Bloomberg: Daily Mail Owner’s Telegraph Bid Shows Altered UK Media Landscape

In this recent Bloomberg article Dowgate Group Co-Chair Lorna Tilbian offers expert insight in new coverage of DMGT’s proposed acquisition of the Telegraph, noting how today’s transformed media landscape is reshaping regulatory attitudes. This article was first published on 24 November, with thanks to Bloomberg for their permission to republish here:

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A bid by the owner of the Daily Mail newspaper to acquire its rival the Telegraph is likely to be waved through by regulators, reflecting the UK’s altered media landscape.

“The scene has changed,” said Lorna Tilbian, co-chair of Dowgate Group, adding that an entire generation no longer consumes the news via legacy media.

“When these things were first looked at, Google and Facebook had not devoured the advertising market,” she said. “News has become a bit of a commodity.”

Should the Daily Mail & General Trust Plc’s £500 million ($655 million) bid for the Telegraph Media Group, announced on Saturday, conclude, it would finally end a politically fraught, two-and-a-half year saga. A previous bid from RedBird IMI was complicated by questions over the consortium’s ties to the UAE and impact on editorial independence. That prompted the then-Conservative government to ban foreign states from controlling or owning UK newspapers.

A tie-up would create a right-leaning media powerhouse, at a time when the populist Reform UK party is striding ahead of Prime Minister Keir Starmer’s Labour Party in voter polls. The Telegraph, often nicknamed the Torygraph, is historically intertwined with the upper echelons of the Conservative Party. The Mail titles also tend to back the party.

UK Culture Secretary Lisa Nandy would “review any new buyer acquiring the Telegraph” in line with current rules, a spokesperson for the Department of Culture, Media and Sport said.

Regulators should consider that the Telegraph has been “a stranded asset,” for several years, said Claire Enders, a media analyst and founder of Enders Analysis.

“A good outcome is that we don’t have any foreign interference,” said Tilbian of the current bid.

Nandy could refer the deal to the UK’s media and competition regulators on public interest grounds, with a likely focus on media plurality. The Times and Sun newspapers, owned by News Corp., form another influential conservative newspaper bloc.

The Competition and Markets Authority can also probe deals where the target’s revenue is above £100 million; where the combined businesses have market share of 25% in the UK and meet certain revenue thresholds; or where one party has UK market share of 33% and revenue of more than £350 million.

DMGT has traditionally made the bulk of its revenue from sales of the Daily Mail, the top newspaper in the UK by print circulation, according to October figures from ABC. It also makes money fromonline ads and digital subscriptions, and owns the i newspaper and website, New Scientist magazine and the Metro freesheet. Its revenue was £1.1 billion last year.

The Telegraph has doubled down on digital subscribers, which accounted for 29% of the group’s £279.4 million revenue last year.

“It’s a case of industrial logic,” said Enders, forecasting operational synergies of £40 million to £50 million annually if a deal goes through, while the newsrooms would likely stay untouched.

RedBird Capital Partners, founded by former Goldman Sachs banker Gerry Cardinale, had agreed in May to buy the Telegraph Media Group after a previous bid from its joint venture with UAE-based IMI fell apart. RedBird Capital Partners pulled its bid amid a backlash from the Telegraph Media Group’s staff and ahead of a government decision on whether to refer the offer to regulators for scrutiny.

“There is no other buyer than DMGT at £500million,” Enders said, referring to the minimum requested price for the asset.“There is a face-saving dimension to this bid.”

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