When former CNN boss Jeff Zucker swooped in with an audacious eleventh-hour Abu Dhabi-backed bid to take control of the UK’s Telegraph and Spectator last November, he appeared confident he would emerge a winner.
But Zucker underestimated the fierce resistance he would encounter as he went head-to-head with Britain’s Conservative establishment — and its favourite media titles — as they fought to frustrate his RedBird IMI investment group.
On Wednesday, after months of fierce lobbying, and last-minute parliamentary horse-trading, Prime Minister Rishi Sunak set out plans to change the law to stop foreign states buying British news organisations.
The news will delight some executives at the Telegraph and Spectator and might buy the embattled Sunak some favourable coverage to boost dire Tory polling. “We need all the help we can get,” admitted one former Conservative cabinet minister.
The publications, fiercely opposed to the idea of foreign state ownership, have led the resistance to RedBird IMI’s £600mn takeover of Telegraph Media Group, helping to orchestrate a Tory campaign to change the law to block it.
Kemi Badenoch, the business and trade secretary, who used to work as “digital director” at the Spectator almost 20 years ago, played an important part in blocking the bid, said people close to government discussions.
For Badenoch, who hopes to succeed Sunak as Conservative leader, the Telegraph and Spectator are media players with a hotline to party members who have the final say in leadership contests. “She was working behind the scenes, pushing for action,” said one of the people.
The ever-bullish Zucker had some grounds for confidence last November, when he laid out plans to win over regulators to RedBird IMI’s takeover with the promise of an independent editorial board at the Telegraph as well as investment.
He was responding to how culture secretary Lucy Frazer had commissioned probes by the media watchdog Ofcom and the Competition and Markets Authority, the antitrust regulator.
Influential Conservatives such as former chancellor Nadhim Zahawi supported RedBird IMI’s bid, while another former chancellor, George Osborne, and Ed Richards, the ex-Ofcom boss, were enlisted as advisers.
Furthermore, Abu Dhabi, which provides about three-quarters of the money behind RedBird IMI, is a British ally in the Middle East and a source of inward investment. UK ministers are regular visitors in search of trade opportunities, including Badenoch herself this month.
But over the past few months, the Telegraph and Spectator began a ferocious lobbying campaign against the bid, claiming Abu Dhabi ownership could threaten editorial independence and free speech.
By this week almost 150 MPs from across party lines, but mainly Conservatives, had backed proposals for parliament to be given a veto over the takeover, calling foreign state ownership of a newspaper group a “dangerous Rubicon” that should not be crossed.
Robert Jenrick, a former cabinet minister, led the opposition in the House of Commons, with Sir Iain Duncan Smith, a former Tory leader, adding his voice to those claiming it would be “bizarre” to have “one of the papers of record in the UK come under the control of somebody in the Middle East”.
IMI, the Abu Dhabi vehicle behind RedBird’s joint venture, is controlled by Sheikh Mansour bin Zayed Al Nahyan, a vice-president of the United Arab Emirates who also owns Manchester City Football Club.
But Sunak, until this month, had seemed content for the RedBird IMI bid to proceed through protracted regulatory scrutiny, potentially leaving any final decision on the takeover until after this year’s general election. He had given no indication he might legislate to block it.
Whatever the issues around Zucker’s bid, the other potential buyers of the Telegraph — traditionally seen as the in-house journal of the Tory party — also came with strings attached, as far as the Conservative leadership was concerned.
Rupert Murdoch’s News UK and Lord Rothermere’s DMGT, two other big newspaper groups, might have faced significant competition issues. Paul Marshall, the hedge fund millionaire, already co-owns GB News, which provides a platform for the populist Reform UK party, a serious threat to the Tories.
The problem facing opponents of the takeover was how to force the prime minister’s hand?
The decisive moment came when Baroness Tina Stowell, a former Tory leader in the House of Lords, introduced an amendment to a bill going through the second chamber with the aim of stopping the Zucker bid.
The February 26 amendment to the digital markets bill sought to give parliament a veto over bids by foreign states to buy British media assets.
“Nobody in government knew anything about it until it was laid,” she told the Financial Times. Jenrick and his allies seized on the idea and immediately threw their weight behind it.
Crucially, the opposition Labour party indicated this month it would also go along with it. “We don’t support foreign government ownership of the media,” a spokesperson for Labour leader Sir Keir Starmer said.
With Stowell planning to put her amendment to a vote on Wednesday and fully expecting victory, Sunak was placed in a corner. “It was checkmate — the prime minister’s hand was forced,” said one former minister involved in the campaign to stop RedBird IMI.
If Stowell’s amendment passed, Sunak might have tried to overturn it in the Commons. But with Labour and more than 100 Tory MPs signalling their opposition to foreign state ownership of the Telegraph, such a move would have been futile.
Instead, Sunak ordered a negotiation with Stowell. Officials in the culture department “started moving at a thousand miles an hour” to reach an accommodation with her, a person familiar with the matter said. Ministers held meetings with the Tory peer over the past week, which finally came to fruition on Wednesday.
Under the deal, Stowell would withdraw her amendment in favour of a government amendment that would achieve her objective and satisfy the scores of Tory MPs lined up against the Zucker bid.
Lord Stephen Parkinson, culture minister, announced in the Lords on Wednesday around 5pm that the measure would “amend the media merger regime explicitly to rule out newspaper and periodical news magazine mergers involving ownership, influence or control by foreign states”.
It has been a bruising episode for those involved in the Zucker bid. The tone of the debate at Westminster in recent weeks has alarmed some in the RedBird IMI camp given comments they saw as bordering on xenophobia against a trading partner in the Middle East.
One said the deal looked like the victim of a weak prime minister unable to stand up to vocal parts of his backbench and the chaos within his party.
A spokesperson for RedBird IMI said it was “extremely disappointed” by the government’s decision, and would “evaluate our next steps”.
The joint venture “have been clear that the acquisition of the Telegraph and the Spectator has been a fully commercial undertaking. We remain committed to developing powerful and commercially sustainable global media assets”, the spokesperson added.
Sir Robert Buckland, former Tory justice secretary, was relieved the issue had come to a head. “This was a highly sensitive matter, but it’s just not appropriate for foreign governments to own British newspapers,” he said.
Spectator editor Fraser Nelson celebrated Sunak’s intervention and said “the free press — fundamental to our democracy — has today been protected by parliament”.
But for many in the Telegraph newsroom, the developments meant further uncertainty about their jobs. Another months-long sales process lies ahead.
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