“I’ve got so much money it’s ridiculous” claimed Richard “Dirty” Desmond in a June 2010 interview with the Independent. But has he? Hardly had Rupe’s downmarket troops launched the Super Soaraway Sunday Steamer than Des was demanding cost cutting measures across the Express and Daily Star titles that will see around 70 redundancies in an already threadbare workforce.
Abandon hope all ye who enter here
Desmond has got himself into a price war with Murdoch, and while he may claim to have money coming out of his ears, the speed with which the cuts were announced suggests otherwise. But here we face a problem: Northern and Shell, Desmond’s holding company, is owned privately by him, although we do know that he did not buy the Express titles out of petty cash.
Back in 2004, when Des made his now legendary goose-stepping tirade against Telegraph executives, there were brief concerns about his relationship with German lender Commerzbank, which had provided him with around £125 million to fund the purchase of Express Newspapers. At the time, this facility was said to be “on a revolving credit line”, which meant it was being rolled over.
So how long was it rolled over for? And was any loan facility involved in the Desmond purchase of Channel 5, for which he paid then owners RTL in excess of £100 million? Des may be worth an estimated £950 million, but if he isn’t pumping it into the business, and instead relying on rolling over one or more loans (which can be offset against tax) then it doesn’t figure.
The continuing presence of loans taken out to finance acquisitions, and subsequently rolled over, along with the Express and Daily Star titles having been run on a shoestring for several years – there have been two previous rounds of staff cuts in which most of the sub-editors were sent down the road – would mean that the titles could not survive a drawn-out price war.
Reinforcing that thought is the suggestion that Desmond’s Health Lottery – promoted heavily in his papers – is subsidising the newspapers, as its poor performance is one reason cited for the cuts. Add to that the motion passed by the Express Newspapers NUJ Chapel – his own hacks – asserting that Des cannot be called a “responsible publisher”. And that judgment bears citing in full.
“Richard Desmond presented himself to a Commons Select Committee as a responsible publisher but we deny that he can be any such thing when he is prepared to run four profitable national newspapers down to a point where they will no longer present value for the reader”.
Running four newspapers into the ground while sitting on a billion quid of lovely lolly? That’ll be another Benchmark Of Excellence.