Why Shouldn't Abu Dhabi own the Telegraph?
What really lies behind the campaign against the Middle Eastern-backed bid for the British newspaper. And how China's extraordinary green transition presents Europe with an acute dilemma
Britain used to pride itself on its openness to foreign investment. For decades it has allowed foreigners to build its infrastructure, provide its services and buy its leading companies. While the French declared yoghurt a strategic sector, Britain boasted of the Wimbledonisation of the City of London in which all the top players were from overseas. Yet Britain’s taste for open markets may have finally found its limits in, of all places, the newspaper industry. A bid by an Abu Dhabi-backed entity for the Telegraph newspapers and Spectator magazine has turned some of Britain’s most fervent free marketeers into frothing protectionists. A ferocious campaign is underway in parliament and the media to convince the government to block the deal.
Of course, those calling for the deal to be blocked insist there is no contradiction. They argue that what they object to is not the nationality of the bidder but the fact that the bulk of the money is coming from International Media Investments (IMI), a fund controlled by Sheikh Mansour bin Zayed al-Nahyan, a member of the Abu Dhabi ruling family and deputy prime minister of the United Arab Emirates. That, they say, is tantamount to a takeover by a foreign government, and an undemocratic one at that. It is one thing Mansour owning Manchester City football club, quite another taking a 75 per cent stake in a newspaper, where he might try to influence its editorial coverage, as he has done at other media brands that he owns.
If this is what lay in store for the Telegraph and Spectator, the critics might have half a point. Of course, a true free marketeer might argue that the British media is competitive enough to withstand such a takeover given that a wide range of global news providers, broadcasters and new digital entrants are fighting for audience share. They might argue that the rest of the media would quickly call out evidence of censorship, while providing alternative sources of reliable information. Others might question how much editorial freedom in any case currently exists at the Telegraph or indeed many other British newspapers, where coverage of important issues is often skewed by the political and commercial interests of their owners.
Passive Aggressor
Nonetheless, all this is beside the point, since there is no prospect of Abu Dhabi getting editorial control of the Telegraph and Spectator. That is because what is being proposed is a private equity deal in which Mansour’s IMI would be a purely passive investors. There is nothing unusual about that. In a private equity deal, there are two classes of investor: the private equity firms, which are known as general partners (GPs), whose job is to identify targets, negotiate deals and oversee operations andfor which they receive a management fee plus carried interest, typically the first 20 per cent of any profits on the deal; and limited partners (LPs), typically pension funds, insurance companies and high net worth individuals, with no rights other than to decide whether to participate in future capital calls or agree to a sale.
In this transaction, the original plan was for the GP to be RedBird IMI, a joint venture between RedBird and Mansour’s fund. That gave spurious credibility to the idea that Abu Dhabi might influence over operations. In reality, this made ono sense. The whole point about private equity is that these are not long-term investments. Given that RedBird will not get paid until it has sold the Telegraph and Spectator at a profit, it is hardly likely to allow the value of the brands - and its own reputation as a deal-maker - to be destroyed by allowing IMI to meddle with operational decisions from which it is legally excluded. Nonetheless, the deal was restructured so that Redbird, not the joint venture, is now the GP, according to someone familiar with the situation.
Meanwhile RedBird has committed to establish an independent trust consisting of senior industry figures who will have legally binding powers to guarantee editorial independence and approve the appointment of an editor. Yet this has been dismissed by critics as not worth the paper it is written on. In a punchy interview on Newsnight last week, Andrew Neil, the current publisher of The Spectator, claimed that a similar arrangement at The Times and The Sunday Times, where he was once editor, had failed to constrain Rupert Murdoch. He neglected to mention that a powerful editorial trust has played a valuable role over the years in preserving the editorial independence of another publication where he once worked, The Economist.
But Neil was wrong about the Times board too. In 2012, the independent directors delayed John Witherow’s appointment as editor for months, amid concerns about his independence. In fact, those fears proved unfounded. Not only was Witherow a brilliant editor of The Times but he was the only Murdoch editor with the courage to resist intense corporate pressure to back Brexit. What’s more, when I was at The Times, senior executives used to continually complain that the directors were thwarting efforts to adapt to a changing media landscape. That obstacle was finally removed in 2022 after the directors advised the government to release News Corp from the undertakings given by Murdoch in 1981. As someone close to the process said to me, “If the Times thinks the answer is to turn itself into the Daily Mail, why should the board stop them?” Many Times readers may take a different view.
Vested Interests
But if there is no threat to editorial independence, why is there so much opposition to the deal? Part of the answer is a lack of understanding of how private equity works. So too is commercial rivalry which has played a role in how the deal has been reported. Sir Paul Marshall, the billionaire owner of GB News which provides lucrative employment for a stable of influential Telegraph commentators and Tory MPs, was considered the frontrunner to buy the titles until Redbird circumvented the auction by agreeing to pay off the £1 billion debt owed by Barclay family, the current owners, to Lloyds Bank in return for an option to buy the publications. The Daily Mail was also a bidder for the Telegraph, while Rupert Murdoch has long coveted The Spectator. RedBird was never going to get a fair hearing from much of the British press.
