UK to allow foreign states 15% stake in newspapers

Foreign states will be allowed to own up to 15% of British newspapers and news magazines under new laws.

The move follows a takeover bid of the Telegraph and the Spectator by RedBird IMI last year, backed by the Abu Dhabi ruling family, which led the then Tory government to ban foreign-state ownership of UK papers, after an outcry from parliamentarians.

But under a law change announced on Thursday, State Owned Investors (SOIs) - including sovereign wealth funds, public pension or social security schemes - will be able to take a stake in UK newspapers.

Culture Secretary Lisa Nandy said the changes would protect "media plurality" while helping cash-strapped publishers "raise vital funding".

Following a consultation on the ban, Labour said that many newspaper groups believed a complete ban was too restrictive for securing financing.

Ministers set the threshold for SOIs at 15% of shares or voting rights in a newspaper or news magazine as it was "the most effective, simple and proportionate approach".

The ban was introduced after Lloyds Bank seized the Telegraph and its sister magazine the Spectator from the Barclay family in June 2023 in order to claw back £1bn of debts from its former owners.

Sheikh Mansour bin Zayed Al Nahyan, best known in the UK for his ownership of Manchester City football club, threw his considerable financial heft behind a £600m bid by US-firm RedBird to take over the titles.

But panic over foreign control of two major UK newspapers led Parliament to enact the Digital Markets, Competition and Consumers Act 2024 - which prevents foreign states from acquiring ownership, control or influence over UK newspapers and news magazines.

The Spectator was then sold last year for £100m to Sir Paul Marshall, the hedge-fund billionaire, who has installed Lord Gove, the former cabinet minister, as its editor.

In a statement, Nandy said: "Britain's free and independent press is a national asset like no other and it is right that we have strong measures in place to allow scrutiny of UK takeovers that might go against the public interest.

"We are fully upholding the need to safeguard our news media from foreign state control whilst recognising that news organisations must be able to raise vital funding.

"We are taking a proportionate, balanced approach to a threshold for low-risk investments that will remove a potential chilling effect on press sustainability."