Christopher Williams
THE TELEGRAPH
Wed, 17 April 2024
telegraph newspaper
Curbs on foreign state ownership of British news outlets designed to block the UAE bid for The Telegraph are in line to be weakened following an outcry from owners including Rupert Murdoch.
Officials have been warned against the “unintended consequences” of new laws if drawn too strictly by lobbyists for the media mogul and his rival Lord Rothermere, the owner of The Daily Mail.
Mr Murdoch’s holding company News Corp, which is listed in New York, is understood to be concerned that its shareholders could inadvertently breach a proposed 5pc cap on foreign state shareholdings.
Both News Corp and DMGT, Lord Rothermere’s company, are also said to have protested that very strict legislation could cut them off from future opportunities for outside investment that would not involve state influence over their newspapers.
Media mogul Rupert Murdoch's company News Corp has raised concerns over strict ownership legislation - Mike Segar/Reuters
Titles owned by News Corp and DMGT, a potential bidder for The Telegraph, were vocal opponents of the UAE-backed bid from RedBird IMI. The fierce public controversy that led to the planned laws on foreign state ownership of the media, which have effectively killed the bid. The Telegraph is now expected to go up for sale again in the coming weeks.
Department of Culture officials are racing to draw up legislation after the House of Lords last month forced ministers to act against the takeover attempt. RedBird IMI is three-quarters funded by Sheikh Mansour bin Zayed Al Nahyan, vice president of the United Arab Emirates, and there were concerns about what the bid could mean for press freedoms.
An amendment to the Digital Markets Bill is being prepared to outlaw foreign state control or influence over newspapers and news websites. However, exceptions are being prepared via secondary legislation and the details of this are the focus of wrangling.
Sources said that the Government was preparing a consultation on its plans in the coming weeks that is expected to lay the ground for a softer regime.
A source involved in the ongoing discussions said: “This is a narrow intervention meant to safeguard The Telegraph that has sector-wide consequences.”
Ministers previously told parliament that the only allowable exceptions would be for passive stakes capped at 5pc. News Corp is said to be arguing that the cap is too low, partly because US rules do not require investors to disclose stakes below 5pc.
News Corp previously won investment from a Saudi prince, Al Waleed bin Talal. The stake proved crucial in the battle for control that Mr Murdoch faced as a result of the phone hacking scandal, and ultimately won. Kingdom Holding, the vehicle for the investment, subsequently cashed in the stake.
There are broader concerns being voiced by DMGT about the fact that sovereign wealth, either directly or via investments in private equity funds, is a growing force in finance from which news publishers should not be completely cut off.
For instance the specialist online publisher Politico is owned by the German publisher Axel Springer, which in turn is controlled by the buyout giant KKR. In common with most large private equity firms, KKR has raised billions from sovereign wealth in recent years.
A DCMS spokesman said: “It is vital that we protect our newspapers and news magazines from foreign state interference given the unique role these publications play in our democracy.
“The new measures will only apply to foreign states, foreign state bodies and connected individuals and will include a specific exemption for state owned investments, for example sovereign wealth funds, of a very low level.
“The measures are still in active development, but we are committed to ensuring that they do not have undesired effects on wider foreign business investment in UK media.”
Spokesmen for News Corp and DMGT declined to comment.
Wed, 17 April 2024
telegraph newspaper
Curbs on foreign state ownership of British news outlets designed to block the UAE bid for The Telegraph are in line to be weakened following an outcry from owners including Rupert Murdoch.
Officials have been warned against the “unintended consequences” of new laws if drawn too strictly by lobbyists for the media mogul and his rival Lord Rothermere, the owner of The Daily Mail.
Mr Murdoch’s holding company News Corp, which is listed in New York, is understood to be concerned that its shareholders could inadvertently breach a proposed 5pc cap on foreign state shareholdings.
Both News Corp and DMGT, Lord Rothermere’s company, are also said to have protested that very strict legislation could cut them off from future opportunities for outside investment that would not involve state influence over their newspapers.
Media mogul Rupert Murdoch's company News Corp has raised concerns over strict ownership legislation - Mike Segar/Reuters
Titles owned by News Corp and DMGT, a potential bidder for The Telegraph, were vocal opponents of the UAE-backed bid from RedBird IMI. The fierce public controversy that led to the planned laws on foreign state ownership of the media, which have effectively killed the bid. The Telegraph is now expected to go up for sale again in the coming weeks.
Department of Culture officials are racing to draw up legislation after the House of Lords last month forced ministers to act against the takeover attempt. RedBird IMI is three-quarters funded by Sheikh Mansour bin Zayed Al Nahyan, vice president of the United Arab Emirates, and there were concerns about what the bid could mean for press freedoms.
An amendment to the Digital Markets Bill is being prepared to outlaw foreign state control or influence over newspapers and news websites. However, exceptions are being prepared via secondary legislation and the details of this are the focus of wrangling.
Sources said that the Government was preparing a consultation on its plans in the coming weeks that is expected to lay the ground for a softer regime.
A source involved in the ongoing discussions said: “This is a narrow intervention meant to safeguard The Telegraph that has sector-wide consequences.”
Ministers previously told parliament that the only allowable exceptions would be for passive stakes capped at 5pc. News Corp is said to be arguing that the cap is too low, partly because US rules do not require investors to disclose stakes below 5pc.
News Corp previously won investment from a Saudi prince, Al Waleed bin Talal. The stake proved crucial in the battle for control that Mr Murdoch faced as a result of the phone hacking scandal, and ultimately won. Kingdom Holding, the vehicle for the investment, subsequently cashed in the stake.
There are broader concerns being voiced by DMGT about the fact that sovereign wealth, either directly or via investments in private equity funds, is a growing force in finance from which news publishers should not be completely cut off.
For instance the specialist online publisher Politico is owned by the German publisher Axel Springer, which in turn is controlled by the buyout giant KKR. In common with most large private equity firms, KKR has raised billions from sovereign wealth in recent years.
A DCMS spokesman said: “It is vital that we protect our newspapers and news magazines from foreign state interference given the unique role these publications play in our democracy.
“The new measures will only apply to foreign states, foreign state bodies and connected individuals and will include a specific exemption for state owned investments, for example sovereign wealth funds, of a very low level.
“The measures are still in active development, but we are committed to ensuring that they do not have undesired effects on wider foreign business investment in UK media.”
Spokesmen for News Corp and DMGT declined to comment.
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