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Sunday 26 November 2006
Sarah Sands: It's business, Richard. Of course it's personal
In the battle for ITV, Rupert Murdoch may seem the villain to cheeky, friendly Branson. But it's really a struggle between a predator and a shark
So who is the outsider now? Richard Branson's successful media campaign against Lord King's British Airways in the 1980s was based on David and Goliath. In one of his many self-defining statements, Branson said: "We're the cheeky airline having fun at the expense of a dinosaur."
The personality of the honest underdog has served him well and he was quick to reprise the part last week. Did you hear that emotional catch in his voice when he described his new adversary Rupert Murdoch as a "threat to democracy", a figure who made and broke governments? There was a touch of Tony Blair in the performance, another good man besieged by evil.
Done down, maybe. But Branson is hardly the innocent abroad. He has become one of the wealthiest men in England, worth an estimated £1.4bn. He is no longer a scrappy entrepreneur standing on establishment toes, but a media giant himself, a significant shareholder in NTL, shortly to be renamed - for no one doubts the power of the brand name - Virgin Media.
He would be bigger still should he succeed in taking over ITV, but the next thing he knew was that James Murdoch's BSkyB had bought its way into the deal: a share big enough to influence the future of ITV, small enough, at less than 20 per cent, not to worry the regulatory authorities.
It was Murdoch and, worse, Murdoch Jnr, who had pulled off the kind of insolent stunt that we might once have expected from Virgin. As for his dad's response to the deal, it is now part of City folklore. "That's my boy..."
The two men have built their empires in contrasting styles. Murdoch is a figure of hate in liberal Britain, accused of destroying media standards of decency. He has not been secretive, but nor has he sought publicity.
He is said to be prudish in his own views, but has never let that get in the way of a deal. It is assumed that, last week, he called off the unpleasant deal that his American publishing and television subsidiaries had arranged with O J Simpson not because he thought it was wrong, but because it was looking bad for business.
Branson, on the other hand, has achieved brand imperialism for Virgin partly through pushing his own brand, a kind of "good guy" figure. He has achieved the "studentification" of Britain, peddling music and travel and umpteen brand extensions, each personally promoted.
For Murdoch, an Australian who is now an American citizen, Britain is merely a place where he does some of his business. He does not mind much what happens here, as long as it is not bad for his business. Because they believe that he can influence elections, politicians prostrate themselves before him. In the case of our Prime Minister, they fly all the way to California to do so. Murdoch said in a recent interview that it was a bit of a bore coming to Britain because Tony Blair and Gordon Brown always wanted to see him, and it took up his time.
Richard Branson isn't terribly interested in the fate of British governments, although he has been outspoken in his opposition to the Iraq war. He has told me the political process reminded him of school and that he would run a mile from entering politics. This does not mean he is uninterested in political power. It is just he would prefer to run things outside the electoral process. When his mother Eve once proudly boasted that her son would become Prime Minister, I think she underestimated his ambition.
In this way, Rupert Murdoch could claim that he is less of a threat to democracy than Branson. He cares only about money. The star of his swanky summit at Pebble Beach this summer was not Tony Blair but the creators of MySpace. Indeed, as the influence of national governments is constrained by globalism, Murdoch needs them less.
Meanwhile, this summer Richard Branson was holding talks in Necker about conflict resolution. He wants to create a government of elders who would act as a branch of the United Nations. The sort of people who show up to a Branson summit are Nelson Mandela, Kofi Annan, Bono.
Supporters of Rupert Murdoch claim that Branson is actually a rather conventional figure. Even his businesses are about gaps in the market rather than spotting the new. Why was Branson so slow to see the point of the internet, crow Murdoch's men. One reason could be that Branson lacks the megalomaniac business instincts of Rupert Murdoch. He is a truer entrepreneur in that he deals in businesses that he loves rather than in markets that he craves. When I asked him why he had not bought into the internet, he replied simply that it did not personally interest him.
I also asked Branson whether he would yet consider buying a newspaper. He had the means and it might be a useful vehicle of communication for him. He gave that slightly nervous giggle of his and said that he had already done some journalism in his youth, when he ran a student magazine. He could have added that he did not need to own newspapers to get them to trumpet his cause. The Sun, for instance, was his cheerleader during the fight against British Airways. All the hot-air balloon flights and beach junkets in the world will not get him The Sun's support now.
