UK to allow foreign states to own a 15% stake in newspapers

LONDON (Reuters) -Britain plans to allow state-owned investors to own up to 15% of British newspaper publishers, the government said on Thursday, as part of media reforms that could end long-running uncertainty over ownership of the Telegraph newspaper.

The government will also expand its powers to scrutinise media mergers to include news websites and news magazines.

"These important, modernising reforms are about protecting media plurality and reflect the changing ways in which people are consuming news," Culture Secretary Lisa Nandy said.

"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."

The ownership of the Telegraph, one of Britain's best known newspapers, has raised questions about the independence of the media and foreign states buying political influence.

The government said "targeted exceptions" allowing certain sovereign wealth funds or pension funds to invest up to 15% in British newspaper and periodicals would help sustain the titles while also limiting any foreign influence in media.

Britain's previous Conservative government last year banned foreign state investment in British newspapers, blocking RedBird IMI, run by former CNN boss Jeff Zucker and with the majority of its funding from Abu Dhabi, from owning the Telegraph.

Abu Dhabi-backed RedBird IMI took control of the Telegraph titles and the Spectator magazine in 2023 when it helped repay the Barclay family's 1.2 billion pound ($1.6 billion) debt to Lloyds Bank.

It put the titles up for sale nearly a year ago. The Spectator was sold to hedge fund founder Paul Marshall in September, but the Telegraph has not found a buyer.

The 15% cap would allow Abu Dhabi to retain some ownership of the paper.

($1 = 0.7523 pounds)

(Reporting by Sachin Ravikumar; editing by William James)