Yahoo Finance Branson's knee-in-the-groin showdown with BA's Walsh on hold
The most anticipated knee in the groin in modern business history appears to have been dodged after Sir Richard Branson and Willie Walsh both claimed to have won a bet placed five years ago over Virgin Atlantic’s future.
Disappointingly for aviation industry observers, a rendezvous to settle a spat that developed across two continents in 2012 appears to be off.
At the time, Walsh – the chief executive of British Airways’ parent company, International Airlines Group – made comments suggesting that the Virgin Atlantic brand could disappear after US company Delta bought a 49% stake.
Branson proposed a £1m bet that Virgin would still exist in five years. Walsh said he would accept on the basis he was suggesting Branson would no longer be in control of the airline – and that the stake be modified to a knee in the groin, arguing that £1m would not be a painful loss for the Virgin boss.
While Branson said he would accept the new stakes, it is not clear that he took the bet on Walsh’s terms. On Monday, he declared on his blog that the five years was up and he was the winner. He said: “Although people might be amused to see me give Willie a low blow, I ideally have no wish to do so.
“So to settle this matter once and for all, and in the spirit of Christmas, I suggest he donates £1m to Virgin Atlantic’s team.”
Branson said he would still be prepared to knee Walsh in the groin if the money was not forthcoming.
However, Walsh’s view is that he is the winner, after Branson sold his controlling stake in Virgin Atlantic to Air France-KLM in July this year, a deal that reduces his share in the airline from 51% to 20%.
Walsh said: “When Richard Branson sold out to Delta five years ago, he said he would never give up control. As everyone knows, he no longer owns or controls the business, a reality confirmed by the decision to sell more of his shares to Air France. He’s lost the bet.”
Questioned on whether Walsh would be demanding satisfaction, an IAG spokeswoman declined to comment.
A Virgin spokesperson accused Walsh of “trying to wriggle out”, and said Branson remained technically the winner as the Air France-KLM deal would not complete until next year: “As of today, five years on, we still own and control 51% of Virgin Atlantic, appoint the majority of directors and the chairman of the board.”
The wager, which came after decades of bad blood between Virgin and British Airways, originated when Walsh told reporters on a flight to South Korea in December 2012 that the Delta deal could spell the end of the Virgin brand. Branson then wrote: ”Will BA never learn? Let’s see how much they believe this. Let them put their money where their mouth is … I will pay £1m to their staff if Virgin Atlantic disappears within, say, five years. If not, BA pays our staff £1m.”
Walsh, in Seoul, responded: “If he wants to say he will be owning it in five years’ time in its current form, then that would be an interesting bet to accept.”
Branson replied on his blog that he would be happy to accept.
In the absence of binding arbitration on the matter, it appears both men may emerge with manhood, if not dignity, intact. Branson offered Walsh lunch “once this is over”, a prospect that looks as remote as that knee in the groin.
