By John Reynolds, mediaweek.co.uk, Wednesday, 15 August 2012 12:21PM
Douglas and Howell have been talking to potential investors about backing the launch of a Sunday tabloid to compete with Rupert Murdoch’s Sun on Sunday.
It is thought that they have struggled to secure enough investment to launch the tabloid, so have approached Desmond about the purchase of the Daily Star Sunday, which is a loss-making paper.
Advisers acting on behalf of Douglas and Howell met with Martin Ellice, managing director of Nothern & Shell, just weeks ago.
It is understood that a meeting between the advisers and Desmond is scheduled to take place in the coming weeks.
Douglas admitted to Media Week that she was talking to Desmond about the possible sale of the Daily Star Sunday, but said other options were on the table.
One well-placed source claimed that Desmond and Douglas are at the contractual stage of negotiations.
But at this stage there is no clear indication if a deal will go ahead.
A source close to Northern and Shell denied a sale of the Daily Star Sunday was likely, saying Desmond continually talks to different parties about his portfolio.
Should Douglas succeed with the bid the Daily Star Sunday would be rebranded as The News on Sunday, the title that Douglas is on record as saying she wants the tabloid to be called.
The possible purchase of the Daily Star Sunday is just one option, said Douglas.
Last month, Trinity Mirror rebuffed a tentative approach for its Sunday tabloid, The People.
Douglas said that a possible deal for the People could still prove an option.
Douglas and Howell are thought to have also approached the Lebedevs about the possible sale of the Independent on Sunday. The Daily Star Sunday – sister title to the Daily Star – reported a circulation of 473,352 in June.. But it has lost sales in recent times. In 2002, it had a circulation of over 700,000.
The Daily Star Sunday has a cover price of 60p, which is going up to 80p this weekend, 19 August.
The title has been hit hard by the launch of Rupert Murdoch’s 50p Sun on Sunday, which has pinched thousands of readers off it.
Douglas’s firm, Phoenix Newspapers Limited, is working with advisers WH Ireland and Dean Street Advisers to work on its funding plans to launch a Sunday tabloid.
Douglas believes there is a room in the market for a new type of tabloid newspaper, as the existing tabloids are tarnished to some degree by the hacking scandal which led to the closure of the News of the World.
Howell told Media Week: "It is true we are in discussions with a number of parties about the possible purchase of Sunday titles."
Desmond – who also owns the Daily and Sunday Express, Channel 5, OK! Magazine and the Health Lottery – has diversified his media assets in recent times.
He has expressed interest in purchasing The Sun, should Murdoch choose to sell the tabloid.
In May this year, Northern & Shell reported 2011 post-tax profits of £40.2m, down 23.4% from 2010.Follow @johnreynolds10
This article was first published on mediaweek.co.uk