Richard Desmond, owner of the Express newspaper titles and now Channel 5 in the UK, has sold the loss-making American version of his OK celebrity magazine to National Enquirer publisher American Media Inc. (AMI) for a reported $10-15m.
AMI, which came out of bankruptcy last year, also owns the celeb gossip Star magazine and a number of other downmarket titles.
Desmond’s US edition of OK is estimated to have been losing up to $25m a year. The UK edition, which remains in the Desmond Northern & Shell empire, is said to be profitable.
Despite his ability to wring money out of publishing assets including the Daily Express and Daily Star in the UK, Desmond has struggled in the US despite spending a fortune securing distribution for OK.
Hair-raising stories are told of Desmond executives visiting the US and being suspended from meat hooks by irate mobsters, angered by the iconoclastic UK publisher’s unwillingness to play the game their way (or pay the money).
Anyway, it will be a great relief to Desmond to offload US OK, whether or not he ever receives his money from AMI.
Although his publishing empire reported profits this year of £30m, three times those in 2010, this isn’t actually very much for such a sprawling empire. A flick of the accountant’s pen, you might say. Certainly not enough to stand $25m annual losses in the US.
In the meantime Desmond has to make a success of his £100m acquisition of Channel 5, the UK’s smallest UK terrestrial commercial TV station, from German broadcaster RTL.
On the face of it this looked like a brilliant deal but the usual Desmond recipe of draconian cost-cutting allied to tabloid excess might not work so well in TV.
Not so long ago Desmond was boasting that he had £1bn to spare to buy the Sun newspaper from Rupert Murdoch’s News Corporation.
Rupert doesn’t want to sell the Sun of course (although son and heir James Murdoch would bite your hand off for anything close to £1bn for it). But Murdoch senior and News are going through the final stages of getting approval from the UK government to buy the 61 per cent of hugely profitable digital broadcaster BSkyB that they don’t already own.
This is likely to cost News at least £1bn more than the £8bn it’s offered already.
So the door is open for Dessie.