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Last updated on April 19, 2014 at 9:20 EDT

CORRECTED: UK media mogul bets on US tab magazine

July 25, 2005

Corrects paragraph 9 to read “…talks to sell to a German
newspaper group.”)

By Jeffrey Goldfarb

LONDON (Reuters) – A British media mogul is taking his deep
pockets and controversial brand of celebrity news to the United
States with headline-grabbing gusto.

Richard Desmond, the wealthy one-time adult magazine
publisher known in the tabloids as Dirty Des, said on Monday he
would launch an American version of his weekly star cavalcade
OK! in early August and write a $100 million check to get it
started.

With an initial print run of 1.3 million, OK! will launch
into a crowded field that includes top seller People, published
by Time Warner, Wenner Media’s Us magazine and American Media’s
National Enquirer and Star.

The new wrinkle, though, is that Desmond is prepared to pay
celebrities and give them control over exclusive interviews and
photographs. Britain’s common practice of checkbook journalism
is widely disparaged by U.S. media.

“It could have a big impact,” British publicist Max
Clifford said in a phone interview from the south of Spain,
where he was preparing a photo shoot with his client and
tart-tongued “American Idol” judge Simon Cowell, for the launch
issue.

“Richard knows his market and he’s got the contacts,”
Clifford said. “The only reason Simon’s doing this, for
example, is because Richard’s an old mate and he’s been good to
him over the years.”

As a foreign owner with only one title in the U.S. market,
Desmond’s costs will be high. He’s not one to care, though,
with the UK version of OK! taking six years to be profitable.
It is not known what OK’s U.S. cover price will be or how many
copies need to be sold to recoup the investment.

“I’m not into break-even,” Desmond told Britain’s Sunday
Times. “I’m into being number one.”

Desmond is widely known as an eccentric and outspoken
entrepreneur. A butler reportedly delivers bananas to him on a
silver platter and he infamously goose-stepped around a
boardroom last year with Daily Telegraph executives present to
mock their talks to sell to a German newspaper group.

STEEP HILLS

Whether his unique approach will help him surmount the
steep hills of the U.S. magazine market remains to be seen.
Desmond will have to master a complex distribution network and
grab readers’ attention in supermarket check-out aisles
cluttered with cover photos of Brad Pitt and Angelina Jolie.

“Consumers seemingly have an insatiable appetite for
celebrity magazines, but getting titles onto the newsstands in
enough places to meet that consumer demand is getting more and
more challenging and more and more expensive,” said Peter
Kreisky, chairman of Kreisky Media Consultancy.

Desmond’s company Northern & Shell, which publishes
Britain’s Daily Express and Daily Star tabloid newspapers, said
on Monday it has 106,000 retail pockets — or prime
point-of-purchase sales slots in stores — arranged for its OK!
launch in the United States.

“It’ll be impressive if he manages to achieve that on day
one,” Kreisky said. “There is a human process that has to go on
to get that kind of display.”

There also have been reports that OK! in the United States
has been struggling to find advertisers with some companies
wary about the already saturated market and how American
readers will respond to a magazine that pays for stories.

People’s weekly circulation was about 3.7 million last
year, the National Enquirer’s 1.5 million and Us Weekly’s 1.4
million.

Northern & Shell executives declined to comment, but issued
a statement saying they are happy with their progress.

“We have received the most incredible support in the United
States, not only from the news trade and advertisers, but also
from the many celebrities we have approached,” said Stan
Myerson, Northern & Shell’s managing director.

“All of them tell us they have been awaiting OK! USA, with
its unique style and celebrity friendly format, for a very long
time,” he added.

Desmond is making other arrangements, too, to capitalize on
the OK! brand elsewhere.

Talks are “well advanced,” Northern & Shell said, to
establish the magazine in Germany, South Africa, India, France
and Russia in the next 12 months. (Additional reporting by Paul
Thomasch in New York)