Why British newspapers are still in demand: New owners surround The Telegraph and Observer
The physical disappearance of newspapers on Britain’s daily commute is one of the clearest signs of the declining power of the print media.
Yet there are still at least nine titles to choose from on the newsstands every day.
When titles are in danger of disappearing, there is never a shortage of would-be media moguls ready to take up the cudgels.
A long battle over the future ownership of the Telegraph and Sunday Telegraph titles has reached a critical stage. Exclusive talks with Dovid Efune, owner of the New York Sun, end this week.
Belated help has arrived for the American-backed offer with two prominent British figures – former chancellor and You Gov founder Nadhim Zahawi and British-Egyptian billionaire Mohamed Mansour – said by the FT to be in “advanced” talks to join the American consortium to join.
At the other end of the political spectrum, the Scott Trust, which owns the Guardian and Observer, will decide whether to proceed with the sale of the Observer to slow news website Tortoise Media.
Firsts: Britain’s print media continues to break the big stories of the day and set the news agenda
The decision comes in light of a vote for strike action against the deal by colleagues at the Guardian and Observer.
The Observer is in reasonable health, has a paper circulation of 100,000 copies and made a profit of £3 million in the last financial year.
The days of ‘It’s the sun that won’ – the totemic headline after John Major’s victory in the 1992 election – may be over. Yet newspapers continue to set the agenda and can exert a volcanic influence on events.
Mirror revelations about Downing Street ‘parties’ during the pandemic were a nail in the coffin of Boris Johnson’s government.
A series of scoops and regular revelations from the Sunday Times, the Sun and the Ny Breaking – joined by the broadcast media – about Keir Starmer’s freebies and those of his colleagues turned a triumphal entry into Downing Street into scrambled eggs.
The battle between the press and the government has intensified over Labour’s poorly received tax budget.
The opportunity to make a difference to national events continues to make newspaper ownership an attractive prospect.
Maybe it’s not a trend yet. But a new generation of owners is emerging, some of whom are deeply immersed in the possibilities that technology offers.
Amazon founder Jeff Bezos, who has unlimited resources, is busy reviving the Washington Post in the US after its previous owners, the Meyer-Graham family, capsized.
The Ochs-Sulzberger dynasty, which controlled the New York Times for generations, was spared from disgrace by former BBC boss Mark Thompson.
His digital-first approach transformed the group’s finances, which have since been boosted by the ‘Gray Lady’s’ acquisitions of online sports bible The Athletic and addictive word game Wordle.
Digital is the way forward in Britain. The Independent, created after Rupert Murdoch’s printing revolution at Wapping almost forty years ago, has been reinvigorated online and has made a healthy profit of £3.5 million in the last fifteen months.
The embrace of artificial intelligence (AI), to provide foreign language additions, has helped attract 5.7 million registered users and reduce dependence on advertising revenue.
The long-running uncertainty over the ownership of the Telegraph could soon end.
Early contenders including private equity firm RedBird, backed by funding from Abu Dhabi, and DMGT (owner of the Mail titles) are no longer in contention.
Hedge fund magnate Paul Marshall stepped in to buy the Spectator from the Telegraph group for £100 million and quickly installed erratic former Cabinet minister Michael Gove as editor. Currently, Marshall has disappeared as a potential buyer for Telegraph titles.
Almost out of nowhere, New York-based digital publisher Efune, backed by heavy US commercial funding, has emerged as the most likely new owner with a bid initially thought could be worth up to £550 million.
Industry speculation suggests that this figure is considered very unlikely to be achieved.
The Manchester-born owner of the New York Sun has shown consummate skill in taking defunct titles and turning them around.
He began by converting one of the few Yiddish newspapers Algemeiner, which was closely read in the Charedi Jewish community, into an online English-language title reporting on Jewish issues and Israel.
Pledge: Tortoise Media founder James Harding, former editor of the Times and BBC News, pledges £25 million in new investment in the Observer
From these small beginnings, he took control of the New York Sun, one of the Big Apple’s oldest newspaper brands first published in 1833 and which was all but defunct when Efune landed in 2020-2021.
He put the broadsheet title, once part of the Pulitzer publishing empire, online,
giving New Yorkers and everyone else a more conservative alternative to the famously liberal New York Times.
Efune’s funding reportedly comes from investment firms Oaktree and Hudson Bay Capital and the family office of American philanthropist Michael Lefell.
Former Telegraph owner Conrad Black, who was forced out 20 years ago amid allegations of financial misconduct, is director of the New York Sun.
The potential buyer comes from a respected rabbinic family and is a cousin of the Kalms family who founded electronics store Dixons, now known as Currys.
Efune’s newspaper background would suggest an intelligent, right-wing Israel that supports the digital future. Efune promises reporting on “clear follow-up issues of the day” and describes himself as a “lifelong journalist.”
As with all transfers of newspaper ownership, any deal will have to pass the public interest hurdles set by media regulator Ofcom and Culture Secretary Lisa Nandy.
Union hostility among Guardian and Observer employees over the proposed sale of the world’s oldest Sunday newspaper to online start-up Tortoise is a major obstacle.
However, there is a determination from Tortoise founder James Harding, a former editor of the Times and BBC News, to get the job done – and he is promising £25m of new investment in the title.
It won’t be easy to disentangle the Obs from the Guardian, where large pieces of paper, including City and Sport, are jointly produced. Production agreements are also shared.
Harding has brought together an eclectic mix of backers for the deal, including South African tycoon Gary Lubner, formerly of Autoglass, through his philanthropic foundation ‘This Day’.
His ambition is also reportedly backed by US asset manager Standard Investment, managed by David Millstone and David Winter. It has interests in digital media startups Puck, Air Mail and publisher Spiegel & Grau.
Historical print media titles may be under financial pressure and looking for a long-term online future.
But there is no shortage of funding, much of it American (such as Premier League football clubs) poised to colonize the future of digital media.
In this universe, traditional titles like the Telegraph and Observer have become the new honeypots for busy bees looking to revolutionize media finance, improve performance and gain a voice in Britain’s domestic and geopolitical events.
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