The impending auction of the Telegraph titles and The Spectator, following the sudden unravelling of the Barclays family empire, is set to create a bidding war that will fundamentally change the power balance in British media.
Fleet Street rivals could vie with billionaire hedge funders, Gulf-based sovereign wealth funds, European publishing conglomerates and even Silicon Valley tycoons as suitors for what are widely seen as the house journals of the Conservative Party.
Lloyds Banking Group called in receivers to sell Telegraph Media Group (TMG) last week after a dispute with the Barclays over failure to repay debts of nearly £1bn.
How might this play out? One of the more interesting potential buyers touted by media analysts is Paul Marshall, chairman of Marshall Wace, one of Europe’s largest hedge fund groups.
Marshall was a prime mover behind the provocative channel GB News, in which he retains a major stake. He founded the UnHerd website, which delights in challenging the orthodoxies of progressives.
These outlets engage heavily in the culture wars topics that have become a Telegraph staple.
The Telegraph has long courted a presence in television. It once used newsroom studios to film shows hosted by the likes of Simon Heffer and Ann Widdecombe.
An amalgamation with GB News, where well-known Telegraph writers, Camilla Tominey and former associate editor (politics) Christopher Hope, have joined as presenters alongside a raft of Tory MPs, could be a game-changer. It would amplify the Telegraph’s brand reach and might improve the output of a channel that often veers into conspiracy theory and dog-whistle commentary.
But Marshall, underwriting losses at GB News, would not be the most likely buyer. Another predicted bidder is Will Lewis, who edited The Telegraph during the high point of its 2009 exposé of the MPs expenses scandal.
Now a media entrepreneur, he raised funding for the social media-focused start-up The News Movement (TNM), which operates from London with an executive team in New York.
Lewis, former publisher of the Rupert Murdoch-owned Wall Street Journal, might have unfinished business at The Telegraph, but other parties will be better placed. Murdoch himself would probably enjoy adding The Telegraph titles to his stable, 42 years after he controversially bought The Times and Sunday Times. Such a deal would generate a public outcry and regulatory investigation.
But given Murdoch’s history of ruthless price wars aimed at wrecking The Telegraph’s finances, he might see no business sense in owning competitive titles from the same market segments.
Media analyst Claire Enders believes Murdoch would be attracted by The Spectator, which has defied the decline of print to grow its subscriptions and income. That scenario would give the Sun-owner extraordinary sway over the Tory party.
Overseas interest in TMG is anticipated, although the likelihood of a Labour victory in the next election might dampen enthusiasm from the Gulf for owning titles with strong personal ties to Rishi Sunak and Boris Johnson.
Amazon’s Jeff Bezos is already the owner of The Washington Post and could add The Telegraph in a heartbeat, but he might see little value if it faces being consigned with the Tories to the political margin.
When the Barclay twins, Frederick and David, bought The Telegraph titles for £665m in 2004 (with a whopping loan from Royal Bank of Scotland), they beat off competition from the Daily Mail group (DMGT) and German publisher Axel Springer.
Since then, Axel Springer has focused on digital growth, buying the Business Insider and Politico websites. The most likely foreign buyer for today’s Telegraph is the acquisitive Belgian publisher Mediahuis, especially because Murdoch MacLennan, a former TMG CEO, is on its board. Mediahuis, owner of Dutch title De Telegraaf, has already indicated interest.
But for media analyst Ian Whittaker, the “most likely winner” is DMGT, which has a stable that includes Metro, i, and New Scientist, as well as the Daily Mail and Mail on Sunday. Whittaker notes that DMGT already runs The Telegraph’s advertising revenues and would learn from The Telegraph’s success in growing online subscriptions.
He believes it could overcome intervention from the Competition and Markets Authority because Mirror publisher Reach was allowed to buy the Express and Star titles.
Yet, his suggestion of a £500m sale price is far in excess of a previous £200m valuation. DMGT would not pay over the odds for an asset that the Barclays have been trying to sell since at least 2019.
Back in The Telegraph newsroom, TMG CEO Nick Hugh has reassured staff that the financial problems of the Barclays do not reflect the fortunes of the papers. “I want to assure you all that this is a successful, profitable business,” he said. “I don’t anticipate any operational or staff changes.”
In truth, that will be a decision for the next owner.
