US-based RedBird Capital poised to acquire the Telegraph UK in $1b-plus deal
Cardinale said: 'This transaction marks the start of a new era for the Telegraph as we look to grow the brand in the UK and internationally, invest in its technology and expand its subscriber base.
'We believe the UK is a great place to invest, and this acquisition is an important part of RedBird's growing portfolio of media and entertainment companies in the UK.'
In recent years the Telegraph has been navigating the decline of printed newspapers by investing in building its base of paying digital subscribers. Initial rapid growth slowed after 2021 when its previous owners, the Barclay family, got into financial difficulties and applied a squeeze to extract cash.
RedBird Capital is expected to allow the Telegraph to reinvest more of its profits, which at the operating level were more than £54m last year.
Cardinale aims for the brand to become a force in US and global journalism, targeting an intelligent centre-right readership that is not currently well-served. He also aims to expand the Telegraph 's successful travel offering and build an events business.
Telegraph editor Chris Evans said: 'The Telegraph has made enormous progress in recent years since the launch of its digital subscription strategy, thanks to the hard work of its brilliant staff and valued support of its readers.
'But there is much more that can be achieved. With the right plan and the right investment by ambitious new owners, this venerable title can look forward to an era of unprecedented success.'
Telegraph Media Group chief executive Anna Jones said the company had 'exceptional journalism at its heart'.
She said: 'RedBird Capital Partners have exciting growth plans that build on our success – and will unlock our full potential across the breadth of our business.'
As he works to complete the consortium, Cardinale, 58, is understood to be in detailed talks with the owner of the Daily Mail, Lord Rothermere. In 2023, Lord Rothermere lined up to bid for control of the Telegraph in an abortive auction, but is now said to be discussing taking a stake just shy of 10%.
Sources close to the talks said a deal would position both titles to capture savings by sharing certain costs while seeking to stay within competition and media plurality rules. Lord Rothermere's company DMGT already sells print advertising space in the Telegraph and is involved in its printing.
More minority investors are expected to be named in the coming weeks before a final deal is submitted to regulators. Sources said Cardinale had lined up more backers among his British contacts in sport and media investing.
The former Goldman Sachs banker has emerged as a significant dealmaker in football in recent years, with RedBird Capital the owner of AC Milan and a shareholder in Fenway Sports, the group behind Liverpool FC.
Cardinale is also poised to become a bigger player in Hollywood as a backer of the US$12b ($20b) takeover of the producer and broadcaster Paramount, which owns Channel 5 in Britain.
IMI, the UAE's media investment vehicle, is expected to retain a stake in the Telegraph of up to 15% as part of the plans. Under proposals by Culture Secretary Lisa Nandy, an outright ban on foreign states owning shares in newspapers, which blocked RedBird IMI's attempted takeover, is to be relaxed.
The move follows lobbying by Lord Rothermere and Rupert Murdoch. They argued earlier plans for a more stringent 5% limit on foreign state investment would cut the news industry off from an important potential source of capital at a time of dizzying change.
The 15% limit has split the Conservatives, who were in power when the RedBird IMI deal was blocked.
The party's leadership has said it will support the higher figure but Julia Lopez, the media minister at the time of the original ban, branded Labour's decision a 'sell-out'.
Lord Forsyth of Drumlean has said he will back a Liberal Democrat 'fatal motion' to obstruct the legislation and declared foreign state shareholdings a 'systemic threat to a free press'. He claimed the Government had yielded to diplomatic pressure after the UAE took offence at the decision to block RedBird IMI's attempted takeover of the Telegraph.
Under the planned laws, the UAE will be barred from involvement in the running of the Telegraph as a purely passive shareholder. The Culture Secretary will have a duty to trigger an investigation of potential breaches and powers to force the country to exit its investment if it is found to have exercised influence.
Cardinale's agreement in principle with IMI, which is ultimately controlled by Sheikh Mansour bin Zayed Al Nahyan, the Deputy Prime Minister of the UAE, is expected to call time on a protracted parallel sale process overseen by the investment bank Robey Warshaw.
An IMI spokesman said: 'We're delighted with this announcement and know that the Telegraph has a bright future under the control of Gerry Cardinale and RedBird Capital.
'This will end the uncertainty that has been facing the Telegraph, secure its future and enable it to thrive and grow for years to come.'
Robey Warshaw ran a sale process last year that was eventually nicknamed 'the newspaper auction from hell'. It was the second in the saga since the Barclay family lost control of the Telegraph in early June 2023 after a dispute with Lloyds Banking Group over £1.2b of overdue debt.
Dovid Efune, the publisher of the New York Sun, emerged as the winning bidder under the Robey Warshaw process last October, but subsequently struggled to raise the necessary funds. He has persisted in what some bankers and media executives view as a quixotic quest to finance his offer, however, and last weekend made a surprise return to the fray.
