AN invitation to tea with Britain’s wealthiest media owner — who could refuse? It comes with an e-mailed promise to fill me in on the success of OK magazine, 10 years old as a British weekly and expanding globally. “I’m sure you will be pleased with what I give you,” writes Richard Desmond. “If not, don’t come again.”
The joke is pure Desmond, part greeting, part box on the ears, getting his retaliation in first. As owner of the Daily and Sunday Express, Daily and Sunday Star, he has already cemented his reputation as an aggressive man-manager who made his first fortune publishing top-shelf magazines — a business he has sold — and is busy making his second fortune with newspapers and OK.
And what a fortune. His rapidly rising wealth, estimated at £1.9 billion in this weekend’s Sunday Times Rich List, will surprise many. Desmond, 54, is better known in newspaper-land as a ferocious cost-cutter and frugal investor in journalism. He does, however, pay himself well: £1m a week since 2004.
And Northern & Shell, his media group, is worth a lot now, even if outsiders are not sure which of the titles make money, and which don’t. On the other hand, his adult television channels — he retained those — are definitely cash-cows.
“Oh stop it,” he says sharply, when I bring it up. “You’re obsessed with money. We’re a private company. I make a million a week and everyone gets paid.”
So, by inference, he can do what he likes — and these days that includes pushing money into hedge funds, and giving large sums away at whim.
And right now, he is being extraordinarily nice to me: escorting me to a seat, pouring me a drink, offering me the name of his osteopath for my bad back. We are sitting alone in his vast James Bond-style penthouse atop N&S’s riverside head office in the City. Wind buffets the glass walls, doubling the feeling of other-worldly oddity inside.
Desmond, softly solicitous, is enjoying my sense of surprise. “This isn’t work, it’s fun,” he says with a friendly wink, gesturing around. “I never wanted to make a fortune, I just wanted to be a success.” In fact, he says, right from his earliest days as a blues-band drummer and ad salesman, his real ambition was to have the biggest music magazine in the world. Things simply got out of hand.
He chuckles. Medium-height, burly, bespectacled, with thick-set features and a Desperate Dan chin, Desmond is really a tightly wound coil of determination and drive. Using his gravelly, north London accent with occasional profanity, he can intimidate by force of personality alone. “I do have a reputation for going berserk,” he says, with a grin. But reputations can be exaggerated.
And Desmond, it seems, is keen to change his. In the past year he has dropped his PR man and started dealing with press enquiries himself. He has also become an increasingly generous donor to charity: £2m to Moorfields eye hospital, a new operating theatre for the Evelina children’s hospital, £1m to the Nigeria aid fund — everything from cancer and disability charities to Tower Hamlets Women’s Aid.
Next month he is even playing drums in a charity rock gig with Roger Daltrey and Greg Lake to raise another £1m for Evelina’s. Is Desmond, who had a health scare with glaucoma last year, beginning to mellow? “I hope not,” he says, looking offended. He points out that he has always given. His godfather Dickie Pearl — founder of Pearl & Dean advertising, where Desmond’s father was managing director — helped start the Variety Club. It’s in his upbringing.
But others detect the influence of his new friend Philip Green, boss of BHS — taking money out of the business, giving some away, dealing one-to-one with the press.
“Yeah, Philip’s taught me a lot,” says Desmond. “He really likes making money, and I learnt from him that you shouldn’t hold grudges. I used to get all hung up on that bloke said this, and another bloke said that...”
Green says he just told Desmond to calm down and enjoy himself, and play a cleverer game. “People who are owner-managers have an intensity and passion that is sometimes interpreted differently,” says Green. “When you own your own universe, you are used to saying what you like.” And that can make you enemies.
Now the new Desmond has to turn the other cheek. When I ask him if he is running down Express Newspapers, stripping out the money to pay himself that bumper salary and underwrite OK magazine’s expansion, his brown eyes narrow.
“Running it down?” he mock-shouts, standing over me. “My friend, I might give you a punch in the...” He catches himself, and smiles. Only joking.
“Express Newspapers has never been in better shape,” he continues. “Let’s get this straight. In 2000 the Daily Star was selling 500,000, now it’s close to 900,000, right? Who else has doubled sales in the last five years? The Sunday Star is the only successful launch in the past 30 years. It sells 500,000, pretty good, eh? More than the Observer or Telegraph at full rate.
“And the Daily Express — I’ve taken out the bulks, stopped the CDs and DVDs, used price cutting to get sampling, it’s the only paper that is up.”
Others would dispute that, but even bitter rivals acknowledge that Desmond buys well and manages costs effectively. He bought Express Newspapers for £125m in 2000. He walked away from the Telegraph group in 2004 — he still thinks the Barclay brothers paid too much at £665m.
And he says that N&S, including the Express titles, made £85m profit in 2005. On a price/earnings ratio of 16.5 (comparable with quoted media groups) it could be worth £1.4 billion. Add in his property interests and huge pension invested in hedge funds — “Hermitage Fund, up 100%, Atlas Fund, up 80%, it’s all mad” — and you can see why he is looking happy.
But isn’t OK’s launch in America last year soaking up huge amounts of cash? “Nah, it’s great fun,” he says. “OK in England cost me £30m before it made any money. I’ve put aside $100m (£56m) for America. We’ve lost $25m so far, but we’re selling 600,000 copies a week. It could break even by the end of the year.”
But isn’t he looking for more British newspapers? Not really, he says. He wanted to start a London freesheet, but the authorities are taking too long to sort out who will be allowed to launch.
So why is he taking so much out of N&S right now? He doesn’t answer that one. Insecurity, maybe. As a child, Desmond, the youngest of three siblings, witnessed his father go deaf and lose all the family money through gambling. His parents divorced and Desmond left school at 15, working nights as a cloakroom boy at a blues club, and selling space on newspapers during the day.
But the sense that everything could be lost stuck with him for decades. “I used to worry about it,” he says, “but the cash I’ve got outside now...”
The same insecurities fuel his temper, which friends acknowledge has hampered deal-making in the past. Desmond has a sharp memory and a quick feel for business, but he is sometimes surprisingly inarticulate, and substitutes rage for reasoned argument.
Keith Harris, chairman of Seymour Pierce bank and a long-time adviser, says it masks the fact that he is an accomplished entrepreneur. “As his businesses have grown, he has always maintained the vision, while keeping an eye on the detail.”
But there’s clearly a conflict between wanting recognition and hating compromise. Desmond dislikes, for instance, being described as a pornographer — it’s not right, he says. “There’s no difference between Nuts and Zoo now and the magazines we produced. They’re all sold through WH Smith.”
But if he is sensitive, why retain the adult TV channels? He glowers. “Because I am not going to let BSkyB or Telewest or NTL or the BBC or anyone else have the total adult business.”
Other critics of Desmond, though, leave barely a dent. Tom Bower’s promised book on the Express owner, Rough Trader, due last November, never appeared. Neither Bower, his agent, nor his publisher would tell me why last week. Desmond says Bower obviously didn’t find anything interesting enough. “I’m rather dull really.”
And Private Eye, which tags him “Dirty Des” and has run more than 250 stories about him since 2000 — many recounting his business’s alleged run-in with the American mafia in New York in the early 1990s — just tickles him. “Fantastic,” he says. “People don’t understand the irony and fun of Private Eye. Much better to be talked about than not.”
Well, nobody can accuse him of lacking humour. From the staged entry of his butler with a banana — he eats two a day on doctor’s orders — to his gibing at rivals, he loves to joke, usually at others’ expense.
He calls Lord Rothermere, the Daily Mail chairman who inherited the job from his father, a “lucky sperm”.
But if Rothermere is a “lucky sperm”, then what of Desmond’s own son, who he says will one day take over N&S? “Well, he’s a lucky sperm, too, isn’t he?” What will he leave him? “The world’s greatest media empire, of course,” laughs Desmond.
As to the wealth he is amassing, he is not sure if he likes it or not. “Bloody rich lists — you don’t want to be overdone, but you don’t want to be a pauper either,” he moans. He took an American business magazine to task recently for undervaluing him. It’s about respect, I would guess.
“Oh, it’s been good fun talking about this load of old rubbish,” he says, walking me down to N&S’s reception. Later he sends me another e-mail asking if I would like to work for him.
Crikey, he doesn’t mess about. As Philip Green puts it later: “It’s about getting from A to B by the quickest possible route. Some people it will appeal to. Some it won’t.” The rest of us just try to keep up.
Richard Desmond's working day
THE Daily Express proprietor wakes at 6am in his north London home and has a grapefruit and tea for breakfast. Richard Desmond is then driven to his gym in the City. “I read the Express and Star on the way, then the others to see what they’ve nicked from us.” He works out for an hour or so, and is at his desk in Northern & Shell by 9.20.
“I focus on everything. I’m not really a deal person, more of a creative sales manager. I like to talk to everyone on a regular basis.”
Guests are brought up to his suite by his burly, shaven-headed driver. “Did that intimidate you?” says Desmond. “He’s not a bodyguard, but it’s probably good you think he is.”
Desmond lunches in the office and works until 9pm. He will often dine at Wiltons on the way home.
Vital statistics
Born: December 8, 1951
Marital status: married, with one son
School: Christ’s College, Finchley, north London
First job: cloakroom attendant at a blues club
Salary: £52m
Homes: Hampstead, north London, and Majorca
Car: blue Rolls-Royce Phantom
Favourite author: Tom Bower
Favourite music: John Mayall’s Bluesbreakers and all former members
Favourite film: The Lavender Hill Mob
Favourite gadget: Ludwig Vistalite bass drum pedal
Last holiday: Mauritius
Downtime
RICHARD DESMOND says his favourite pastime outside work is visiting newsagents. “I bike round at weekends, most know me — I’ve been going round for a long time.” Recently he has been persuading newsagents in New York to stock OK magazine. “What more fun can you have, riding round the newsagents of the world?” At weekends, he will drum for a couple of hours, or run on Hampstead Heath. He has luxury cars — a Rolls-Royce and Ferrari — but says he prefers driving his Vauxhall Omega.
He enjoys giving money to charity, too, so long as people say thank you. When he didn’t receive a thank-you letter from an African aid charity, he rang up the chairman.
“I asked him, do you get many donations of £1m? No.
Then I told him in a clear, concise manner that it would have been nice to get a thank you.”
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