Mogul grounded: Richard Desmond gives up his jet deal

Media tycoon's company pays £1m to cancel his order for a £36m private jet after drop in profits

The company owned by media mogul Richard Desmond has paid almost £1m to cancel an order for a £36m private jet in a sign that even tycoons are feeling the economic squeeze.

The owner of Channel 5, the Daily Express, Daily Star and OK! magazine, abandoned plans for the corporate aircraft as newly published accounts for his Northern & Shell group showed annual profits before tax slumped to £5m in 2011, down from £30m a year earlier.

Mr Desmond, known for his blunt language, ordered the company jet in 2008 and had been making staggered payments ahead of delivery in 2017.

But the press baron, who told The Independent two years ago that "I've got so much money it's ridiculous", has now had second thoughts.

The accounts say: "During the year, the Group decided not to take delivery of the aircraft, incurring liquidated damages of $1.5m."

Northern & Shell confirmed that it lost the sum, equivalent to £968,000. A spokesman said: "Given the requirements of the group and in the light of the economic climate, we decided to cancel the order. There was a downpayment, some of which was returned and the rest was not. We sold OK! in America last year and felt it was not the right time to go ahead [with the plane]."

But Northern & Shell did not lose all the money it had paid in advance for the jet as it received $3m back.

The company declined to say what aircraft it had been planning to buy but it said in 2008 that it had ordered a G450 Gulfstream jet, which can fly eight passengers 4,350 nautical miles. At one stage, Mr Desmond was reportedly looking to purchase the superior G650, which can fly even longer distances.

The Daily Express proprietor's decision to buy the private jet came as a surprise because he declared in an interview in 2005 that he didn't like the idea of flying to the Mediterranean for the weekend.

Mr Desmond said at the time: "I like to ride my bike on Sundays. I can't stand all that b*******, Harry's Bar s***. Private jets are b*******. I like to hire one if I need to go somewhere. I piss away £100,000 a year doing that. I enjoy every one pound of it. And I don't need a boat. I have enough mates who have boats. It's all b*******."

The accounts for Northern & Shell, which owns all of Mr Desmond's media businesses, including his adult TV channels and The Health Lottery, showed revenues increased to £713.6m against £524.8m a year earlier, thanks in part to his acquisition of Channel 5. There was no dividend.

The firm's balance sheet was hit by an exceptional charge of £46.6m to cover the liability for an undisclosed potential insurance claim.

Profits after tax fell to £40.3m against £52.5m a year earlier. "The directors feel that the group is well placed to build on its established activities," said the accounts, which said operating profits at Channel 5 had risen sharply while Express Newspapers was "broadly similar" despite "tough trading conditions".

The Sunday Times 2012 Rich List estimated Mr Desmond's wealth at £1bn, up from £950m a year earlier. He hosted a big party to celebrate his 60th birthday last year.

Start your day with The Independent, sign up for daily news emails
Voices
Barn owls are among species that could be affected
charity appeal
News
Sarah Silverman (middle) with sister Reform Rabbi Susan Silverman (right) and sister actress Laura Silverman (left) at Jerusalem's Western Wall for feminist Hanuka candle-lighting ceremony
peopleControversial comedian stages pro-equality Hanukkah lighting during a protest at Jerusalem's Wailing Wall
Arts and Entertainment
The Bach Choir has been crowned the inaugural winner of Sky Arts’ show The Great Culture Quiz
arts + ents140-year-old choir declared winner of Sky Arts' 'The Great Culture Quiz'
Sport
After another poor series in Sri Lanka, Alastair Cook claimed all players go through a lean period
cricketEoin Morgan reportedly to take over ODI captaincy
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Carlton Senior Appointments: Private Banking Manager - Intl Bank - Los Angeles

$200 - $350 per annum: Carlton Senior Appointments: Managing Producer – Office...

Carlton Senior Appointments: San Fran - Investment Advisor – Ind Advisory Firm

$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...

Sheridan Maine: Commercial Finance Manager

Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Sheridan Maine: Regulatory Reporting Accountant

Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Day In a Page

Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Could cannabis oil reverse the effects of cancer?

Could cannabis oil reverse effects of cancer?

As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

The Interview movie review

You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
Serial mania has propelled podcasts into the cultural mainstream

How podcasts became mainstream

People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
Jesus Christ has become an unlikely pin-up for hipster marketing companies

Jesus Christ has become an unlikely pin-up

Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
Rosetta space mission voted most important scientific breakthrough of 2014

A memorable year for science – if not for mice

The most important scientific breakthroughs of 2014
Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

Christmas cocktails to make you merry

Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
5 best activity trackers

Fitness technology: 5 best activity trackers

Up the ante in your regimen and change the habits of a lifetime with this wearable tech
Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

Paul Scholes column

It's a little-known fact, but I have played one of the seven dwarves
Fifa's travelling circus once again steals limelight from real stars

Fifa's travelling circus once again steals limelight from real stars

Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
Frank Warren column: 2014 – boxing is back and winning new fans

Frank Warren: Boxing is back and winning new fans

2014 proves it's now one of sport's biggest hitters again
Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas