Richard Desmond: The demon proprietor of Fleet Street
Richard Desmond swears his 'Express' can beat the 'Mail'. In fact, he's always swearing - about Dacre, Blair, Hollick, even his new offices. The only thing he doesn't curse is the Â£46.2m he pocketed last year, says Raymond Snoddy
Monday 25 October 2004
Richard Desmond, the owner of the
Daily Express, has finally set up camp in the largest chairman's office you have ever seen in his spectacular new headquarters overlooking the Thames in London.
Richard Desmond, the owner of the Daily Express, has finally set up camp in the largest chairman's office you have ever seen in his spectacular new headquarters overlooking the Thames in London.
The vast waiting area is as big as a tennis court, and at the moment - apart from a few seats - it contains only a potted plant and, in the corner, a bronze head of the England football manager Sven Goran Eriksson, complete with his trademark specs.
But even this expanse does not prepare the visitor for the full impact of Desmond's new office on the 10th floor of the former headquarters of HSBC in the City. First, there is the 180-degree view of the Thames. If the proprietor takes a stroll to the left of the door, past the cream sofas and a meeting table, he'll enjoy a fine view of the towers of Canary Wharf. Or he can take a constitutional in the opposite direction and, passing an enormous television set and his famous drum kit, he'll arrive at his desk, positioned in a corner and with a splendid vista towards Westminster. "I thought, 'Shall I make it half the size?' and then I thought, 'Fuck it,'" the press baron says, by way of explaining his choice of office design.
He has come a long way since launching music magazines and then boosting his fortunes with adult magazines - or, as his detractors would have it, pornography. And the new headquarters, Desmond observes, has another distinctive advantage over the old Express building on the southern approach to Blackfriars Bridge. "No Hollick," he says pointedly.
Four years ago next month, Desmond came, apparently from nowhere, to spend £125m buying Express Newspapers from what is now United Business Media, run by the Labour peer Lord Hollick. Desmond moved into the Express building, but had to rent his office-space from the former Express owner. He absolutely hated being a tenant, certainly a tenant of Lord Hollick.
"For four years, he [Hollick] has made life as unpleasant as possible for me, my customers, my staff, my suppliers," says the Daily Express owner, who had often remarked, with exasperation, that the only lift that worked in the old building was the one to the peer's office. In turn, Lord Hollick famously put his lawyers in when Desmond didn't pay his bills
And then - and here Desmond can scarcely contain his glee - Lord Hollick gave him two years' notice. The development coincided with a collapse in the property market, and Desmond was able to buy one of the most dramatic riverside buildings in London for less than £40m.
Now he has the choice of 12 lifts to swoop him upwards, each glass-sided, which is convenient for waving at the three attractive receptionists in the lobby as he rises. The receptionists sit under a portentous sign that proclaims 10 Lower Thames Street to be The Northern & Shell Building. Northern & Shell Network is Desmond's main corporate vehicle, and he owns all of it. The Latin motto reads "Forti Nihil Difficile" - nothing is difficult for the brave man.
"We devote our lives to this group. This is our hobby. This is our reason to get up in the morning. This is our living, our egos, our everything. This is what we do," says Desmond, the matter-of-fact businessman suddenly turning unexpectedly grandiose.
The 200,000sq ft building has 60,000sq ft more space than he needs at the moment, but Desmond says he may not let out the surplus. "I quite like the idea of having a bit of space. If I let it out I'd only be aggravated."
For Desmond, the past two weeks has been like "a living dream". Not only has he - along with the staff of the Daily Express, the Daily Star and OK! magazine - moved into his new headquarters after a £20m refurbishment, but he has been giving celebrity performances as a drummer, with Roger Daltrey of The Who, raising more than £1m for disabled children and young people with cancer.
He's also just published the N&S report and accounts for last year, and it is a truly remarkable document. At first glance, things seem a little bleak. The company made a group operating loss of £379,000 last year on turnover of £421.3m, compared with a previous profit of more than £7m. The loss, however, only occurs after "the chairman's emoluments and pension contributions" have been taken out. These total no less than £46.2m, made up of emoluments of £15.1m - pay, bonuses and benefits - and a £31.1m payment into a money-purchase pension scheme.
