Richard Desmond: Channel 5 Has Returned to Profit Ahead of Launch
LONDON -- Less than six months after buying Channel 5, Express Newspapers and OK! Publisher Richard Desmond says the loss-making broadcaster has returned to operating profit ahead of its programming relaunch next month.
The channel, home to Neighbours, CSI, The Hotel Inspector and The Mentalist, has been reporting losses for the last two years and its previous owners, pan-European TV group RTL, wrote down its value by more than half in 2009.
In an interview with Management Today magazine, Desmond said the channel was due to increase ad revenues by £80 million to a total of £350 million by the end of the year based on a strong performance in September, October and November. At the same time it has cut £34 million in costs. It had been losing the equivalent amount annually.
“The station has revenues of £270 million and was losing £34 million. We've taken exactly the same figure, £34 million, of costs out. We've saved £10 million on staff -- some of the directors were heavily paid and getting high bonuses even though it was making a loss,” he told the paper.
Desmond also said that long-running program supply contracts had been reviewed and trimmed.
“We cut £14 million off one program alone -- we said this is the price we're paying and that's it - and £10 million came from cutting general overheads,” the paper reported.
Desmond’s media empire Northern & Shell stunned the media industry here in July, when he emerged as the sole bidder for RTL-owned Channel 5, paying £104 million for the channel that has 6.1% of total adult viewing in the UK and 10.3% of commercial impacts.
A new programming line-up will be unveiled in the New Year.