Will Desmond and Sanchez derail celebrity gravy train?

Rothermere, left, and OK! owner Desmond were due to meet Sanchez

The intriguing relationship between rival celebrity magazine proprietors Richard Desmond and Eduardo Sanchez Junco took a new twist this week as Hello! boss Sanchez prepared to fly into London for high-level talks that could spell the end of the celebrity gravy train.

To add to the intrigue, a meeting at Associated Newspapers with Lord Rothermere was on his whistle-stop schedule. And although a Daily Mail source dismissed the meeting as "purely social" – Lord Rothermere was Sanchez’s guest on a shooting holiday at his estate outside Madrid last year – the continuation of their publishing and distribution arrangements was clearly on the agenda.

It would be inconceivable for Associated to stand back and allow any deal between Sanchez and Express proprietor Desmond to get in the way of a business relationship that gives the Daily Mail first crack at Hello! exclusives, such as the Eamonn Holmes baby pictures used this week.

Desmond was the instigator of the move to end the ridiculously inflated bidding war for celebrity buy-ups, such as the exclusive rights to pictures of Liz Hurley and baby. A previous attempt to bridge the gap by Desmond – friend of New Labour and owner of girlie magazines and the Fantasy Channel- to the extreme right-wing Roman Catholic Spanish billionaire was rejected.

Recently, however, Desmond and Sanchez have become increasingly aware of the threat from brash newcomers such as Heat and Now, which take an edgier, less flattering line on celebrities and are piling on circulation. It is becoming less and less cost-effective to pay huge sums for cosy pictures and anodyne stories of stars that do little for sales.

The magazines have been battling over the rights to the first photos of Hurley’s baby for weeks. The bidding is believed to have soared from £500,000 to £1m until it came to a head two weeks ago when Desmond rang Sanchez in Spain. The Hello! owner’s response is thought to have been along the lines of, "What took you so long?" It is understood both proprietors agreed to withdraw their offers and instead put up a joint bid of around £100,000. A second joint bid is thought to have been agreed for the Beckham’s house party.

Since then, Desmond has flown to Madrid for talks with Sanchez, although neither party is prepared to reveal what was discussed. A spokesman for Desmond said: "OK! and Hello! remain bitter competitors. However, as businessmen, Richard Desmond and Eduardo Sanchez Junco do inevitably talk together from time to time about issues which may impact on both their businesses."

The fact that Sanchez – who hates air travel – was prepared to fly to London for one day on Thursday indicates the importance of the talks.

On the subject of celebrity buy-ups, Hello! publisher Sally Cartwright said: "Any editor or publisher of a celebrity magazine would say the amounts involved have become exorbitant and out of all proportion to any gain which may have been made through a syndication deal. I am confident the arrangement will work."

Although Cartwright would not reveal the practicalities of the Hurley deal, it is understood pictures will be divided between the two titles in advance. Asked if she anticipated similar joint ventures with OK! in future, she added: "At the moment we are taking each day as it comes; who can tell?"

Sanchez is believed to be considering expanding his title in the US. He is also looking at ways to cut costs at his London operation and making decisions about a replacement for editor Phil Hall who resigned last week to join the Press Association.



Philippa Kennedy and Ruth Addicott

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