by Sugar, Alan
In the meantime, the Hard Rock Café, 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 £3m and £3.5m, 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 £5.5m 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 £5m 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 £1,000 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.
Another genius I came across was a so-called expert on the Mayfair retail market. We owned a few buildings in the fashionable Bond Street area and, having acquired one for about £26m, we were on the lookout for others. This genius offered us another building at a price which yielded an income of only 4 per cent (for those who don’t get this, it’s the percentage of income achieved by rent based on the price you paid for the asset). This was massively expensive at the time. He assured us this was the way the market was and there was no way that buildings in Bond Street would go for a better yield.
I said that if that was the way the market was – only yielding 4 per cent – then the building we’d bought for £26m a year ago in the same location (arguably a much better location, with a much better tenant) would, based on the rent we were achieving, using his 4 per cent figure, now be worth £43m! I offered him my hand, ready to shake on it.
‘Well, bigshot? What about it? Where’s the forty-three million? Ours is in a better location in Bond Street than the one you’re offering, so come on, Mr Expert, where’s the forty-three mil?’
What was his answer?
‘No, no, you won’t get forty-three million for that building. Everyone knows you only paid twenty-six million for it a year ago.’
You couldn’t make it up, could you? I promise you, that’s what he said. What a tosser.
We went on to sell all the apartments at the Hard Rock, including the penthouse, which I personally sold to the steel billionaire Lakshmi Mittal for £7.25m.
This episode demonstrates one thing. People who have cash (and don’t need to panic to repay a bank) can take their time in the decision-making process. So many of the horror stories in the real estate business come from people who use bank financing to cover the acquisition of buildings and refurbishment. This places them under enormous pressure to sell in order to repay the bank.
I’ve concluded over the years that there is no science to the real estate market – it just tracks the general economy. If retailers are doing well and business is booming, premises will be taken and high rents will be paid. I’ve sat through a few peaks and troughs of booms and recessions and seen the value of buildings rise and fall like a yoyo. Over the long haul, buildings in strategic prime positions in high streets and town centres will always maintain their value. Eventually, through one of the cycles of boom and bust, you will have the opportunity to sell at the top of the market or buy at the bottom.
I openly admit that I am no expert in the real estate business. As I’ve said, I find it a bit boring. However, if it is played correctly, it’s a safe place to be. Having said I’m no expert on real estate, I can double-barrel assure you that neither are any of these agents.
*
All through the nineties and well into the new millennium, I had been writing for some of the national newspapers, mainly on business or football. I’d agreed with Piers Morgan, the then editor of the Daily Mirror, to do a weekly business column answering questions from readers who were either interested in starting their own businesses or needed advice on their existing ones. Hundreds wrote in every week. I’d select the best questions and dictate the answers to my secretary, Frances, in bulk, so the paper would have enough stuff to get on with for at least three weeks. This avoided having to meet weekly deadlines. Other newspapers, like the Evening Standard, also wanted me to do a regular weekly column, but that would pin me down to a deadline and was a bit like having to get your homework in on time, so I declined.
I continued doing my Q&As at universities, schools and colleges of further education and was often asked to speak at charitable events and business seminars. With all these activities, and my involvement at Spurs, I think it fair to say that I was a well-known person in England. Of course, the financial community remembered me from the mid-to-late eighties. As a result, over the years, Nick Hewer received lots of requests for me to be a guest on various chat shows or to be involved in some second-rate TV reality or quiz show, all of which I rejected. However, I had given many interviews on TV – on football programmes and The Money Programme in the computer days – and while I wasn’t an expert, having done it so many times, I’d become experienced in how to deal with it.
In March 2004, a young researcher from the BBC came to Brentwood to talk to me about a reality programme known as The Apprentice. The BBC was considering the programme, which had been successful in America. She gave me the bare bones of the format: a leading businessman such as myself would be presented with fourteen candidates, who would be split into two teams each week and given business tasks. Over the course of a twelve-week period, I would eliminate one candidate each week who’d failed to perform well. The researcher had been sent to check out some potential businessmen to head up the programme. I told her I was mildly interested, but needed more detail. She said she’d get back to me and that was the last I heard.
I thought no more of it until I went to Florida at Easter-time. Ann told me that her American friends there were raving about a programme called The Apprentice, headed up by Donald Trump. Apparently, it was the biggest hit in America and everyone was talking about it. It kind of rang a bell in my mind and I remembered the young lady from the BBC who’d come to visit me in March. When I spoke to people I knew at the tennis club, they also told me how popular The Apprentice was and how they always stayed in to watch it.
