A bold bid by US media magnate Jeff Zucker and his Emirati backers to acquire London’s Daily Telegraph appeared to be on life support on Wednesday after the British government pushed through legislation that would ban foreign state ownership of newspapers and magazines. news.
Prime Minister Rishi Sunak’s move would torpedo Mr Zucker’s bid in its current form, which relies heavily on funding from investment partners in the United Arab Emirates. The use of Emirati funds has sparked an uproar in Westminster over foreign influence in British media, given the huge importance of The Telegraph and its sister publication, The Spectator, to Mr Sunak’s Conservative Party.
Mr Zucker’s business media company, RedBird IMI, may now try to salvage its listing bid by finding new investors and reducing the Emiratis’ majority stake to a level allowed under the government’s proposed rules.
“We are extremely disappointed by today’s development,” said a spokeswoman for RedBird IMI. “To date, RedBird IMI has made six investments in the UK and US and we believed the UK media environment was worthy of further investment.” The company added that it “will now assess our next steps.”
The drive by Mr Zucker, a former CNN chairman, to reinvent himself as Britain’s unlikely news tycoon has shocked many of the country’s top media players, including Rupert Murdoch, who considered acquiring the Telegraph for himself. them after the paper was put up for auction last year.
Prominent Tories, including the broadcaster Andrew Neil and Fraser Nelson, editor of The Spectator, attacked Mr Zucker’s reliance on Emirati funds, turning the transaction into a political flashpoint over foreign influence in British institutions and fueling opposition. of Conservative Party legislators.
The deal was already under review by British regulators. In the House of Lords on Wednesday, Stephen Parkinson, the minister for culture, communications and creative industries, promised to propose an amendment to the legislation that would prevent foreign state ownership of news publications. The law is expected to pass the House of Commons, where the Tories have a healthy majority.
“We have listened carefully to the arguments of MPs in recent weeks and are taking action to expressly exclude foreign state ownership, influence or control of newspapers and news magazines,” a government spokesman said.
The resistance to the bid was less about Mr. Zucker, who said he would not run the day-to-day operations at the newspaper, than about his main partner.
RedBird IMI is a joint venture between RedBird Capital, a US 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 member of the royal family Abu Dhabi family.
Sheikh Mansour has already curtailed much influence in Britain, raising eyebrows from some with his ownership of Manchester City, a Premier League soccer club known for its deep pockets and aggressive financial tactics.
The critics are mentioned the UAE’s authoritarian government, checkered human rights record and friendly ties with President Vladimir V. Putin of Russia as reasons to block the bid for the 168-year-old Telegraph, often called The Torygraph for its influence on conservative politics. Those obligations, the lawmakers said, went beyond Mr. Zucker’s record at CNN, as well as the investor group’s commitment to install provisions to ensure the newspaper’s independence.
Michael Forsyth, a former Conservative cabinet minister in the House of Lords, said on Wednesday that the offer “is what it is, which is an influence strategy”.
“Talks about money and ownership matter,” Mr. Forsyth said, adding that that influence should not extend to investors with ties to a government that “jails journalists, deports critics and shuts down all criticism.” , a country that ranks at the bottom of international freedom tables.”
Any hope that the opposition Labor Party could support the deal was dashed earlier this week when the shadow culture secretary, Thangam Debbonaire, said her party would scrap the deal if it came to power after a general election expected later this year . Labor leads the Tories in most opinion polls by around 20 percentage points.
“Labour is clear and unequivocal on this point,” Ms Debbonaire told Mr Nelson, the editor of the Spectator, in an interview. “Ownership by a foreign power is incompatible with freedom of the press, which is essential in a democracy.”
If Mr Zucker withdraws his bid for the Telegraph, one possible buyer is Paul Marshall, a British hedge fund billionaire. Mr Marshall funded GB News, a pioneering TV channel that has emerged as a kind of would-be Fox News, giving a platform to populist firebrands such as Nigel Farage.
It is not the first time that Britain’s media world has shown hostility towards foreigners. Mr Murdoch’s purchase of The Times of London in 1981 was derided as a hijacking by an upstart Australian. Mr Murdoch, who also owns The Sun, is expected to pursue ownership of The Spectator, an authoritative weekly magazine.
Mr Zucker’s odyssey to acquire The Telegraph began last year when RedBird IMI agreed to retire $1.47 billion in debt owed by the paper’s previous owners, the Barclay brothers. The deal had to be approved by UK regulators, who agreed to delay a decision until March.
As criticism mounted, Mr. Zucker made several trips to London to plead his case. Last week, he appeared on a popular British podcast, “The News Agents,” and accused Mr. Neil of opposing the deal only after he sought, and was rejected, a chairmanship of The Telegraph and The Spectator.
“This may come as a shock, but Andrew Neil is quite hypocritical about it,” Mr Zucker said on the podcast. Mr. Neill responded that he never sought the presidency and said that Mr. Zucker’s memory was “making fun of him.”
Mr Zucker had better luck with a different transaction in Britain. Last month, RedBird IMI closed a $1.45 billion deal to acquire All3Media, a production company that has overseen hits like “The Traitors” and “Fleabag.”
Benjamin Mullin and Stephen Castle contributed to the report.
