“Journalists, media watchers and Conservative MPs have expressed concerns about the takeover of The Telegraph.”
Abu Dhabi’s media record is under the microscope again with the prospect of a deal that would give an investment fund owned by a senior member of the UAE’s ruling family control of an influential UK newspaper.
The US-based Redbird IMI, which is the media investment arm of Abu Dhabi, has offered to pay off the debts of the Barclay family, owners of The Telegraph Media Group, amounting to £1.1 billion owed to Lloyds Banking Group.
The possibility that The Telegraph Media Group may become under the control of Gulf investors for the first time in its 168-year history has raised concern among members of the ruling Conservative Party and raised alarm bells about freedom of expression.
Twin brothers Frederick and David Barclay bought Telegraph Group Publications in 2004 for £665 million.
RedBird International Media Investments (IMI), headed by former CNN boss Jeff Zucker, will convert the loan into ownership of The Telegraph Media Group, which includes the Sunday Telegraph and the weekly Spectator magazine.
The Telegraph is the newspaper of Britain’s ruling Conservative Party and is described as the preferred megaphone for the British military and intelligence establishment. In addition, virtually all Conservative prime ministers have been on its books, with Winston Churchill serving as a war correspondent and, more recently, Boris Johnson.
It is noteworthy that there are many Gulf investments in the media industry in the UK, as an investor from Saudi Arabia owns a stake in London’s Evening Standard and The Independent.
An Emirati investment fund announced that it has paved the way for the acquisition of The Telegraph newspaper and The Spectator magazine after reaching an agreement with their previous owners to pay off the debts owed to them.
RedBird IMI, a joint venture between RedBird Capital led by former CNN director Jeff Zucker and Abu Dhabi International Media Investments (IMI), said it had agreed to provide loans to the British Barclay family and guarantee the payment of the family’s debts to Lloyds Bank.
The Barclay family owned the prestigious right-leaning newspaper and the weekly magazine before they were placed under receivership, according to what was reported by the Associated Press.
Last June, Lloyds Bank and its subsidiary, Bank of Scotland, indicated that they intended to put the group up for sale to pay off outstanding debts.
Last October, the Barclay family tried, unsuccessfully, to make a last-minute offer to pay off its debts and regain control of the group, according to British media.
Redbird IMI stated that it would provide loans worth £600 million in exchange for the two publications.
The UAE fund said, “The deal includes an option to convert loans into shares, which gives it ownership of the newspaper and magazine.”
Former Conservative Party leader Nadhim Zahawi is playing the role of mediator and is likely to become head of the new group, The Times reported.
According to media reports, UAE Deputy Prime Minister and owner of Manchester City Football Club, Mansour bin Zayed, is directly involved in financing the deal through his investment arm (IMI).
The company is also overseen by Sultan Al Jaber, a technocrat who also runs the National Oil Company and recently chaired the UAE’s hosting of the COP 28 climate summit.
IMI controls several local companies, including The National newspaper, Sky News Arabia TV channel, an Arabic-language news joint venture with Sky in the UK, and the CNN Business Arab online platform.
Abu Dhabi entities have also built business partnerships with international media brands, such as CNN and CNBC, to expand the volume of international reporting outside the capital and increase their soft power.
In response to this, The Guardian reported that British lawmakers belonging to the Conservative Party raised national security concerns and called on the government to scrutinize the potential deal.
In a letter addressed to the British Deputy Prime Minister, Oliver Dowden, the Culture Secretary, Lucy Frazer, and the Business and Trade Secretary, Kemi Badenoch, Six Conservative MPs called on the government to intervene under the National Security and Investment Act to further scrutinize the proposed deal.
They said, “Influence over a quality national newspaper being passed to a foreign ruler at any time should raise concerns and must be investigated.”
Last month, the UK government announced the start of an investigation into the loan-for-shares offer, with questions raised about whether using foreign sovereign wealth to acquire an influential media group poses a risk to British national interests.
On December 1, the UK government decided to prevent Abu Dhabi-backed Redbird IMI from completing the deal due to concerns related to freedom of expression, while the takeover bid was subject to scrutiny by regulators.
Culture Secretary Lucy Frazer issued an executive order preventing any transfer of ownership of The Telegraph Media Group without her permission and also halting any changes to its structure or senior editorial staff.
