Britain used to pride itself on its openness to foreign investment. For decades it has allowed foreigners to build its infrastructure, provide its services and buy its leading companies. While the French declared yoghurt a strategic sector, Britain boasted of the Wimbledonisation of the City of London in which all the top players were from overseas.
Yet Britain’s taste for open markets may have finally found its limits in, of all places, the newspaper industry. A bid by an Abu Dhabi-backed entity for The Telegraph newspapers and The Spectator magazine has turned some of Britain’s most fervent free marketeers into frothing protectionists. A ferocious campaign is underway in parliament and the media to convince the government to block the deal.
Of course, those calling for the deal to be blocked insist there is no contradiction. They argue that what they object to is not the nationality of the bidder, but the fact that the bulk of the money is coming from International Media Investments (IMI), a fund controlled by Sheikh Mansour bin Zayed al-Nahyan, a member of the Abu Dhabi ruling family and deputy prime minister of the United Arab Emirates. That, they say, is tantamount to a takeover by a foreign government – and an undemocratic one at that. It is one thing Mansour owning Manchester City football club – quite another taking a 75 per cent stake in a newspaper, where he might try to influence its editorial coverage, as he has done at other media brands that he owns.
If this is what lay in store for The Telegraph and The Spectator, the critics might have half a point. Of course, a true free marketeer might argue that the British media is competitive enough to withstand such a takeover given that a wide range of global news providers, broadcasters and new digital entrants are fighting for audience share. They might argue that the rest of the media would quickly call out evidence of censorship while providing alternative sources of reliable information. Others might question how much editorial freedom in any case currently exists at The Telegraph or indeed many other British newspapers, where coverage of important issues is often skewed by the political and commercial interests of their owners.
Nonetheless, all this is beside the point, since there is no prospect of Abu Dhabi getting editorial control of The Telegraph and The Spectator. That is because what is being proposed is a private equity deal in which Mansour’s IMI would be a purely passive investors. There is nothing unusual about that. In a private equity deal, there are two classes of investor: the private equity firms, which are known as general partners (GPs), whose job is to identify targets, negotiate deals and oversee operations and for which they receive a management fee plus carried interest, typically the first 20 per cent of any profits on the deal; and limited partners (LPs), typically pension funds, insurance companies and high net worth individuals, with no rights other than to decide whether to participate in future capital calls or agree to a sale.
In this transaction, the original plan was for the GP to be RedBird IMI, a joint venture between RedBird and Mansour’s fund. That gave spurious credibility to the idea that Abu Dhabi might have influence over operations. In reality, this made no sense. The whole point about private equity is that these are not long-term investments. Given that RedBird will not get paid until it has sold The Telegraph and The Spectator at a profit, it is hardly likely to allow the value of the brands – and its own reputation as a deal-maker – to be destroyed by allowing IMI to meddle with operational decisions from which it is legally excluded. Nonetheless, the deal was restructured so that Redbird, not the joint venture, is now the GP, according to someone familiar with the situation.
Meanwhile, RedBird has committed to establish an independent trust consisting of senior industry figures who will have legally binding powers to guarantee editorial independence and approve the appointment of an editor. Yet this has been dismissed by critics as not worth the paper it is written on. In a punchy interview on Newsnight last week, Andrew Neil, the current publisher of The Spectator, claimed that a similar arrangement at The Times and The Sunday Times, where he was once editor, had failed to constrain Rupert Murdoch. He neglected to mention that a powerful editorial trust has played a valuable role over the years in preserving the editorial independence of another publication where he once worked, The Economist.
But Neil was wrong about the Times board, too. In 2012, the independent directors delayed John Witherow’s appointment as editor for months, amid concerns about his independence. In fact, those fears proved unfounded. Not only was Witherow a brilliant editor of The Times but he was the only Murdoch editor with the courage to resist intense corporate pressure to back Brexit. What’s more, when I was at The Times, senior executives used to continually complain that the directors were thwarting efforts to adapt to a changing media landscape. That obstacle was finally removed in 2022 after the directors advised the government to release News Corp from the undertakings given by Murdoch in 1981. As someone close to the process said to me, “If TheTimes thinks the answer is to turn itself into the Daily Mail, why should the board stop them?” Many Times readers may take a different view.
But if there is no threat to editorial independence, why is there so much opposition to the deal? Part of the answer is a lack of understanding of how private equity works. So too is commercial rivalry, which has played a role in how the deal has been reported. Sir Paul Marshall, the billionaire owner of GB News which provides lucrative employment for a stable of influential Telegraph commentators and Tory MPs, was considered the frontrunner to buy the titles until Redbird circumvented the auction by agreeing to pay off the £1bn debt owed by Barclay family, the current owners, to Lloyds Bank in return for an option to buy the publications. The Daily Mail was also a bidder for The Telegraph, while Rupert Murdoch has long coveted The Spectator. RedBird was never going to get a fair hearing from much of the British press.
But the real opposition to RedBird is clearly ideological. Neil gave the game away on Newsnight when he embarked on a bizarre ad hominem attack on Jeff Zucker, the former chief executive of American TV network CNN who is leading the bid for Redbird. The American, he said, had no knowledge of Britain, or newspapers, or magazines. What’s more, Neil insisted, Zucker is a left-wing Democrat (though Zucker has never revealed how he votes), who dragged CNN to the left and was bound to do the same to The Telegraph and The Spectator. As such, Neil declared, Zucker was not a fit owner of “these two vital centres of mainstream centre-right thought”.
Leave aside the effrontery of Neil – who reacts with fury whenever anyone on social media dares to suggest on the basis of his journalistic record that he is a right-wing Brexiteer – claiming to know how another journalist votes. What Neil and his allies in the right-wing media who have devoted their careers to arguing for the bracing effect of free market capitalism for everybody else appear to be saying is that an exception should be made for The Telegraph and The Spectator because without it the delicate flower of right-wing thought in Britain would wither. Perhaps he fears that without government protection, right-wing thought in Britain would disappear like Marxism to the margins, left with only the Daily Mail and The Times to sustain it.
A government with a genuine commitment to open markets would treat this special pleading with the contempt it deserves. Instead, ministers seem determined to kick the bid into the long grass, binding it in regulatory weeds, too terrified to stand up to right wingers who are already plotting to bring down the prime minister. The irony is that RedBird may be the first owner of The Telegraph in decades that genuinely cares about editorial standards, rather than pursuing a political agenda. Amid a global media bloodbath, with even the billionaire owners of the Los Angeles Times and the Washington Post cutting their losses, here is a deep-pocketed investor willing to bet the other way. Anyone who really cares about journalism would bite its arm off.
Simon Nixon is a former chief leader writer and financial columnist for The Times. He currently runs a substack newsletter called ‘Wealth of Nations’ on international economics