Sony Considered Buying UK’s Channel 5, Called Owner “Worst Human Being On Earth”

In January 2014, Barclays approached Sony executives with the idea of buying British commercial television station Channel 5, owned by Richard Desmond. He is also the owner of newspapers Daily Star and Daily Express, magazines OK! and New!, and adult TV stations Television X and Red Hot TV. He is, certainly, a controversial figure.

According to Wikileaks, Sony received an NDA to sign under the codename “Project Eden”.

Sony executive Jon Fukunaga told fellow exec Leah Weil,

FYI.  This one would be a big deal if it goes.  Channel 5 is the UK broadcaster that Richard Desmond bought from RTL in about 3 years ago.

Weil replied,

Didn’t we look at it once before? And/or have an issue with desmond?

Are you thinking of staffing out of UK or here or combo?

To Fukunaga’s response

I don’t think we’ve looked at Five before.  We had some concerns about Desmond—Michael was concerned that after Desmond took over, he might try to renege on our existing deals so we spent a lot of time looking at what our potential remedies might be if that happened.  Problem never materialized.

I think practically, I’d have to staff out of London although it’s big enough that I think I’d need to be involved.  We’d definitely have to get outside counsel and talk to several firms.  Some possibilities are Olswang, Dentons, Clifford Chance, Freshfields, maybe Paul Weiss (David Lakdhir represented Discovery on their Chello bid).  If cost were the only driver, you’d go with Dentons—their rates are much lower and Lisa would help control costs.

Though not everyone fancied the idea. Chris Mansolillo said to Steve Mosko,

Steve, this just came in. Ch5 in the UK is potentially for sale.

It would be a big/strategic acquisition and likely we’d want to evaluate jointly across the SPT portfolio (networks, production, distribution).

Let us know if you think it’s worth pursuing.

Steve Mosko replied:

Good luck. Worst human being on earth.

But Steve was the bigger man. Writing to Michael Lynton,

Are you ok if we kick these tires…I’m  putting my personal feelings aside about him..

And Chris Mansolillo told Steve Mosko,

Our early view on valuation and what we would have to submit in the non-binding EOI is $850 to $900M for 100%.  Ultimately if we were to be successful at 51% ownership we would have to come up with approx $450M in cash assuming we’d find a partner for the remaining 49%.

But it was all for naught, Steve Mosko telling Michael Lynton

Fyi…We’ve dropped chasing channel 5 in the uk…..we can’t handle the deal on our own and we lose all the strategic value if we take on partners..Steve

As of May, Channel 5 was sold to Viacom.

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