Channel 5 has been making profit for its new owner Northern & Shell since September according to chief executive officer Richard Desmond.

In his first interview since acquiring the broadcaster, with business magazine Management Today, Desmond revealed C5 began to generate profits just four weeks after he bought it from RTL Group for £104m in late July following his move to strip out costs of £34m.

Savings have been made via staff and programming costs, along with general overheads, as Desmond has battled to return C5 to profitability. A growth in ad revenues have also helped improve the channel’s finances, he added.

“The station has revenues of £270m and was losing £34m. We’ve taken exactly the same figure, £34m, of costs out. We’ve saved £10m on staff - some of the directors were heavily paid and getting high bonuses even though it was making a loss,” said Desmond.

“We cut £14m off one programme alone - we said this is the price we’re paying and that’s it - and £10m came from cutting general overheads. Furthermore we will have increased advertising income by £80m, so our total revenues will be £350m.”

Desmond added one senior exec was running up large expense costs, which have subsequently been curbed. “One of the senior executives - I’d better not say who - employed a cab driver full-time at a cost of £50,000 a year plus Sky subscription and medical insurance,” he said.

C5 has made money for Northern & Shell for the past three months according to Desmond who will be hoping to extend the run of profitability into 2011.   

‘It’s lost about [£34m] each year for the last 15 years. It cost RTL £650m in losses and over £1bn in total because RTL bought out the minority shareholders, United (News & Media) and Pearson,” said Desmond. “We bought it at the end of July. Through September, October and into November we’re already making an operating profit.”

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