Foreign States Allowed to Own 15% of British Newspapers and News Magazines Under New Laws
Foreign states will now be permitted to own up to 15% of British newspapers and news magazines following a recent change in legislation. This development comes in the wake of a controversial takeover bid of the Telegraph and the Spectator by RedBird IMI, backed by the Abu Dhabi ruling family last year. The bid sparked outrage among parliamentarians, prompting the then Tory government to impose a ban on foreign-state ownership of UK papers.
Background
The ban on foreign-state ownership was a direct response to the takeover bid of the Telegraph and the Spectator by RedBird IMI, which was supported by the Abu Dhabi ruling family. This move by a foreign entity raised concerns about the potential influence of external actors on British media.
However, in a surprising turn of events, a law change was announced on Thursday, allowing State Owned Investors (SOIs) such as sovereign wealth funds, public pension schemes, or social security schemes to acquire a stake in UK newspapers. This policy shift aims to strike a balance between protecting “media plurality” and enabling struggling publishers to secure essential funding.
Labour’s Response
Following a consultation on the ban, the opposition Labour party highlighted that many newspaper groups viewed a complete prohibition on foreign-state ownership as overly restrictive in terms of accessing financial support. As a result, ministers decided to set the threshold for SOIs at 15% of shares or voting rights in a newspaper or news magazine, deeming it the most effective and proportionate approach.
Implications of the Ban
The ban on foreign-state ownership was initially enforced after Lloyds Bank seized control of the Telegraph and the Spectator from the Barclay family to recover debts amounting to £1 billion. Sheikh Mansour bin Zayed Al Nahyan, renowned for his ownership of Manchester City football club, was involved in a bid to acquire these media titles, raising concerns about foreign control of prominent UK newspapers.
Subsequently, the Digital Markets, Competition and Consumers Act 2024 was enacted by Parliament to prevent foreign states from gaining ownership, control, or influence over UK newspapers and news magazines. This legislation aimed to safeguard the independence and integrity of the British press.
Cultural Secretary’s Statement
In response to the new laws, Culture Secretary Lisa Nandy emphasized the importance of preserving the free and independent press as a national asset. She stated that while measures are in place to prevent foreign state control of UK media, provisions have been made to facilitate necessary funding for news organizations. Nandy highlighted the government’s commitment to maintaining a balanced approach that supports press sustainability while mitigating potential risks.
Conclusion
The recent changes in legislation allowing foreign states to own up to 15% of British newspapers and news magazines mark a significant shift in the regulatory landscape of the media industry. While the move aims to address financing challenges faced by publishers, concerns about maintaining editorial independence and media plurality remain paramount.
FAQs
1. What prompted the ban on foreign-state ownership of UK newspapers?
The ban was enacted in response to a controversial takeover bid of the Telegraph and the Spectator by RedBird IMI, backed by the Abu Dhabi ruling family, which raised concerns about external influence on British media.
2. How will the new laws impact media plurality in the UK?
The new laws allowing State Owned Investors to own up to 15% of British newspapers aim to strike a balance between protecting media plurality and enabling struggling publishers to raise essential funding.