16.7 C
New York

Acquisition of The Telegraph by UAE-Backed Group Raises Concerns in UK

Published:

The prized British institution of the Daily Telegraph could soon fall under foreign influence as an investment group backed by United Arab Emirates money moves to take control. 

This proposed deal has set off alarm bells among Telegraph staff, media watchdogs, and Conservative MPs concerned about threats to press freedom and editorial independence in the UK. The idea of “newswashing” now looms over one of the country’s most influential newspapers, just as “sportswashing” pervaded English football when Gulf money flowed in. 

With the culture secretary ready to investigate and public interest concerns swirling, the Telegraph faces a pivotal moment. Will its renowned broadsheet journalism endure under new ownership, or will powerful overseas backers cast a long shadow?

Shortly after midday on Monday, an email from Daily Telegraph editor Chris Evans arrived in employees’ inboxes. Evans wrote that over the weekend, a number of staff had asked him questions about the newspaper’s future ownership. According to Evans, employees had been asking how they could be confident that the Telegraph’s editorial independence would be protected under new ownership. Evans admitted that, at the moment, he knew no more about the situation than what employees had already read.

After a turmoil-filled week at one of the UK’s largest and most influential newspapers, the Daily Telegraph’s staff are not the only ones worried. Speculation about potential buyers has run rampant since the Telegraph and its sister publication, The Spectator, were put up for sale. This occurred after the newspaper’s previous owners, the Barclay family, failed to repay £1.15 billion in debts to Lloyds Banking Group.

Telegraph Media Group, was put up for sale back in June to repay its substantial debts. 

This came about after the Barclay family, who controls Telegraph Media Group through their holding company B.UK. Limited, defaulted on loans from the Bank of Scotland totaling around £1 billion. 

The bank said appointing receivers was a last resort after failed talks to find an agreeable solution for Barclays to repay what they owed. With the iconic Telegraph newspapers and magazines now on the auction block, their fate hangs in the balance as creditors seek to recoup their funds. 

The current financial struggles of the Daily Telegraph stem from decisions made nearly two decades ago when the Barclay brothers acquired the newspaper back in 2004. Eager to purchase the prestigious publication, the Barclays paid a hefty £665 million despite an initial attempt to broker a cheaper backroom deal being blocked.

Having just bought the Littlewoods retail business months prior, the brothers took on £272 million in debt from Bank of Scotland to help finance the inflated Telegraph price tag, in a textbook case of a leveraged buyout.

In the 19 years since that initial debt has snowballed for the Barclays. The burden of repaying the loans, combined with the challenging economics facing the newspaper industry, has now pushed the Telegraph Media Group into defaulting on over £1 billion owed to creditors.

The unfolding financial turmoil enveloping the historically prestigious publications serves as a stark reminder that even well-established media empires can crumble under the weight of unpaid debts.

Several journalists, media observers, and Conservative members of parliament seemed blindsided and unprepared this week when an investment group called RedBird IMI made a surprise bid to take control of the Daily Telegraph.

RedBird IMI is led by former CNN president Jeff Zucker and has significant financial backing from Sheikh Mansour bin Zayed Al Nahyan. Sheikh Mansour is the owner of Manchester City, and also just happens to be the vice president of the United Arab Emirates.

By offering to repay the debts owed by the Telegraph’s previous owners, the Barclay family, to Lloyds Banking Group, RedBird IMI aims to acquire the influential British newspaper in exchange.

This unexpected proposed takeover sparked immediate fears among journalists, media watchdogs, and politicians. They are deeply concerned about the influence of Gulf state money and foreign rulers over one of the UK’s most prominent national newspapers.

This sparked concerns that the influence of Gulf countries, which has already permeated English football’s Premier League through so-called “sportswashing,” was now apparently spreading to the UK media landscape. 

An unnamed Telegraph source voiced concerns, saying, “We’ve had sportswashing, are we now seeing newswashing?”

Amnesty International warned the deal could have serious implications for the freedom of journalism in the UK. Meanwhile, the Telegraph published a leader article stressing that its editorial independence must be guaranteed.

By Tuesday, just one week after the auction process began in late October, the sale of the Telegraph and Spectator was abruptly paused. This occurred after growing backlash over foreign influence on the publications.

