The UK government has introduced groundbreaking legislation. It previously prohibited State Owned Investors (SOIs) from owning more than a 5% share in British print newspapers and news periodicals. On Thursday, federal officials unveiled a historic expansion. This new initiative promises to uphold plurality in the media landscape, all while assisting financially distressed publishers in obtaining critical funding.
The new legislation defines sovereign wealth funds and public pension or social security schemes as SOIs. Such a classification broadens the scope of separate interests, allowing for foreign investment into the media sector. Yet, in recent years, this booming sector has faced economic pressures. The law facilitates foreign states’ investments while ensuring that such ownership does not compromise the independence of the UK press.
The threshold of 15% for SOIs was deemed the most effective and proportionate approach to mitigate risks associated with foreign control over domestic media. In response, Culture Secretary Lisa Nandy highlighted that the changes are intended to protect media plurality. These changes will better equip journalism institutions with the support they need to continue succeeding.
“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.” – Lisa Nandy
The introduction of this law follows a pattern of highly publicized, high-profile transactions that have rocked the UK media landscape. Sheikh Mansour bin Zayed Al Nahyan had supported the £600 million bid from the American venture capital firm RedBird. This strategy is apparently a bid to acquire most of the UK’s newspaper titles. Additionally, The Spectator was sold for £100 million to Sir Paul Marshall, who subsequently appointed Lord Gove, a former cabinet minister, as the publication’s editor.
It prevents foreign governments from owning, controlling or influencing UK newspaper and news publishers. This legislative safeguard is intended to ensure continued scrutiny over any future hostile takeovers that may threaten the FCC’s public interest mandate.
Nandy restated the Government’s desire to create a more secure and sustainable environment for the press. She argued that the new rules would alleviate the economic burdens of cash-strapped journals. This amendment would allow them to better compete for important infrastructure investment, while shielding against corrupting foreign influence.
“We are taking a proportionate, balanced approach to a threshold for low-risk investments that will remove a potential chilling effect on press sustainability.” – Lisa Nandy