Foreign states will be allowed to own a 15 per cent stake in British newspapers, the UK government has announced in a move that is set to resolve ownership of the Telegraph Media Group.
Architects of the initial legislation had sought a threshold of five per cent, but this has been tripled after other newspaper owners are understood to have lobbied the government to call for scope to remain for overseas investment in UK media, including state-backed entities.
Ownership of The Telegraph has been in abeyance since a change in the law last year restricted state-linked investments in the sector. RedBird IMI, a US-based investment vehicle associated with the owners of this newspaper, was effectively blocked from exercising purchase rights over the newspaper and the Spectator magazine. The previous Conservative government intervened after a deal with the long-standing owners, the Barclay family, was struck in 2023.
Culture Secretary Lisa Nandy announced the implementation terms of the law on Thursday after months of speculation about how the Labour government would fine-tune the legislation.
The 15 per cent threshold of state ownership, triple that suggested by proponents of the amendment, is reported to have been settled after pressure from representatives of Rupert Murdoch, owner of The Times, and the Daily Mail’s Lord Rothermere.
They argued that UK media outlets needed greater outside investment, especially as the industry moves from print to online.
The Department for Culture, Media and Sport announced that it would introduce “targeted exceptions to allow certain state-owned investment funds, such as sovereign wealth funds or pension funds” to invest the 15 per cent.
“Britain’s free and independent press is a national asset like no other and it is right that we have strong measures in place to allow scrutiny of UK takeovers that might go against the public interest,” said Ms Nandy.
The move sees powers to call in media mergers extended beyond TV, radio and newspapers to include online news sites and news magazines.
Ms Nandy also announced expanded powers to allow greater scrutiny of takeovers in a “balanced approach” to “limit any scope for foreign state control or influence of news organisation” while allowing them to commit significant investment. The government recognised “that news organisations must be able to raise vital funding”.
An auction process for The Telegraph, valued at £500 million ($664 million), has been running for the past year, but no buyer has yet met the terms for a successful bid.
It is reported that the American private equity company RedBird Capital has ambitions to take ownership of the title, which dates back to 1855. RedBird Capital founder Gerry Cardinale is evaluating a plan to buy the paper to end the impasse, a representative told Bloomberg.
