RTL Said to Be in Talks on Selling Channel 5 With Adult TV Owner Desmond

Bertelsmann AG’s RTL Group SA is in talks to sell its U.K. television station Channel 5 to Richard Desmond, owner of the Daily Express newspaper and Television X adult channel, a person with direct knowledge of the talks said.

Channel 5 may be sold for about 100 million pounds ($152 million), the person said, declining to be identified because the discussions are private. A deal has yet to be finalized, the person said. Spokespeople for RTL and Desmond’s Northern & Shell holding company declined to comment.

RTL, Europe’s biggest broadcaster with 45 TV channels and 31 radio stations in 11 countries, repeatedly has said that the U.K. TV market is overcrowded. RTL, based in Luxembourg, last year called for a merger of Channel 5 with Channel Four Television Corp., a publicly owned and commercially funded broadcaster.

RTL’s Five Group, which runs Channel 5, posted an operating loss of 10 million euros ($13 million) for 2009 as sales dropped 30 percent to 303 million euros. Its share of the television advertising market dropped to 8.4 percent from 9.6 percent.

Desmond owns OK! magazine as well as adult television subscription channels through his Northern & Shell holding company. Desmond, who formerly published Penthouse magazine in the U.K., sold his adult magazine titles in 2004.

RTL shares dropped 0.2 percent to 62.95 euros as of 11:06 a.m. The broadcaster is a unit of closely-held Bertelsmann AG, Europe’s biggest media company. Bertelsmann owns 91 percent of RTL.

The talks between Desmond and RTL were earlier reported by Sky News.

To contact the reporter on this story: Ragnhild Kjetland in Frankfurt at rkjetland@bloomberg.net

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