The Culture Secretary has issued a notice to examine the potential impact of the proposed takeover of The Telegraph by a fund backed by Abu Dhabi on press freedom and media plurality in the UK.
The deal and the notice
The Telegraph, one of the UK’s oldest and most influential newspapers, is currently under the control of Lloyds Banking Group, which seized the media assets from the Barclay family in June 2023 after they failed to repay £1.2 billion in loans. The Barclay family, who had owned The Telegraph since 2004, have agreed to a deal with RedBird IMI, a media investment fund that is mostly funded by Sheikh Mansour bin Zayed Al-Nahyan, a member of the UAE royal family and the owner of Manchester City football club. The deal would involve RedBird IMI providing £600 million in new lending to the Barclay family, which would be converted into ownership of The Telegraph and The Spectator magazine.
However, the deal has raised concerns among politicians, journalists, and human rights activists, who fear that the UAE’s involvement could compromise the editorial independence and integrity of The Telegraph, which has traditionally aligned with the Conservative party and supported Brexit. The UAE is an autocratic state that has been accused of human rights violations, media censorship, and foreign interference.
On Wednesday, November 30, 2023, the Culture Secretary Lucy Frazer issued a Public Interest Intervention Notice (PIIN) to look into the deal’s impact on the public interest grounds of free expression of opinion and accurate presentation of news. A PIIN is the first step of a process that can take several months and lead to the blocking of a takeover of a news outlet if it is deemed to harm the public interest. The notice also triggers an investigation by the media regulator Ofcom and the Competition and Markets Authority (CMA), which will report their findings to the Culture Secretary by January 31, 2024.
The reaction and the implications
The PIIN was welcomed by many critics of the deal, who praised the Culture Secretary for taking action to protect the UK’s media landscape and democracy. Sir Iain Duncan Smith, the former Conservative Party leader, said: “Of number one importance is editorial independence of The Telegraph, which is absolutely critical. It is one of our oldest newspapers and a significant newspaper of record. Many will be concerned at the thought that it could be handed over to a foreign government.”
The National Union of Journalists (NUJ) also expressed its support for the PIIN, saying: “The NUJ has long campaigned for greater scrutiny of media ownership and plurality in the UK and we welcome the intervention by the Culture Secretary. The Telegraph is a key player in the UK’s news industry and any change of ownership must be subject to rigorous examination to ensure that its editorial standards and values are not compromised by political or commercial interests.”
However, the PIIN also faced some opposition and criticism from the parties involved in the deal, who argued that it was unnecessary and harmful. Lloyds Banking Group, which is keen to recover its £1.2 billion debt from the Barclay family, warned the government that the PIIN could jeopardise the deal and have significant implications for its shareholders. Andrew Walton, the bank’s chief corporate affairs officer, said: “We made abundantly clear to the Government the significant implications to us and to our shareholders of a PIIN at this stage. It was not a threat but it was a very clear warning.”
RedBird IMI, the fund that is seeking to acquire The Telegraph, also defended its bid and claimed that it had no intention of interfering with the editorial policy or direction of the newspaper. In a statement, the fund said: “RedBird IMI is committed to upholding the highest standards of journalistic integrity and editorial independence at The Telegraph. We have no political agenda or affiliation and we respect the long-standing values and traditions of The Telegraph as a bastion of quality journalism and free expression in the UK.”
The PIIN also reportedly caused some diplomatic tension between the UK and the UAE, as the Foreign Office intervened to “soften” the language used by the Culture Secretary in her letter to RedBird IMI, fearing that it could offend the UAE ahead of a London summit for foreign investors next week and Rishi Sunak’s trip to the Gulf the following week for the Cop28 climate conference. The UAE is one of the biggest foreign investors in the UK and a key ally in the Middle East. The Foreign Office said that it was “working closely with the DCMS to ensure that the UK’s interests are protected and that the process is fair and transparent”.
The PIIN has also raised questions about the future of The Telegraph and its role in the UK’s media landscape, as it faces uncertainty and challenges amid the changing dynamics of the news industry. The Telegraph has seen its circulation and revenues decline in recent years, as it struggled to compete with online platforms and adapt to the digital transformation. The newspaper has also faced criticism for its coverage of the Covid-19 pandemic, Brexit, and other controversial issues, which some have accused of being biased, sensationalist, or misleading. The Telegraph has denied these allegations and maintained its reputation as a quality newspaper that provides reliable and authoritative news and analysis.
The outcome of the PIIN and the investigation by Ofcom and the CMA will determine whether the deal between the Barclay family and RedBird IMI will go ahead or be blocked, and what conditions or remedies will be imposed to safeguard the public interest. The decision will also have implications for the UK’s media plurality and press freedom, as well as its relations with the UAE and other foreign investors.