Sir Peter another fat wallet-full. Around this time, he became involved in what he calls "one of the two best things I've ever done in my life. The nicest things, irrespective of profits".

Margaret Thatcher's Broadcasting Act of 1990 opened the airwaves to a nationally-based FM radio network to compete with the BBC. To mollify the BBC, there was a stipulation that the station content be based on the most difficult sector, classical music.

"I loved music, I thought there was a need for a classical music station," says Sir Peter. The unity of City banks, venture capitalists and the BBC in believing a commercial classical radio station would fail made him more determined.

He got together a management team and put up more than a third of the £6m startup capital, in return for a 33 per cent stake in Classic FM.

"There were plenty of times in the runup to the launch when we were best by doubts," he says. "John Drummond, who ran the Albert Hall, cornered me at a party once and said, 'It's not going to work, all the research says no one wants to listen to classical music with advertising in it. It's going to be a disaster'. I felt very dejected after that."

Classic FM launched in 1992, to instant success, and eventually merged with GWR, in which Sir Peter now has a 7 per cent stake, having sold 500,000 shares last week to fund one of his latest ventures.

He vehemently believes government restrictions on the operation and ownership of radio stations are going to stunt growth and innovation.

"If we are going to be competitive in the next decade, the rules have got to change, because 50 per cent of radio managers' time is spent trying to avoid breaking the rules, which is a ridiculous waste of talent."

He is using his not inconsiderable influence within the Commons to press for wide legislative changes.

Among the ventures Sir Peter is involved in (as an investor and executive) is the Virtual Music Store, a concept launched in London record shops, which allows customers to make their own compilation CD from the store's wares.

He is also one of the forces behind Pepper's Ghost, a radical computer animation company making headlines for its new technology, and SideWise, a software startup making an intelligent search engine.

Like all his previous ventures, some will probably fall by the wayside, and others will likely succeed spectacularly, but he is as enthusiastic about them as a 22-year-old internet entrepreneur would be, peppering me with delighted shards of information.

So, with his fortune and reputation made, why is he showing no signs of fatigue with his myriad operations? "Well," says Sir Peter. "I still haven't made up my mind what I'm going to do when I grow up."

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