"It's never wrong to take cash if it's there," Desmond explains. Over the past five years, he has put his beliefs into practice and received total remuneration of £85m. During the same period, the turnover of the business has risen from £51.9m to £421m.
By any account, it has been a remarkable four years for Richard Desmond. "I think we rescued the Express. No doubt about that. In the year 2001, it was budgeted to lose £21m, which is why he [Lord Hollick] got rid of it so quick."
Sales of the Daily Express are pretty much where they were when Desmond took over - at just below the one million mark - but the chairman insists that they are now better-quality sales, through the reduction in free or bulk deals.
Last month, the Daily Express had an average circulation of 960,320, down slightly, by 390 copies, on August. Year on year, the figures were considerably worse: the fall was 5.6 per cent, from 1,017,491, according to the official circulation figures.
Desmond's great rival, the Daily Mail, fared better. The Mail's circulation rose by 1.49 per cent over the difficult summer month of August, to 2.44 million. But a comparison with September 2003 shows that Daily Mail sales fell by 1.53 per cent from 2.48 million.
It looks as if Desmond, despite stabilising the Daily Express and doubling the circulation of the Star, is not moving much closer to his oft-stated goal of overtaking Viscount Rothermere and the Daily Mail. "We are stable, and we are making money and we have got no debt. If I wanted to increase the sale - if I wanted to do a Rothermere and piss away a billion of other people's money - I could do that. Easy. I could double the sales," Desmond says.
There has been a simmering row between the chairmen of the Daily Mail and the Daily Express for the past four years, which from time to time erupts into public slanging matches as rival sets of journalists are dispatched to investigate the pasts of their rival chairmen. Allegations of anti-Semitism from Desmond have added an edge of bitterness to what would otherwise be a routine commercial rivalry between the UK's two mid-market national newspapers, scrapping for the loyalty of every reader with everything from free CDs to free crockery in their arsenals.
Recently, Lord Rothermere stated that there was no truce between the two sides, and added that under a strict application of old takeover rules, Desmond might not have been allowed to buy the Express. It was a coded reference to Desmond's role as publisher of magazines such as Big Ones and Asian Babes - magazines that have now been sold.
At the moment, he is aggravated about Daily Mail coverage of his drumming activities for charity. "Those bastards; snide, snide remarks," says Desmond, who notes that the rival paper had made a point of saying that one of the performances had been at a kosher dinner. "It was another anti-Semitic jibe," says Desmond - although the dinner was, indeed, kosher.
He pauses to find the right word to describe the man he believes is responsible - Paul Dacre, the editor-in-chief of the Daily Mail. "Thug" is what he eventually comes up with, before asking of Dacre's boss, Lord Rothermere: "Would you appoint him to be chairman of a publicly quoted company?"
Another reason Desmond feels so bitter is that he believes that both Lord Black, the former chairman of The Daily Telegraph, and Lord Rothermere tried to persuade the banks not to lend him the money to buy the Express. He says a pal at the Bank of Scotland told him it was so. Instead, he was able to borrow the money from Commerzbank and do the deal within four weeks.
In an interview last year, Desmond had said he did not want to sound like Jesus, but he felt that knocking the Mail off its perch was what he was born to do, and that if he couldn't manage it, the sacred trust would be handed on to his son Robert.
He's clearly feeling more optimistic at the moment, and believes that he can finish the job himself at some unspecified time in the future. "I think I'm his [Rothermere's] worst nightmare. I won't rest until he is out. Gone," says Desmond.
But how will he actually do that? "There will be a time - and you don't have to be a mathematician to work it out - when it's just a matter of volume. When we decide to go for volume, then that's their end. You give the paper away for a penny and put a £5 note on the front," he says.