Earlier, the UK Office of Communications (Ofcom) published an invitation to comment on the proposed deal by December 13.
Former journalists in one of the media institutions owned by the Emirati showrunner (The National) also said that they suffered from a culture of fear that limited freelance journalistic work.
Human rights groups have pointed to the UAE’s intolerance of domestic dissent and suppression of freedom of expression, noting that this may be reflected in its control of high-profile media outlets in Britain.
Amnesty International said the takeover could have serious repercussions on media freedom in the UK.
In a related context, former British Foreign Secretary William Hague called for not allowing the UAE to own media assets in Britain.
He added, “Even if the UAE is an impressive country, it is not right to hand over and sell British media assets to a foreign country.”
On her part, Camilla Tominey, associate editor of The Telegraph, said she was confident that the UK government would move to block the deal due to concerns about freedom of expression.
The Telegraph itself also published an article entitled Our independence must be guaranteed, and in the subtitle, the article said, “The Telegraph’s readers need to be reassured about how the paper’s continued independence can be sustained.”
The reasons for this concern are due to previous experiences of several British media outlets owned by the ruler of the Emirates, Mohammed bin Zayed, in which censorship and selective coverage of news was practiced, according to The Times.
The biggest example of this is the bias practiced by The National newspaper, which is affiliated with the investment fund of the Ruler of Abu Dhabi.
The Times referred to several examples, including the sexual harassment incident against an employee who participated in preparing for a literary festival in Abu Dhabi in 2020, when the newspaper did not publish the news at all at the time.
In response to the concerns of British officials, the American company pointed out that after the transfer of ownership, it will assume sole administrative and operational responsibility for the two versions under the leadership of CEO Jeff Zucker.
RedBird IMI confirmed that it is fully committed to maintaining the current editorial team of The Telegraph and The Spectator and that it believes that the editorial independence of these titles is necessary to protect their reputation and credibility.
British writer Peter Oborne raised questions about the deal if it was completed and the Emiratis took over the most prestigious British newspapers, including whether the newspaper could be under the ownership of a country like the UAE, which is ranked 119th in the World Press Freedom Index.
In turn, journalist Ahmad al-Khaled explained in a statement to Al-Estiklal that, “In general, when a country buys a high-profile media platform in another country, it is for the purpose of serving political and economic interests and influencing public opinion of its interests as part of soft power.”
He added, “This was done by following an editorial line consistent with internal and foreign policy, and this may include not publishing critical articles that are not consistent with that vision.”
Mr. al-Khaled also stated that “the media in the West contributes to policymaking and also directs government decisions. Therefore, there are ongoing Emirati efforts to buy shares in Western media, websites, or newspapers to polish the image and communicate viewpoints, in addition to exploiting them as a platform against political opponents.”
Abu Dhabi has sought to invest windfall oil and gas revenues in new sectors of the global economy, from healthcare and technology to logistics and financial services.
“The basic principle for Middle Eastern investors in media and other assets in the UK is to recycle flows of petrodollars to safe haven countries,” said Alice Enders, a British media analyst.
Investments in the UK have soared since the UK established a sovereign partnership with the UAE, with more than $10 billion planned over five years in the first two years, people familiar with the matter said.
People close to the sale said the UK government wants to avoid a clash next week when it hosts an investment summit to attract outside money. This event is sponsored by Lloyd’s and is expected to be attended by representatives from Abu Dhabi.
An initial sum of £800 million has been agreed upon by Mubadala to invest in life sciences in the UK, including in some of the most promising UK start-ups.
One person said: “There is so much Abu Dhabi money lying around the UK that it is difficult to decide what is acceptable and what is not.”
In a related context, the Emirati company Aldar Properties acquired the British real estate development company London Square, in a deal that cost Abu Dhabi $291 million.
This deal is the first of its kind for the Emirati company outside the Middle East.
In a joint statement on December 1, the two companies said that the deal would benefit sales in general, given the potential to benefit from cross-selling across the customer base of both companies.
Sheikh Tahnoun bin Zayed, the UAE National Security Advisor, invests 26% in Aldar Properties, in addition to 25% belonging to Mubadala Investment, a sovereign fund in Abu Dhabi.
The deal is a reflection of an Emirati effort to acquire regional and global deals in order to transform its local companies into an influential force.