So I was interested (although surprised) when on returning from Florida after Easter, I was contacted by the television production company Talkback Thames who wanted to talk about – The Apprentice. The young lady who’d come to see me, Sophie, explained th
at the rights had been bought by Talk-back Thames’s parent company, Fremantle. I wasn’t really au fait with the goings-on, as I had no knowledge of how the TV industry worked. It later became clear that the owner of The Apprentice format, Englishman Mark Burnett (who resided in America), was the person who had thought it up and made it popular in the USA, using Donald Trump as the host. He sold the rights to Fremantle, having previously approached the BBC to see if they wanted to buy the rights directly. Knowing the BBC, it may well be that during their slow deliberations they were gazumped by Fremantle.
The irony was that Talkback Thames, having now acquired the rights to produce The Apprentice, entered into an agreement with the BBC for them to broadcast it! To be honest, I wasn’t interested in all the politics of who did what, but I was interested in doing the show, simply because I’d seen it in America and knew how popular it had become. Additionally, I felt it would be an extension to the work I’d done over the years in promoting enterprise and business to young people. It would be an opportunity, in a controlled way, to get my message across – rather like I’d been doing on my round-the-country Q&A trips.
Young Sophie explained to me that they were interviewing various people and I was just one of them, so I asked Nick Hewer to pursue the boss of the production company and see where I was in the pecking order. Nick got busy and talked to the producer at Talkback Thames, Peter Moore, who said I was one of three or four people they were homing in on. A couple of the other obvious candidates were Philip Green and Stelios Haji-Ioannou. Interestingly, Richard Branson wasn’t on their list, as he had agreed to appear in a copycat version of The Apprentice in the USA for Fox TV.
I admit, I really wanted to do this – no question about it. I told Nick to get to work on Peter Moore. Having seen how successful the show was in America, there was no question of me needing to be persuaded. I also called Philip Green to ask if he had been contacted about this show. He told me he had, but said he didn’t have enough time to do all this stuff and wasn’t interested. In fact, he said, ‘It’s much more suited to you.’ I think the truth of the matter (and Philip may agree) was that he didn’t have much experience in front of a camera. On top of that he was very busy building his booming business and wasn’t prepared to allocate any time to the programme.
*
Eventually, I met with Peter Moore, a very slight man about my height with flowing silvery-grey hair, and Daisy Goodwin, who appeared to be his boss at Talkback Thames, for a drink at the Dorchester Hotel. It was the first time they had seen me face to face and after a few niceties, I launched into, ‘I’ve seen this programme in the USA and, quite frankly, I could carry off Trump’s role with my eyes closed. I know you don’t know me from Adam, but it’s a shame you weren’t a fly on the wall at some of my board meetings at Amstrad – if you had been, you’d know you need look no further for the right man.’
Peter was really onside because, as a Spurs supporter, he had followed me and seen my so-called brash approach in TV interviews. However, Daisy didn’t know me at all and said, ‘Well, Alan, as you may know, we’re looking at some other options, but it’s been very nice meeting you.’
I’d gleaned from the meeting that the controller of entertainment commissioning at BBC2 at the time was Jane Lush. From what I understood, she was pushing hard for Philip Green (though no one ever admitted that afterwards). Peter had kind of hinted that to me and told me he was going into bat on my behalf.
‘As far as I’m concerned, Sir A [that’s what he always called me], you’re my man. I can see your enthusiasm and you’re not afraid to speak your mind. That’s what this show will need.’
He set up a meeting for me with Jane Lush and Roly Keating, controller of BBC2. Again it was at the Dorchester Hotel, on the same night I attended a charity function there. Peter and Daisy also turned up. What I didn’t realise at the time was that they were pitching me to the BBC. It obviously worked because a day later Peter told me he was going to make a certain Mr Stelios very upset by telling him he hadn’t been chosen.
I was at my house in Spain at the time and suggested his team fly out there, as they needed to start the production planning. We could have a relaxing day discussing the details. Nick Hewer was staying with me at the time and, as he had been so involved in arranging all this, I thought it’d be a good idea if he was also at the meeting.
One of the first things they asked me was who I wanted for my two lieutenants. These two advisers would be tracking the teams of candidates throughout the tasks and would then report their findings to me. In Trump’s programme, he had one of his trusted long-term male employees on one side and a woman on the other. I hadn’t really thought about who I would have at my side until that moment. I felt it was important, from a credibility point of view, that they were people who had worked with me for a long time and knew how I thought.