"It's been on my mind for years, every day. When can I put £5 notes on the front page and give it [the Express] away for 10p? I'm a drummer. I'll do it when I feel the beat is there." Later - lest anyone should think he actually would pin £5 notes to the front of the Express - Desmond concedes that this is a metaphor for heavyweight promotion and deep cover-price cuts.
It is impossible to know whether the careful publisher who likes value for money in everything will ever feel the beat is right to do such a thing. He insists, however, that his long-delayed London evening newspaper - designed to take on Lord Rothermere's Evening Standard - will indeed go ahead. The desks are there for the journalists and a number of senior executives are still retained for the project.
The Office of Fair Trading has been looking into a Desmond complaint that the Standard's exclusive access to London's railway stations represents an anti-competitive practice. Given a favourable ruling ensuring distribution, Desmond says, he could launch his paper within months.
He is contemptuous of rumours that Rothermere might counter-attack by distributing the Standard for free, at least during the initial period of the Desmond launch. "I'd like that. It will cost them £40m. That would give me huge pleasure - and then they'd lose another £20m in advertising."
Desmond is also involved at the moment in plans to modernise printing at West Ferry Printers, the 50-50 joint venture between the Express and the Telegraph group now owned by Sir David and Sir Frederick Barclay.
There will be nothing on the scale of Rupert Murdoch's plan to spend £600m on modernising the printing operations of his News International titles, including The Sun and the News of the World. "I'm not sure delivery of newspapers in the next 10 years will be the same. It must go more electronic. So do you really want to be investing in machinery that goes faster when the chances are that you are going to be selling less?"
The Daily Express owner calls for some water. He has some already, but it was at another end of his office, too far away to be noticed.
Sitting atop his new headquarters - the boardroom is equally enormous, with 20 chairs around a huge, elliptical, table - it would be hard to argue that Desmond has not been successful. His father was the managing director of the cinema advertising company Pearl & Dean, and Desmond started work selling advertising for trade publications such as Meat Trades Journal and Catering Times. In one of the chance encounters that have punctuated his career, he met someone who was planning to publish a magazine about The Beatles, and he was up and running. Then, in 1982, he met someone else who offered him the chance to publish Penthouse in the UK. That was the start of his involvement with "glamour" publishing. Since then controversy - and abuse - have never been far behind him.
Now, with the adult magazines sold at last (nearly four years after he promised to get rid of them), Desmond has headed further into the mainstream. He has not, however, sold his subscription-based Fantasy television network,, and sexual-contact ads still appear in the Star.
As we talk, he becomes more excited, more animated and more profane - and the volume, range and frequency of obscenities increase as the conversation goes on. Why did the Daily Express, which had been supporting Tony Blair and New Labour when Lord Hollick controlled the business, do a sudden flip-flop in favour of Michael Howard's Conservatives? "I told Blair in summer last year in a meeting. I was very forthright. I was really sweating. I was saying, 'Look, I'm holding it together, but there's going to come a time and there are these issues,'" he recalls. Those issues range from asylum-seekers and pensions to "criminal taxation" - not to mention crime and the euro.
Desmond insists that the change of politics came from the Express editor Peter Hill, who in turn was responding to his readers. "It was not an initiative that came from me. I am not political. The readers hate him [Blair]. It's not that they have turned against him, they fucking hate him," says Desmond who, as a publisher, clearly believes that he has to give his readers and advertisers what they want. He insists that he still admires Tony Blair as a statesman, but adds that "that bloody Brown" just wants to take all our money.
After a pause, it's time for another flight of fancy, if not fantasy. "I shall be like Berlusconi [Silvio, the media magnate and prime minister of Italy], and I think the country needs me. Get rid of the humps in the roads, get rid of speed cameras, put prisoners on islands, shoot people who kill or rape people. I reckon I'd get in," says Desmond, clearly having a laugh.
"The problem is, no one fucking believes them [politicians]. Any of them." Still, Desmond believes Blair is likely to win a third term because "all the other bands are so bad".