Efune's latest bid includes support from the former Cabinet Minister Nadhim Zahawi, who is well-connected in the UAE and was involved in the original deal between the Barclay family and RedBird IMI, and hedge fund chief Jeremy Hosking, who is the main donor to the right-wing populist Reclaim party led by the controversial actor Laurence Fox.
The Efune consortium is pitching its gate-crashing attempt as a 'British bid' in contrast with RedBird Capital's more international outlook. Sources close to the process said Efune's fundraising was still not complete and that the bid included a level of debt that would be difficult to support, although he remains in discussions to sign up more supporters.
Cardinale's consortium is expected to rely on debt of little over £100m, or about two years of the Telegraph 's underlying profits. The current level of borrowing is about £60m.
In recent days the two men have both been meeting influential figures in London to drum up support as the battle over the Telegraph seemingly reaches its climax. In one potentially comic scene, Cardinale and Efune this week ran into each other in Parliament as they met different peers interested in the issues.
While Cardinale appears favourite to prevail, there remain hurdles to completing a deal.
Efune may review legal options over the Government's handling of the lengthy process, for instance. Meanwhile, regulators are likely to closely scrutinise all members of the RedBird Capital consortium and their sources of funding. Cardinale is also yet to secure final commitments from his planned co-investors.
The likely involvement of a rival newspaper publisher in DMGT will also pose questions about competition and media plurality that could further complicate and lengthen the path. A full investigation by the Competition and Markets Authority could take 24 weeks, although Nandy has discretion to opt for a quicker process.
Cardinale has already met senior commercial and editorial executives at the Telegraph to build relationships and discuss business plans, including utilising RedBird Capital's technology experts.
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It was able to host the Olympic Games in 2021 without any financial fuss, and is about to host World Expo 2025. It has some of the world's most sophisticated infrastructure. Despite its high government debt – actually, to a large extent because of its high government debt – Japan's is a creditor economy. Japan is not in debt to the rest of the world. Japan's national debt is non-existent. Japan's government debt is widely acknowledged, however, to be the world's highest. Too many commentators – using wilful laziness – conflate national debt with government debt. Japan's is the world's most successful twenty-first century large economy. It operates by Japanese savers lending much of their savings to their government at very low interest rates; those savers prefer to lend to their government rather than to pay high taxes to their government. Prosperous Japanese people are not greedy in the way that many rich westerners are. Their mantra is 'private wealth, public wealth'; not 'private wealth, public poverty'. Japan's is not a zero-sum economy; in a zero-sum economy the prosperity of some comes at the expense of the impoverishment of others. Hugo Jye was negligently dishonest – a case of wilful blindness or ignorance – in claiming that no countries had anything like 270% of GDP government debt. Western economists and financial commentators are likewise wilfully negligent in failing to alert their countries' governments that there is an alternative – in plain sight – to our woeful policies of financial suffocation. Note about three other economies Within the European Union, it is rare for professional commentators to sing the praises of Spain and Italy. Spain, with 101% public debt, is enjoying a low inflation economic boom. It has a life expectancy of 83, higher than all European Union countries other than Malta and Luxembourg. 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Spain and Italy are doing relatively well despite having among the highest older-person to younger-person age ratios in Europe. Spain is pro-actively utilising immigrant labour, whereas Northern Europe is scapegoating immigrants. And Spain, unlike most of Europe, is not looking to its 'Defence' budget to boost future growth. Türkiye's public debt has fallen from a high (since 2006) of 40% in 2021 to under 30% in 2023. This is despite double-digit inflation since 2016 and an average budget deficit since 2011 of 5.3%. While high inflation has benefitted Türkiye by bringing about negative real interest rates (meaning interest payments effectively flow from richer to poorer, generally benefitting indebted Turkish businesses and households), current interest rate settings look like suffocating for Türkiye for the remainder of the 2020s. (This monetary policy of suffocation is also true for Australia in 2025, with its particularly hawkish Reserve Bank at present.) Despite challenging geopolitical and climatic circumstances, Türkiye has, at least until 2024, managed to achieve rising living standards for a substantial majority of its people. Unlike the United Kingdom and some northern European countries, Türkiye has not been a crisis economy despite (or because of) a reputation for unsound public finance. ------------- Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand. Keith Rankin Political Economist, Scoop Columnist Keith Rankin taught economics at Unitec in Mt Albert since 1999. An economic historian by training, his research has included an analysis of labour supply in the Great Depression of the 1930s, and has included estimates of New Zealand's GNP going back to the 1850s. Keith believes that many of the economic issues that beguile us cannot be understood by relying on the orthodox interpretations of our social science disciplines. Keith favours a critical approach that emphasises new perspectives rather than simply opposing those practices and policies that we don't like. Keith retired in 2020 and lives with his family in Glen Eden, Auckland.
