Richard Desmond in the money with sale of Channel 5
The acquisition will more than triple Viacom’s share to 8.4% from 2.4%
Friday 02 May 2014
The media mogul Richard Desmond was last night celebrating as he more than quadrupled his money by selling Channel 5 to America’s Viacom for £450m – less than four years after buying it.
The deal, which sees MTV owner Viacom become the first US company to buy a British public-service broadcaster, marks a stunning return for Mr Desmond – even though it was mooted he wanted £700m initially.
The cigar-smoking mogul, who owns the Daily Express, Daily Star and OK! magazine, confounded the sceptics by revitalising Channel 5, after buying it for £103.5m from European giant RTL in 2010.
Mr Desmond slashed costs, bought the rights to the ratings winner Big Brother, and claimed to have made his money back in three years as the advertising market improved. When Viacom announced the acquisition, it noted that Channel 5 was the “only commercial public-service broadcaster to consistently grow viewership share in recent years”.
Many were surprised when Mr Desmond bought Channel 5 as he had little experience of television, apart from running adult channels. RTL was a broadcasting behemoth whose assets include the X Factor production firm Fremantle yet it had been unable to make a success of Channel 5.
Mr Desmond admitted in a speech last year that he had fretted about buying Channel 5, recalling how he had a banker’s draft for £103.5m drawn up before he completed the acquisition and got every member of his board of directors to pass the cheque around the table. “I asked each person if they thought we should do the deal,” he said.
The 62-year-old has not explained why he has sold Channel 5 and those close to him gave no indication what he might do with the windfall.
Channel 5, whose shows include Neighbours and Ice Road Truckers, has a 6 per cent share of British television viewing. The acquisition will more than triple Viacom’s share to 8.4 per cent from 2.4 per cent.
Viacom already operates MTV, Comedy Central and the children’s channel Nickelodeon. The regulator, Ofcom, is likely to rubber-stamp the acquisition because Viacom is an exisiting British broadcaster.
Viacom’s chief executive, Philippe Dauman, said: “Viacom’s global resources, technology and expertise will help Channel 5 develop even more compelling programming and provide content to consumers. In addition, we will introduce our popular content to new UK audiences.”
Toby Syfret of Enders Analysis said Viacom will need to show it can produce programming that has a mainstream appeal for Britons and it would be “a mistake” to rely on imported shows.
Ofcom rules mean that half of Channel 5’s programming must be original UK productions. It must also air 260 hours of news.
BSkyB already sells Viacom’s television advertising in Britain, but it is understood that the US giant may not hand Channel 5’s ad sales to Sky in the near future.
If Sky does handle Channel 5’s sales, it will have close to 28 per cent of the TV ad market, against 26 per cent for Channel 4 and 44 per cent for ITV.
That “could be more of a threat to Channel 4 than ITV”, according to Liberum Capital, which said: “ITV’s main appeal is the mass-market audience of ITV1, which Five cannot replicate.”
- 1 Jennifer Lawrence scores first UK top 40 single with Hunger Games track 'The Hanging Tree'
- 2 Shia LaBeouf claims he was raped during #IAMSORRY art installation performance
- 4 Scientists predict green energy revolution after incredible new graphene discoveries
Kim Jong-un 'in dire need of allies' within his own government as younger sister appointed to senior role
Black Friday UK: The shops hit by chaos and violence as shopping frenzy sweeps country
Scientists predict green energy revolution after incredible new graphene discoveries
Russell Brand: 'Katy Perry? I don’t know who that is'
Michael Buerk wishes he killed Jimmy Savile when he had the chance - by pushing him overboard a cruise ship
Obama: The only people with the right to object to immigration are Native Americans
Ukip says babies born to immigrants in the UK should be classed as migrants – which would include Nigel Farage’s own children
The young are the new poor: Sharp increase in number of under-25s living in poverty, while over-65s are better off than ever
Ukip mocked after mistaking Westminster Cathedral – for a mosque
Tamir Rice: 12-year-old boy playing with fake gun dies after being shot by Ohio police
David Cameron sets out immigration reforms: We should distrust Ukip and their 'snake-oil of simple solutions'
iJobs Money & Business
Excellent Package: Austen Lloyd: EAST ANGLIA - SENIOR SOLICITOR LEVEL ROLE** -...
£Attractive Package: Citifocus Ltd: Prestigious asset management house seeks a...
£Negotiable: Citifocus Ltd: This is a varied role focusing on the firm's mutua...
£90000 - £140000 per annum + benefits: h2 Recruit Ltd: Are you a high achievin...