Stay informed with free updates
Simply sign up Media myFT Digest – delivered straight to your inbox.
The UK is considering doubling a proposed limit on foreign state ownership of news outlets in the country in response to concerns that setting the bar too low would unnecessarily stifle deal-making in the media industry.
A Labor government may allow stakes as large as 10 per cent, much higher than the 5 per cent level the previous Conservative administration was consulting on, according to people familiar with the matter.
In March last year, the Conservative Party changed the law to prevent foreign countries from owning stakes in British news organizations for the first time, a move aimed at preventing the takeover of The Telegraph by a US investor backed by the United Arab Emirates.
The ministers intend to provide an exception to the ban for small stakes below a certain limit to allow passive investment, especially in listed media companies, from sovereign wealth and government pension funds. Consultations on setting the 5 per cent level were ongoing when Labor ousted the Conservatives in the UK general election in July.
One person familiar with the current government's thinking described 10 percent as a “reasonable” level, adding: “It's all about finding the balance that allows deals to be done without giving any editorial control or influence to foreign countries.”
The Department for Digital, Culture, Media and Sport said: “We have not made any final decisions on the level of exemption for ‘state-owned investors’ from the new foreign newspaper regime. We are still studying the consultation responses and will make an announcement in due course.”
The Telegraph remains without a permanent owner after the Barclay family lost control of the company due to unpaid bank debts, but an attempt to buy the group by RedBird IMI has been blocked by a ban on foreign state ownership. RedBird IMI is a joint venture between US fund manager RedBird Capital and Abu Dhabi-owned media investment company IMI.
RedBird Capital could still take a stake in Telegraph separate from its partnership with IMI, people close to the sale said.
British media groups in particular have raised concerns with the government that setting the threshold too low could prevent it from being able to tap sources of funds from cash-rich countries in the Middle East. When the Telegraph first went on sale in 2023, for example, it was The owners of the Daily Mail have held talks With investors from Qatar about the possibility of cooperating in an offer.
Media executives are also concerned that the law will hurt government pension funds, such as the huge Norwegian, Canadian and Australian funds that contribute to listed media companies.
Labour's decision on where to set the ownership threshold could be controversial given last year's fierce debate among MPs over the dangers of allowing foreign countries the ability to exert influence over the British media.
Parliamentarians from both major parties have criticized RedBird IMI's bid, as have executives at Telegraph itself. Among anxious Conservative MPs, the main worry was the potential outside control of a right-wing newspaper seen as influential in their contests for the party leadership.
The sale of The Telegraph, which has led to intense scrutiny over press freedoms in Abu Dhabi itself, has strained relations between the UK and the UAE, a major investor in Britain.
Emirati officials have expressed frustration at disparaging comments made about their country by a series of British politicians in relation to the proposed Telegraph deal. Former Conservative leader Sir Iain Duncan Smith was among the MPs who argued that the UAE's participation would raise “security concerns” despite the two countries' defense ties.
Prime Minister Sir Keir Starmer traveled to Abu Dhabi last month in the hope of resetting relations.
