Mr Desmond, whose Northern & Shell media group also owns the Express and Star newspapers, has asked advisers at Barclays to review options for the broadcaster, including a potential sale early in the new year, according to The Financial Times.
The entrepreneur bought Channel 5 for £103.5 million in 2010 and has since overhauled the network, bringing on board programmes such as Big Brother.
It returned to operating profit in the first half of 2013, with earnings of £20.6 million against losses of £16.1 million a year earlier.
While a sale of Channel 5 would deliver a hefty profit for Mr Desmond, it is thought there is no guarantee he will decide to offload it.
A spokesman for Northern & Shell said: "As a media group with a broad portfolio of assets, we are often the subject of speculation, but it remains our policy not to comment on these matters."
Free-to-air broadcasters are enjoying a recovery in advertising markets after the recession.
Rival ITV recently reported a 6% hike in overall revenues for the first nine months of its financial year after net advertising revenues rose 11% in the third quarter.
Its shares have soared tenfold since 2009 thanks to the brighter advertising outlook as the economy recovers.
Mr Desmond snapped up Channel 5 three years ago from European entertainment group RTL, which had written down the value of the network by more than three quarters.