•   Saturday, 24 Feb, 2024
Telegraph takeover: Gulf bidders promise press freedom

Telegraph takeover: Gulf bidders promise press freedom

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The ownership of the papers was due to be transferred to the Gulf-backed RedBird IMI consortium.

But the government intervened over fears the papers might come under the control of an autocratic foreign state.

Jeff Zucker, who is leading the bid, told the BBC commitments were backed by legally binding agreements.

An independent editorial trust board will further protect the Telegraph's editorial independence, the former CNN executive added.

The bid is largely funded by Sheikh Mansour bin Zayed bin Sultan al-Nahyan - owner of Manchester City Football Club and vice-president and deputy prime minister of the United Arab Emirates (UAE).

Despite providing 75% of the money, Mr Zucker insists the UAE will remain a "passive investor", with no influence over editorial decisions.

There have been grave concerns from MPs, many of the Telegraph's current and former journalists, and its readership that the newspaper might fall under the control of an authoritarian foreign state.

But Mr Zucker, who will take over as chief executive of the Telegraph and Spectator if the deal gets the go-ahead, insisted his investment firm would be a responsible owner of the titles.

The Telegraph and the Spectator magazine were put up for sale last year when they were seized by Lloyds Banking Group from long-time owners the Barclay family, which had failed to pay back a loan of more than £1bn.

Lloyds commenced an auction process, but at the last minute, the Barclay family paid off their debt with money lent by Sheikh Mansour bin Zayed al-Nahyan.

In return, the Barclay family agreed to transfer its ownership of the Telegraph and Spectator to RedBird IMI, a joint venture between US firm RedBird Capital and International Media Investments (IMI) of Abu Dhabi, managed by Mr Zucker.

That was the point at which the UK government intervened by issuing a Public Interest Intervention Notice.Addressing why RedBird IMI had not entered the auction process for the publications like the other bidders, Mr Zucker said he had wanted certainty that his group's bid would clinch the deal.

"We were a little smarter than some of our competitors and our ability to do that doesn't mean that there was anything nefarious about it. It just means we were a little bit smarter," he added.

The Daily and Sunday Telegraph wield significant influence in Britain - particularly among conservative voters and politicians.

Boris Johnson, when Prime Minister, once famously quipped that The Daily Telegraph "is my real boss".

Senior figures in the Conservative party have expressed deep misgivings at the proposed takeover, including veteran Tory MP David Davis who said: "The UAE is an authoritarian regime with a pretty dismal human-rights record. Its leaders are not fit to preside over our media."

One solution, floated by people close to the deal, was a plan to dilute the Abu Dhabi shareholding by finding additional investors for the bid, reducing its stake to a level below controlling interest.

However, this was rejected by the potential buyers.

Mr Zucker insisted his bid was "American led" and said the proposed structure would preserve the papers' independence.

"We are confident that our commitments and the incredibly robust legally underpinned editorial protections that we have submitted will be sufficient to address any concerns," he asserted.

The establishment of an editorial trust board is key to RedBird IMI's editorial protection assurances.

Mr Zucker said the board would serve three functions: to ensure the editorial independence of the titles, to handle all disputes that arise, and to approve the appointment of an editor.

"I think that taken collectively, there's no UK newspaper that has stronger protections of editorial independence," he added.

The Telegraph's current editor, Chris Evans, would stay in place, according to Mr Zucker, though he admitted he had not yet had that conversation with Mr Evans.

The former editor of the Sun newspaper, David Yelland, said that the editorial guarantees in the Zucker document were "as robust as any I have seen".

"Furthermore, by their own admission, the Abu Dhabi investor has no editorial experience or interest in getting involved unlike Rupert Murdoch, who is a journalist down to his fingertips or previous owners of the Telegraph, such as Conrad Black, and indeed the current ownership," he added.

The transfer of control is far from certain, however, and the whole process could easily drag on for many months as the government may also refer the matter to the Competition and Markets Authority - which could leave the ownership of the paper in limbo during a critical election campaigning period.

Gulf states have been very significant investors in the UK in recent years. UAE-based investors have poured billions into ports, housing projects, windfarms and science parks and are being courted for an investment in a new nuclear power plant at Sizewell in Suffolk. The Conservative government potentially risks offending deep-pocketed friends if it draws a line at its favoured newspapers.

But opponents of the deal point to examples of breaches of press freedom, including reports of a mass firing of journalists at Al Roeya, a newspaper in Dubai owned by IMI, after its editors had decided to run a story on high fuel prices in UAE.

An IMI spokesperson said: "We are fully committed to the editorial independence of the Telegraph and the Spectator. The legal undertakings we are making to the UK government to protect the journalistic freedom of the titles include a separate independent Editorial Trust to act as guardian, an additional undertaking from IMI to not engage in any way with journalists or their reporting, and the structural separation in the RedBird IMI fund buying the Telegraph and Spectator. This is a business investment for us and we will play no part in the running of the Telegraph or the Spectator."

The decision will ultimately fall to the Culture and Media Secretary, Lucy Frazer, either to let it go ahead, require further guarantees or amendments, or block it outright.

The Department for Culture, Media and Sport declined to comment.

The BBC understands that Ofcom and the government received the plans more than a week ago and a preliminary ruling is expected some time in February.

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