The UK media magnate is reported to be testing the market value of the TV channel he acquired in 2010 and turned from a loss to profit maker.
Richard Desmond/ Getty
Recent speculation that Richard Desmond, owner of the Northern & Shell Group and one of the most powerful men on the UK media scene, is getting ready to part company with Channel 5, the free-to-air TV channel that he has owned for the last three years, have grown stronger than ever.
According to industry observers, Desmond has called upon Barclays Bank to investigate his possible options to where he can sell the television network, which acquired in 2010 for £103.5 million ($150 million). If a potential buyer could be found, they would have to meet Desmond’s anticipated asking price would be no less than £700 million ( $1 billion) , which is equivalent to ten times times the network’s expected earnings before interest and taxation this year.
Turning a profit of $850 million in three years might seem an exaggeration, but in that relatively short space of time Desmond’s inimitable drive and intricate knowledge of the world of UK media has succeeded in turning Channel 5 into one of the first choices on the television channel selection.
Richard Desmond revamped the program schedules on Channel 5, bringing in such high-profile programs as Big Brother among many others. Indication of Desmond’s moneymaking prowess is the £20.6 million ($30 million) that Channel 5 brought in for the first two quarters of 2013, compared with a loss of £16 million ($24 million) for the same period in 2012.
Channel 5’s contract to present the UK version of the highly popular Big Brother reality show, is due to expire at the end of 2015.
Channel 5 is likely to be an attractive prospect for a number of other media presences as it is among the very few free-to-air broadcasting units liable to come on the market anytime soon not only in the UK but throughout Europe. Industry analysts point to the fact that the company wishing to gain a foothold on the popular UK television market would certainly find it on Channel 5.
Among the potential buyer has been muted are Channel 5’s leading rival for the UK domestic audience ITV, who are reported to be on the lookout for expansion while at the same time wiping their leading competitor of the market. Another likely candidate could be Turner Broadcasting, who have been reportedly looking for a foothold in the European market for some time.
The same industry observers who have speculated that Desmond could be interested in moving on Channel 5 also point out that Northern & Shell also reportedly approached Barclays bank to find a buyer for their newspaper business three years ago. Although there was much speculation at the time that a buyout deal was about to go through. in the end, nothing came of it . An outcome that strengthened the feeling that many people have that, then as now, Desmond is merely testing the market.
Richard Desmond is one of the UK’s most active media barons. Apart from Channel 5, Desmond’s Northern & Shell also own the Express Newspapers group which publishes some the UK’s most popular national newspapers such as the Daily Star and Daily Express as well as a number of high volume celebrity magazines.
Desmond’s personal fortune is estimated to be close to one billion pounds sterling ($1.5 billion).
Richard Desmond was born and raised in North London. After his family fell upon difficult financial times, leading to his parent’s divorce, Desmond left school at the age of 15, finding a job selling working in the classified advertisements section, bringing in extra income and finding enjoyment playing drums in a pop band to earn extra money as well as indulging his love and talent for music.
Eventually Richard managed to save enough money to open his own business, a record shop in swinging London which proved to be a great commercial success.
In the mid seventies, while still in his early twenties, Desmond launched his first magazine, International Musician and Recording World. The magazine was aimed towards UK musicians and thanks to his combination of an in-depth knowledge of the music scene as well as the advertising industry, International Musician and Recording World soon became a tremendous success leading to the founding of other music orientated magazines, which were to form the backbone of the Northern & Shell publishing group.