The battle over ITV may remind Branson of his last unhappy business experience, his bid for the lottery. There he was, the people's champion, offering a people's lottery against the starchier, less appealing business that was Camelot. Then suddenly Dianne Thompson at Camelot appealed to the courts, claiming that the National Lottery Commission was favouring Branson. In a reversal that stunned Branson, sympathy was suddenly with Camelot. They had become the underdog and they won the licence. Branson accused the commission of failing to take a "risk". He was still determined to portray himself as an outsider.
Rupert Murdoch stays aloof from the kind of social networking that got Branson into trouble. That is largely because he does not need to. His son-in-law Matthew Freud can smooth the way perfectly well. Freud is at the heart of the liberal celebrity culture that Branson should claim by right. A recent Freud dinner I attended included Sting and Trudie Styler, Jemima Khan, Annie Lennox and Madonna - as well as The Independent Editor-in-Chief Simon Kelner.
Both Branson and Murdoch can claim to have built up their businesses themselves. Branson began his mail order record business, at 19, in a basement. Murdoch was born into the newspaper business but has created a media empire beyond the imagining of his father. He likes to say that Sky was launched in 1989 as a "construction hut in the mud", for the born-in-a-shoebox business model is essential to myth-making. One of the most contemptuous things said of Conrad Black, the fallen newspaper proprietor, was that he went to school in a chauffeur-driven car.
Both Branson and Murdoch could relate more readily to the chauffeur than to the barefoot-in-the-street childhood of some businessmen. Branson was educated at Stowe, the son of a lawyer and an air hostess. Murdoch went to Oxford University - where he is now funding a media centre - as a Rhodes scholar.
Both can genuinely claim to be risk-takers. When Sky was launched Murdoch was said to be losing £10m a week. Branson told me, rather proudly, of starting Virgin planes: "You know what they say, the way to become a millionaire is to start as a billionaire and buy an airline." Both men are prepared to rack up frightening debt; both sail close to the wind; both are survivors. They have a sort of high testosterone respect for each other. Richard Branson said: "I admire him as a businessman. He knows how to play poker. He's playing it on the basis that he thinks he can get away with it."Andrew Neil says: "Murdoch fears and respects Branson. He knows the Virgin name is potent among the Sky demographic."
That is the real difference between the two men. Murdoch is a genius businessman but there is a kind of creative destruction about his work. The British establishment that Rupert Murdoch despises seems quirky and helpless in contrast to him. Britain may not be as powerful as America or China but it is our country and Murdoch's indifference towards it makes us prickly.
If this were a frontier movie, there is no doubt Murdoch and his boy James would look more villainous than Richard Branson and his boy Sam, a gentle surfer dude with ambitions to sing or act. He would get on better with Lachlan, Rupert Murdoch's eldest, who fled the business, than with James. It is to Branson's credit that he has not forged children in his image.
Those who know James have said for years that he has the M factor, the drive and will. Perhaps the only member of the family with more intense ambition is his second wife, Wendi. It was a late criticism of Rupert Murdoch that he had never really groomed an heir. Now he has plenty.
Richard Branson claims that Virgin staff are known as "mavericks in paradise". Yet Virgin has a reputation for ruthless business dealing. As one holiday operator told me: "It is the one company that won't cut you any slack."
The double act has worked well for Branson, the manner of a hippie, the business instincts of a shark. I remember having lunch with him at Holland Park when he tried to sell me personal insurance before the soup arrived.
When I spent a few days with his entourage this summer, I had a different impression. He talked of withdrawing from the business, which more or less ran itself now. He was finding some of the publicity stunts less fun and was hoping that Sam might become more of a Virgin figurehead.
The man who once boasted "Books? No way" was reading history. I asked what he would do if, inconceivably, his business collapsed overnight. He said that he would go and live in Bali. He did not say that he would rebuild.
The danger for businessmen-philosophers is that they are prey for businessmen-predators. Of course this was the moment for Murdoch to move in. And for all Branson's rhetoric about the end of democracy, it isn't really. It is just about business. And unfortunately, business is personal.
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