Telegraph Takeover Deal Seen as Fight for the Heart of U.K. Conservatives

The Daily Telegraph has long been viewed as the house paper of Britain’s Conservative Party. So, it’s perhaps not surprising that a takeover battle for the 168-year-old paper has mutated into a political struggle within the Tory ranks — one that some commentators have gone so far as to cast as a contest for the party’s future.

On one side is an Arab American group trying to complete its acquisition of the Telegraph Media Group. It is fronted by Jeff Zucker, a former president of CNN, and is backed by Sheikh Mansour bin Zayed al Nahyan, the vice president of the United Arab Emirates and a member of the royal family of Abu Dhabi.

On the other side is a would-be spoiler, Paul Marshall, a right-wing hedge-fund founder who has bankrolled GB News, an upstart television news channel that has emerged as a kind of aspiring Fox News, giving a platform to far-right Tory lawmakers like Jacob Rees-Mogg and populist firebrands like Nigel Farage.

Mr. Zucker’s group, RedBird IMI, has been seeking regulatory approval for its acquisition of The Telegraph and its sister commentary magazine, The Spectator. But objections to permitting a foreign state entity — one with a dubious record on press freedom and protecting civil liberties — to take control of one of Britain’s most influential papers have bogged down those efforts.

On Friday, the British government put off a decision on whether to greenlight or block the deal, under which The Telegraph’s previous owners, the Barclay brothers, transferred control of the company to RedBird IMI in return for its paying off 1.16 billion pounds ($1.47 billion) in Barclay debt.

Analysts said the delay, until March 11, could help the Emirati-backed group make a stronger case that it would be a responsible, hands-off owner. It has submitted a new corporate structure, which emphasizes that the Emiratis would be passive investors. But the government’s review of this structure could also give Mr. Marshall time to drum up support for a competing bid.

Either way, the delay will prolong a power struggle that has drawn in an array of Britain’s most prominent right-leaning politicians, not to mention some of its most visible media figures. All of this is playing out against the backdrop of an unpopular Conservative Party, led by Prime Minister Rishi Sunak, who faces lawmakers nervous about losing their seats in an election later this year.

“This is the first media transaction in many years to become a battle within the Tory Party, as well as in the paper itself,” said Claire Enders, a media analyst based in London and the founder of Enders Analysis. “The struggle is bizarrely for what appears to the Tory Party to be its heart and soul.”

Charles Moore, a columnist and former editor of The Telegraph who opposes the RedBird deal, said, “It is a clash inside the Tory Party and the government about how much this matters, and whether they would be better off accepting the offer, since the Arabs are major investors in the country.”

The takeover has cleaved the Conservative Party along familiar lines, between its more centrist establishment, much of which is open to the Emirati-backed offer, and its right-wing flank, which leans toward Mr. Marshall.

RedBird Capital, for example, has recruited two former chancellors of the Exchequer, George Osborne and Nadhim Zahawi, to advise it. But it also has outspoken opponents, including Iain Duncan Smith, a former Conservative Party leader.

In November, Mr. Duncan Smith told The Observer: “I would just be very concerned to see one of the papers of record in the U.K. come under the control of somebody in the Middle East. It just seems bizarre to me.”

There is also fierce opposition to the deal in the top ranks of The Telegraph and The Spectator. Andrew Neil, a prominent broadcaster who is the chairman of The Spectator, told the BBC on Thursday, “If RedBird takes it over, I’ll be gone.”

In a subsequent interview, Mr. Neil said RedBird’s effort to change the corporate structure was a miscalculation.

“All that’s happened is that the government has said, in that case we need to start the whole regulatory process again,” Mr. Neil said. “They really are the gang that couldn’t shoot straight and show their total ignorance of Britain at every turn.”

Fraser Nelson, the editor of The Spectator, wrote in a column for The Telegraph on Friday that allowing the Emirati-backed deal to go through would be a victory for Russia because the Emiratis, while allies of Britain, are also “proud, flag-waving ‘dear friends’ of Putin.” He continued, “Should this give us pause?”

Others argue, however, that the intense regulatory scrutiny on RedBird would make it difficult for the new owner to meddle too much with the paper’s coverage. The group has proposed putting in place an editorial charter and trust that it says would safeguard the paper’s independence.

A spokesman for RedBird IMI said the “group remains committed to acquiring and investing in The Telegraph, and reiterates that maintaining the editorial independence of the newspaper is essential to protecting its reputation, credibility and value.”

Under the ownership of Mr. Marshall, analysts said, the paper would most likely move closer to GB News, which promotes the right flank of the Conservative Party, and populist figures like Mr. Farage, who remains closely associated with an anti-immigration party, Reform U.K., that he helped found.

“GB News is a political project,” said Peter Oborne, a former chief political commentator for The Telegraph. “They’re about influencing British politics and advancing the interests of very wealthy people.”

While the battle over its ownership rages, The Telegraph’s political coverage has been making waves. The paper recently published a column by a former cabinet minister, Simon Clarke, in which he called on fellow Conservatives to oust Mr. Sunak as party leader or face electoral annihilation later this year.

Mr. Clarke’s column came days after a poll, which The Telegraph commissioned from the public opinion research firm YouGov, predicted that the opposition Labour Party would sweep to power over the Conservatives in a general election by a margin comparable to Labour’s dramatic landslide in 1997.

The poll predicted that the Conservatives would lose every seat in the old Labour “red wall” stronghold that they won in 2019 under Prime Minister Boris Johnson. And it said that nearly a dozen cabinet ministers, including the current chancellor of the Exchequer, Jeremy Hunt, would lose their seats.

For The Telegraph to antagonize Mr. Sunak while his ministers are reviewing the sale of the paper struck some observers as puzzling. But former Telegraph employees said the decision was in character for the paper’s independent-minded editor, Chris Evans, who has kept his distance from the drama swirling around the company.

By provoking Mr. Sunak, some said, The Telegraph was also serving notice that it was a force. While the paper’s close ties to the party have turned its fate into a Tory drama, some argue that the party’s role is ultimately a sideshow.

“I’ve never known the Tory Party, as opposed to government, to determine who gets to buy a newspaper, other than insisting that some are unsuitable,” Mr. Neil said. “Sometimes they succeed in blackballing; sometimes they don’t. It’s not their decision.”

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