April 22, 2024

Brighton Journal

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UK moves to ban foreign state ownership of newspapers, a blow to Telegraph bidding

UK moves to ban foreign state ownership of newspapers, a blow to Telegraph bidding

The bold efforts by American media executive Jeff Zucker and his Emirati backers to take over London's Daily Telegraph newspaper appeared to be on life support on Wednesday after the British government introduced legislation banning foreign state ownership of newspapers and news magazines.

The move by Prime Minister Rishi Sunak would torpedo Mr Zucker's bid in its current form, which relies heavily on funding from investment partners in the UAE. The use of Emirati funds caused an uproar in Westminster over foreign influence in the British media, given the great importance of The Telegraph and its sister newspaper, The Spectator, to Sunak’s Conservative Party.

Mr. Zucker's media company, RedBird IMI, can now try to salvage its bid for the print publication by finding new investors and diluting the majority stake held by the Emiratis to the level allowed under the government's proposed rules.

“We are extremely disappointed by today’s development,” a RedBird IMI spokeswoman said. “To date, RedBird IMI has made six investments across the UK and US, and we believe the UK media environment deserves further investment.” The company added that it “will now evaluate our next steps.”

The attempt by Mr. Zucker, the former head of CNN, to rebrand himself as an unlikely news mogul in Britain, has shocked many of the country's top media players, including Rupert Murdoch, who considered taking over The Telegraph for themselves after the newspaper's value soared. . Last year's auction.

Prominent Conservatives, including broadcaster Andrew Neil and Fraser Nelson, editor-in-chief of The Spectator magazine, attacked Zucker's reliance on Emirati money, turning the deal into a political flashpoint over foreign influence over British institutions and galvanizing opposition from Tory lawmakers.

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The deal was already under review by British regulators. Stephen Parkinson, the Minister for Culture, Communications and Creative Industries, promised in the House of Lords on Wednesday to introduce an amendment to legislation preventing foreign state ownership of news publications. The law is expected to be passed in Parliament, where the conservatives have a good majority.

A government spokesman said: “We have listened carefully to the arguments made by parliamentarians in recent weeks, and are taking measures to exclude foreign state ownership, influence or control of newspapers and periodical news magazines.”

The resistance to the offer was less about Mr. Zucker, who said he would not run day-to-day operations at the newspaper, than about his senior partner.

RedBird IMI is a joint venture between RedBird Capital, an American private equity firm, and International Media Investments, an Abu Dhabi investment fund controlled by Sheikh Mansour bin Zayed Al Nahyan, Vice President of the United Arab Emirates and a member of the UAE royal family. . Abu Dhabi.

Sheikh Mansour has already cut a swath in Britain, angering some with his ownership of Manchester City, a Premier League football club known for its deep pockets and aggressive financial tactics.

Critics cited United Arab Emirates Authoritarian governmentA checkered human rights record and friendly relations with Russian President Vladimir Putin were cited as reasons to rule out a bid to buy the 168-year-old Telegraph newspaper, often called The Torygraph for its influence in conservative politics. The lawmakers said those commitments trump Mr. Zucker's editorial record at CNN, as well as the investor group's pledge to create provisions to protect the newspaper's independence.

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Michael Forsyth, a former Conservative minister in the House of Lords, said on Wednesday that the offer “is what it is, an influence strategy”.

“The financial and ownership conversations are important,” Forsyth said, adding that this influence should not extend to investors who have ties to a government that “puts journalists in prison, deports critics, shuts down all criticism, and is a state that is at the bottom of the class.” In the tables of international freedom.

Any hope that the opposition Labor Party would support the deal evaporated earlier this week when the shadow culture secretary, Thangam Debbonaire, announced that her party would scrap the deal if it takes power after a general election expected later this year. Labor leads the Conservatives in most opinion polls by about 20 percentage points.

“Labour is unambiguous and unequivocal on this point,” Ms. Debonaire told Mr. Nelson, editor of the Spectator magazine. In an interview. “Ownership by a foreign power is incompatible with freedom of the press, which is essential in any democracy.”

If Zucker withdraws his bid to buy The Telegraph, one potential acquirer is Paul Marshall, the British hedge fund billionaire. Mr Marshall funded GB News, a fledgling television channel that emerged as a kind of ambitious Fox News, giving a platform to populist agitators such as Nigel Farage.

This is not the first time that the British media world has shown hostility towards outsiders. Murdoch's purchase of The Times of London in 1981 was ridiculed as a hijacking by an arrogant Australian. Mr Murdoch, who also owns The Sun, is expected to seek ownership of The Spectator, a prestigious weekly magazine.

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Mr. Zucker's journey to take over The Telegraph began last year, when RedBird IMI agreed to pay $1.47 billion in debt owed by the newspaper's former owners, the Barclay brothers. The deal had to be approved by British regulators, who agreed to postpone the decision until March.

As criticism mounted, Mr. Zucker made multiple trips to London to argue his case. Last week, he appeared on a popular British radio show called “The News Agents” and accused Mr Neil of only opposing the deal after he sought the role of chairmanship of The Telegraph and The Spectator newspapers, but was rejected.

“This may come as a shock, but Andrew Neal is a total hypocrite on this,” Mr. Zucker said on the podcast. Mr. Neal responded that he had never sought the office of president and said that Mr. Zucker's “memory is playing tricks on him.”

Mr. Zucker has been more fortunate to receive different treatment in Britain. Last month, RedBird IMI It hit $1.45 billion deal to acquire All3Media, the production company that oversaw hit films like “The Traitors” and “Fleabag.”

Benjamin Mullen And Stephen's Castle Contributed to reports.