What does he think now that the dust has settled on an earlier flight of fancy - his Nazi performance at a board meeting at West Ferry Printers, at a time when the German publisher Axel Springer was seen as a strong candidate to buy the Telegraph?
"I think it went completely to plan, don't you?" says Desmond, who complains that he had four years of aggravation from Telegraph executives, whom he describes as "old Etonian, anti-Semitic, fucking wankers". He believes it is quite likely that Lord Black could go to jail, and that his former Hollinger associate Dan Colson could be fined.
"I wasn't opposed to a German company buying the Telegraph. I was having a laugh at their misfortunes. Their boss was going to jail, another fined, and here was an anti-Europe paper being taken over by Germans. What a laugh," Desmond says. As for the detail of the episode, he admits to goose-stepping and raising a finger in the Basil Fawlty manner to make a Hitler moustache, but denies singing the German national anthem.
Desmond has been talking with great exuberance, but now he suddenly turns maudlin. "We'll all be dead soon. We'll all be eaten by worms." It's something that happens even to newspaper proprietors.
But until then, Desmond will go on and on, having fun, doing "more of that, and more of that, more of that, more of it, more of it". The latest example is the Express shopping channel, which was launched last week on Sky. Next up will be a glossy shopping magazine called B Happy.
Despite the move across the river to Lower Thames Street, some things never change.
At precisely 5pm, his amiable butler Chris enters the enormous new office bearing the customary banana. It is a solitary one, and apples have to be rustled up for Desmond's guests.
But there has been one variation in the twice-daily tradition of the Desmond banana. The fruit now arrives on an ordinary plate. Richard Desmond has decided that the silver salver on which the banana used to arrive is just a bit over the top.
LIFE AND TIMES: THE MEDIA BARON
Born in Finchley, north London, in 1951, Richard Clive Desmond left school at 16 and took a job in advertising. But his first love was music, specifically drumming for a progressive rock band. A year later he combined the two roles to become group advertisement manager for music magazine company Beat Publications Ltd. Nearly 40 years later, Desmond performed at Ronnie Scott's jazz club with Roger Daltrey and Pete Townshend of The Who, and he keeps a drum kit in his office.
By the age of 21 he had his own house and two record shops. He established himself as chairman of Northern & Shell publishers and produces the magazine International Musician and Recording World in 1974, which was thought at the time to be a unique general music consumer magazine. During the next 15 years, it grew to separate editions for the US, Europe, Australia and Japan. Desmond later expanded his Northern & Shell empire into diverse areas of publishing, including fitness, cooking environment and business.
THE 'GLAMOUR' PURVEYOR
Desmond was offered the chance to publish Penthouse magazine in the UK in 1982 and this proved to be the start of a long involvement in "glamour publishing", with a roster of titles that grew to include Asian Babes and Readers' Wives. Although he eventually bowed to pressure to sell these soft-porn magazines in order to pursue his interests in national newspapers, he has retained ownership of the market-leading glamour television network Fantasy Channel.
He got his hands on one of Britain's most famous newspaper groups in 2000, when he persuaded Lord Clive Hollick and United Business Media to part with Express Newspapers in a deal worth £125m. He has since been involved in a personal vendetta with the rival Daily Mail and the Rothermere family which owns it. The circulation of the flagship Daily Express remains below one million, although Desmond maintains that he has "rescued" the title.
With a personal fortune estimated at £550m and with a publishing stable of four national newspapers and a portfolio of magazines that is continually being added to, Desmond wields considerable influence and power. He donated £100,000 to the Labour Party, shortly after the Government approved his take-over of the Express group. The Daily Express, traditionally a Conservative supporter, has switched to Labour and then back again under Desmond's ownership.
Desmond is Britain's most eccentric press baron. He demands that a banana is brought to him on a platter twice a day in his office. He once ordered a female executive who was late for a meeting to stand in a cupboard (she refused and resigned). And during a meeting with Telegraph executives over the future of the West Ferry printing plant, he goose-stepped around the room with his finger pressed to his upper lip before unleashing a tirade of abuse about the Telegraph's possible sale to German owners.
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