Minister Contemplates Investigation into Telegraph Sale amidst Concerns Raised by Ofcom
The proposed takeover of the Telegraph Media Group by a United Arab Emirates (UAE)-backed fund has raised concerns among regulators and prompted the Culture Secretary, Lucy Frazer, to contemplate further intervention. Ofcom, the watchdog responsible for overseeing the communications industry in the UK, has expressed worries that the merger may work against the public interest by compromising accurate news reporting and free expression.
In response to Ofcom’s concerns, Ms. Frazer has indicated that she is inclined to refer the deal for a Phase 2 probe. This decision comes after the parties involved in the proposed merger were given a week to respond to the watchdog’s concerns. Following their responses, Ms. Frazer will make a final decision regarding whether to proceed with the investigation.
Last year, a deal was struck between RedBird IMI, an Abu Dhabi-backed fund, and the previous owners of the Telegraph, the Barclay family. The deal involved paying off debts owed to Lloyds Bank and resulted in RedBird IMI gaining control of not only the Telegraph Media Group but also The Spectator. RedBird IMI is majority-owned by Sheikh Mansour bin Zayed Al Nahyan, the vice president of the UAE and the owner of Manchester City Football Club.
The government had previously triggered a Public Interest Intervention Notice to investigate the potential impact of the takeover on press freedom when the deal was first announced. In January, a fresh intervention was launched when the proposed owner unveiled a new corporate structure for the takeover. Both Ofcom and the Competition and Markets Authority (CMA) have now reported back to Ms. Frazer.
The CMA has stated that it does not believe the proposed merger will result in a significant reduction in competition within the UK. However, Ofcom has found that there is a possibility that the merger could operate against the public interest, particularly in terms of accurate news reporting and the free expression of opinion in the Telegraph newspapers. Ms. Frazer has stated that she will publish the reports from Ofcom and the CMA at a later date.
Based on the concerns raised by Ofcom, Ms. Frazer has indicated that she is inclined to refer the merger for a Phase 2 investigation. However, before making a final decision, she is required by law to allow the parties involved to make representations. The parties have been given until March 25 to respond.
The investigation into the proposed merger is running parallel to the government’s plan to ban foreign powers from controlling British newspapers and magazines. The government has pledged to introduce new legislation that expands the definition of “foreign powers” and prohibits them from owning or controlling UK-operating news publishers. This move comes after demands from peers for Parliament to have the power to block such acquisitions.
In response to criticisms of a potential double standard regarding Sheikh Mansour’s ownership of Manchester City Football Club and his potential ownership of the Telegraph, Ms. Frazer has emphasized the importance of a free press in the UK. She stated that it is inappropriate for the UK government or a foreign state to own a newspaper, but that foreign investment in other areas, such as football, is welcome.
As the investigation progresses and more details emerge, it will be crucial to assess the potential impact of the proposed merger on press freedom and the accurate presentation of news in the Telegraph newspapers. The government’s commitment to protecting the public interest and ensuring a diverse and independent media landscape will be closely watched by industry experts and observers alike.
(PA Media contributed to this report)
