UK Government Implements 15 Percent Cap on Foreign State Ownership in Newspapers to Safeguard Media Plurality

Ministers have acted decisively to close a loophole in media ownership law that could have enabled foreign states to acquire outsized influence over British newspapers. Concerns were raised in the House of Lords regarding legislation introduced earlier this year, which permitted individual foreign state investors to hold up to a 15 percent stake in UK newspapers and news websites. The absence of an aggregate cap led to warnings that several foreign entities could collaborate and collectively amass effective control of news outlets.

Baroness Stowell, a prominent Conservative peer, championed the need for a cumulative ceiling, highlighting the risks posed by unfettered foreign state investment. Responding to these concerns, the government confirmed it will legislate to set 15 percent as the total allowable holding for all foreign state investors combined, regardless of the number of separate state entities involved.

The revised regulations will also obligate any foreign state entity acquiring more than a 5 percent share in a UK newspaper owner to notify ministers within a fortnight of the transaction. Ian Murray, the media minister, emphasised the importance of maintaining a diverse and pluralistic media landscape, crucial for the health of democracy and an informed citizenry.

These legal changes revisit the hurriedly passed legislation earlier this year, which was initially intended to prevent the UAE-backed RedBird IMI fund from taking over The Telegraph. The original Conservative proposal was for a strict 5 percent cap on foreign state ownership, but this threshold was increased to 15 percent following lobbying from industry giants including Rupert Murdoch and Lord Rothermere. There were arguments that a lower cap might deter much-needed international investment in the struggling newspaper sector, with some alleging it also caused diplomatic friction between the UK and UAE.

It is worth noting that Lord Rothermere’s company raised concerns about a carve-out, which enables listed newspaper owners to admit additional 5 percent foreign state holdings atop the new limit, but ministers maintained that such exceptions were necessary for public companies where smaller shareholdings are not routinely disclosed. Meanwhile, RedBird Capital Partners, previously thwarted in their bid, have returned with a revised offer involving a 15 percent passive stake for the UAE and a minority interest for Lord Rothermere. Culture Secretary Lisa Nandy is now assessing if this latest proposal warrants regulatory scrutiny to ensure media independence and plurality.

RedBird Capital has also come under examination for potential Chinese connections through its chairman John Thornton, whose ties to Beijing have spurred peers to request a national security review. Responding to these concerns, RedBird founder Gerry Cardinale publicly stated there are no Chinese funds in their bid, adding that an independent board would be established to uphold the newspaper’s journalistic standards.