The very next day, Culture Secretary Lucy Frazer responded to urgent calls from Conservative Party MPs to investigate the deal. In a letter, the MPs stated, “influence over a quality national newspaper being passed to a foreign ruler at any time should raise concerns [and] must be investigated.”

Heeding these warnings, Frazer announced she was strongly considering asking Ofcom, the media industry regulator, to examine the proposed takeover on public interest grounds. Ofcom quickly confirmed it was fully prepared to provide its assessment of the deal to the government if requested.

This rapid intervention highlights how seriously politicians and regulators are treating the potential threat to one of the UK’s most prominent news outlets should it fall under foreign control.

Former Conservative cabinet minister David Davis stated that investigating the proposed Telegraph acquisition is the right thing to do, especially since RedBird IMI has openly said it intends to quickly convert its loan to Barclays into an equity stake in the newspaper.

“Here you have a major national asset with huge influence, particularly over one side of the political spectrum, essentially being bought by the vice-president of Abu Dhabi,” Davis pointed out.

Davis expressed concerns that the newspaper is being purchased for more than just financial reasons. In his view, this “triggers a requirement to do a fit and proper person test” on the new owners.

However, RedBird IMI has stated it is “entirely committed to maintaining the existing editorial team” at the Telegraph and believes “editorial independence is essential” to the publications’ reputations.

Media analyst Alex DeGroote downplayed worries about undue foreign influence, noting the Telegraph Media Group would be a “very small asset” for oil-rich Abu Dhabi. He doubts the Gulf fund has any “explicit agenda” in acquiring the newspaper.

But former Guardian editor Alan Rusbridger said for those newly worried about foreign money in UK media, that ship has likely already sailed. He believes that despite loud objections by Tory MPs and rival bidders, the deal will likely go through since competition is not an issue here.

Rusbridger added: “There will be a lot of lobbying from people with their own interests in trying to block this deal, [but] none of this is going to be very edifying.”

And it’s not just MPs and journalists who have decided to voice their concerns on this deal. Still, a British academic who was imprisoned and tortured in the United Arab Emirates after being falsely charged with spying has voiced his own criticisms.

The man, Matthew Hedges, who was sentenced to life in jail in November 2018, called for the British government to delay the deal.

In a letter to the Telegraph, he wrote: “As a victim of torture at the hands of the UAE, simply for undertaking legitimate academic research, I personally attest to the UAE’s disregard for human rights. It would be inappropriate to surrender a trusted media outlet to a foreign state that does not respect freedom of speech.”

Hedges also said the proposed deal was intended to add to the UAE’s “political leverage and influence” and should be stopped in order to defend British democracy. 

Critics like the academic who suffered imprisonment and torture in the UAE argue the Telegraph would inevitably self-censor to avoid upsetting its new Emirati benefactors. As he told the BBC, “These titles will lose their independence. If you’re funded by a foreign state, you don’t want to bite the hand that feeds.”

However, the UAE has its own strategic interests in gaining influence over a prominent British media outlet. The purchase fits with a broader Emirati foreign policy aimed at enhancing the nation’s power and prestige globally. This is evidenced by high-profile Emirati investments like the acquisition of the Premier League football club, Manchester City, which had an incredible last season as they won the treble, all the more adding to the prestige and influence of the club’s powerful owner.

All in all, the proposed acquisition of the Daily Telegraph by a UAE-backed investment group has sparked a politically charged debate in the United Kingdom. While the deal could bring much-needed financial relief to the struggling newspaper, deeper concerns persist about national security implications and foreign influence over a cherished British media institution.

On the one hand, the Telegraph obtaining a lucrative lifeline from overseas backers may safeguard the jobs of its staff and allow its respected journalism to continue unfettered. The new owners also insist editorial independence will be maintained.

However, fears linger that a prominent UK newspaper could become a tool to promote the interests of a foreign nation. Allowing the vice-president of the UAE to gain sway over the Telegraph risks handing him influence over British public discourse.

At its core, this deal encapsulates the dilemma between financial necessity and principles. 

The Telegraph is the latest casualty of today’s brutal media politics. 

But in opening its doors to questionable overseas patrons, it may have gambled away something more valuable than money: the democratic integrity of a free press.

At the end of the day, with both sides having much at stake, the outcome of this deal will have an impact beyond just the newspaper’s bottom line.

Related articles

Recent articles

spot_img