July 23 (Bloomberg) -- Bertelsmann AG’s RTL Group SA agreed to sell its U.K. television station Channel 5 to Richard Desmond, owner of the Daily Express newspaper and Television X adult channel, for 125 million euros ($161 million) in cash.
Channel 5, which broadcasts shows such as crime series “CSI” and “Law & Order,” will be sold to Desmond’s Northern & Shell holding company with “immediate effect,” RTL said in a statement today.
“The disposal is in line with RTL Group’s strategy of being number one or two in each of our markets,” said RTL Chief Executive Officer Gerhard Zeiler. “With a significant recovery of the U.K. TV advertising market and Five performing well in the first half of 2010, we saw a window of opportunity.”
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.
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’s Five Group, which runs Channel 5, posted an operating loss of 10 million euros 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.
RTL is a unit of closely-held Bertelsmann AG, Europe’s biggest media company. Bertelsmann owns 91 percent of RTL. RTL said it was advised by JPMorgan Chase & Co on the Channel 5 sale.
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