But the real opposition to RedBird is clearly ideological. Neil gave the game away on Newsnight when he embarked on a bizarre ad hominem attack on Jeff Zucker, the former chief executive of American TV network CNN who is leading the bid for Redbird. The American, he said, had no knowledge of Britain, or newspapers, or magazines. What’s more, Neil insisted, Zucker is a left-wing Democrat (though Zucker has never revealed how he votes), who dragged CNN to the left and was bound to do the same to the Telegraph and Spectator. As such, Neil declared, Zucker was not a fit owner of “these two vital centres of mainstream centre right thought”.
Leave aside the effrontery of Neil, who reacts with fury whenever anyone on social media dares to suggest on the basis of his journalistic record that he is a right-wing Brexiteer, claiming to know how another journalist votes. What Neil and his allies in the right-wing media who have devoted their careers to arguing for the bracing effect of free market capitalism for everybody else appear to be saying is that an exception should be made for the Telegraph and Spectator because without it the delicate flower of right-wing thought in Britain would wither. Perhaps he fears that without government protection, right-wing thought in Britain would disappear like Marxism to the margins, left with only the Daily Mail and The Times to sustain it.
A government with a genuine commitment to open markets would treat this special pleading with the contempt it deserves. Instead, ministers seem determined to kick the bid into the long grass, binding it in regulatory weeds, too terrified to stand up to right-wingers who are already plotting to bring down the prime minister. The irony is that RedBird may be the first owner of the Telegraph in decades that genuinely cares about editorial standards, rather than pursuing a political agenda. In the midst of a global media bloodbath, with even the billionaire owners of the Los Angeles Times and Washington Post cutting their losses, here is a deep-pocketed investor willing to bet the other way. Anyone who really cares about journalism would bite its arm off.
China’s Extraordinary Green Transition
There are lots of factors that lie behind the wave of protests by farmers that have been sweeping Europe in recent months and which this week roads blocked by tractors in France, Belgium, Portugal and Spain. These include a reduction in fuel subsidies, higher input costs, lower market costs, new environmental rules eliminating certain pesticides, opposition to free trade deals and cheap competition from abroad, not least from grain imported from Ukraine. Yet that has stopped much of the media labelling the protests as “anti-green” and part of a backlash against net zero. Such is the anxiety among political leaders that Ursula von der Leyen, the European Commission president, has come under pressure from her conservative allies to water down planned new emissions targets or risk fuelling support for the far right.
But while it is easy enough to understand the short-term politics of this, what about the the long-term economics? Too often, the transition to clean energy and net zero is portrayed, particularly on the right, as an act of self-indulgence. Taking action to reduce emissions is portrayed as western virtue signalling that will hit the pockets of ordinary people while doing nothing to solve the underlying of problem of global warming while China continues to build the equivalent of two new coal power plants per week. The 106 gigawatts (GW) of new coal power capacity that China agreed last year is the equivalent of about half of the U.S.’s total coal capacity.
Yet this narrative only tells half the story of China’s energy sector. A report published last week by the Centre for Research on Energy and Clean Air (CREA), a Helsinki-based think-tank, highlights the astonishing progress that China is making on its own transition to clean energy. Thanks to a surge in investment in what Chinese officials call the “new three” of solar power, batteries and electric vehicles, total clean energy investment in China hit 6.3tn yuan ($890bn) in 2023. That is the equivalent to the GDP of Switzerland or Turkey and almost as large as total global investments in fossil fuel supply last year. Clean energy is now the largest driver of China’s economic growth, accounting for 40 per cent of the expansion of GDP in 2023. China added more solar power capacity last year than American has in its history and is on target to hit 1,200 GW of wind and solar capacity by the end of this, six years ahead of the official target.
This surge in investment has important implications for Europe and the rest of the world. Much of it is being driven by Beijing’s need to find new sources of growth to make up for the implosion of its property sector. Already this increased Chinese production is driving down global prices, with the cost of solar panels falling 42 per cent year-on-year and battery prices falling by 50 per cent. The International Energy Agency, in its latest report, reckoned that if solar and battery technology was deployed in line with increased manufacturing capacity, then global power sector coal use and carbon dioxide emissions could be 15 per cent lower in 2030 than the base case. China’s own emissions are now thought to have peaked last year.
But while China’s green energy boom is great news for the planet, it presents Europeans with a dilemma. Already the solar power industry, a technology that originated in Europe, has been lost to China. Now it looks as if China will dominate the market for EVs, batteries and other critical technologies too. Are Europeans willing to accept cheap Chinese production as a way of cutting the cost of their own green energy transition, even if that means allowing China to become ever more deeply integrated into critical supply chains? Or will they seek to diversify their supply chains, even if that means providing expensive subsidies and imposing trade barriers that pile on costs for its citizens and risk leaving Europe further behind?
As European governments come under pressure to row back on their own green targets to appease protesters, thereby undermining investment incentives for their own domestic companies, this dilemma is sure to loom ever larger. Yet politicians are struggling to explain these trade-offs to voters. Of course, their task is made harder by the willingness of parts of the media to indulge climate change denialism and promote an anti-clean energy, pro-fossil fuel agenda - not least those two “centres of mainstream centre-right thought”, The Telegraph and The Spectator.