Peter said, ‘How about Nick Hewer, Sir A? He seems to know you very well. He’s been around you for twenty-odd years. He seems the perfect person.’ Tanya Shaw, the number two producer of the show, agreed immediately that Nick would be ideal.
‘Bloody good idea!’ I said. ‘Nick, you’ll be great, you know everything about me.’
Nick’s initial reaction was one of shock. ‘No, not me, I’m a PR consultant. No, you’ll have to find someone from the business world.’
‘Nick, you don’t need to know all the ins and outs of business,’ I said. ‘Plus, you’re selling yourself short – you say you don’t know, but you do. How many deals have you been involved in with me, burning the midnight oil? It’s a great idea – you are my number one choice.’
I had to think of a lady to assist me and Margaret Mountford came to mind immediately. She’d been there through most of my deals; she’d helped me float the company back in 1980 and she was now a member of the board at Amstrad. However, she wasn’t the type of person you’d expect to participate in a TV programme, so I parked the idea. I told the people I had someone in mind, whom Nick knew, but I needed to talk to her to see if she’d be prepared to do it.
I told Talkback I was so eager to go ahead with this, I would do it for no fee at all. However, if my two advisers were to give up twelve weeks of their time running around doing this programme, they would have to be paid. It was the first time I’d seen how money played a big part in the production of television programmes. Perhaps the BBC weren’t so stupid – they’d effectively sub-contracted the making of the programme to a production company for a fixed fee. The production company had to stick strictly to the specification of the programme and deliver, in this case, twelve first-class, one-hour programmes. Clearly they needed strict financial controls to achieve the deal they’d struck with the BBC. When I mentioned that Nick required a fee, Talk-back started to get a bit hot under the collar. I think they misread my offer of participating free of charge as desperation and assumed I would provide two free advisers as well!
I saw them hesitating and it occurred to me that I’d better pour on another bit of bad news: if they required any of my premises or staff, or the use of any of my cars or planes or anything like that, they should not expect to get them for free either.
I wouldn’t say it was a heated debate, but it was certainly a serious one. I needed to put my stake in the ground to show them I wasn’t just a telly wannabe, prepared to do anything for them. Sometimes these TV people assume that if someone who’s relatively unknown is given the opportunity of being on TV, they’ll stop at nothing to get on the box.
It transpired that the BBC, due to some rule or other, insisted I had to have a fee, so a figure they’d expect to pay for comparable hosts was put in my contract. I donated the fee to Great Ormond Street Hospital.
Once these boring matters of contracts and money were out of the way, things really started to get exciting. We now had to discuss the tasks we would be setting the candidates. A lot of debate went on to come up with twelve ideas. I have to say that the production team actually listened to my ideas. I had learned – in footba
ll, for example – that you don’t share your ideas with people who are supposed to be experts, like managers, as they don’t welcome it. It’s the old ‘not invented here’ syndrome. But here were a bunch of people that took me into the fold and were grateful for my input.
With the benefit of my business expertise (and I’m sure Talkback would agree), I pointed out that some of their task ideas didn’t stack up and would be hard to portray on TV. The tasks had to be tailored to the time constraints in which they were to be conducted. I’m not saying that everything I suggested was agreed, certainly not. Some of my ideas probably didn’t make sense to them. But there was a good atmosphere of brainstorming, where everyone’s ideas were thrown into the pot and the best ones were used, whether they were mine or someone else’s. In many cases, somebody come up with the seed of an idea and somebody else went on to enhance it. That’s how it should be.
There was also a lot of discussion about the rules of the tasks, in anticipation of the candidates arguing the toss on what they could and couldn’t do. All this took weeks of to-ing and fro-ing and, to be fair to Talkback, they made me feel part of the team compiling these tasks.
The selection of the candidates, however, was done entirely by Talkback. They placed some advertisements in the national newspapers for people to apply for a business show. Despite the fact that no one had heard of The Apprentice, we had thousands of applicants, many of whom just wanted to be on TV. The BBC insisted that when Talkback selected the candidates, the application process had to be done in a fair and democratic way. The recruitment process had to take place nationwide – in London, Birmingham, Manchester and Glasgow – so as to give the whole of the country a chance. This was part of the BBC’s strict rules and regulations in accordance with their compliance standards.