‘I would resign if Abu Dhabi interfered,’ says Telegraph bidder Jeff Zucker

The leader of the Abu-Dhabi-backed takeover of The Telegraph has said he would resign if it were ever suggested that the Gulf state had attempted to interfere in editorial matters.

Jeff Zucker, the former head of CNN, told The Telegraph that “nothing is more important to me than editorial independence” as he attempted to provide reassurance over the proposed deal. 

He insisted that concerns raised by the likes of the former Foreign Secretary Lord Hague and former Brexit Secretary David Davis were “misplaced”.

In an interview with the Telegraph during a visit to London this week, Mr Zucker said: “If anyone were to come to me with even the suggestion of interference, I would resign.”

He added: “I understand why people have raised questions. All I can say is, they’re misplaced. I am here to say that the editorial independence of The Telegraph is guaranteed.”

Lucy Frazer, the Culture Secretary, has said she is minded to trigger investigation of the deal’s impact on the public interests in accurate news and free expression, as well as plurality in views and ownership. 

It could ultimately lead to legally binding restrictions being put in place to safeguard The Telegraph, or even to the deal being blocked and an auction restarted.

However, the Foreign Office and other parts of the Government are keen to encourage investment from Middle Eastern states in the UK and are concerned about the impact of a regulatory investigation.

Officials are considering whether to impose a “hold-separate” order that would keep The Telegraph under the control of independent directors appointed by Lloyds Banking Group while RedBird IMI’s plans are investigated. Lloyds seized control of The Telegraph in June from the Barclay family by sending in receivers over an unpaid £1.2bn debt. Without a hold-separate order, on repayment of the borrowings control could revert to the family for some months.

‘This wasn’t a UAE thing’

Zucker, 58, is head of RedBird IMI, a joint venture between the US private equity firm Redbird Capital and International Media Investments (IMI), a vehicle controlled by Sheikh Mansour bin Zayed al-Nahyan. The sheikh has provided three quarters of RedBird IMI’s $1bn (£790m) fund.

Much of Mr Zucker’s pitch to those concerned about the deal is a personal assurance that his track record of running large US media companies means that he will be able to preserve the editorial integrity of The Telegraph.

“When the auction was announced we said this was something we should look at and IMI was very interested as well,” says Mr Zucker.

“Assets like this do not come on the market very often, okay? The Telegraph is one of the best journalistic brands in the English-speaking world. And so it made complete sense for me to say we should look at this.”

“I had a long relationship with the UAE because of my time at CNN,” says Mr Zucker, recalling how RedBird IMI got started. “It was our third biggest bureau outside the United States.

“When I left CNN, they approached me about starting a media fund. They came to me and they said, ‘people come to us every day about starting a media fund but we know you, we trust you, we back you’.”

But who specifically is “they” when it comes to the UAE and its blurred lines between royalty, government and business? “The highest level. Got it?” Got it.

“I’m the one that then went to RedBird because I was having separate, independent conversations with them. I said ‘why don’t we marry these two ideas?’. That’s how it happened.

“The UAE was backing me. This wasn’t a UAE thing. It was me and they were backing me.”

Instead of competing in the auction, however, RedBird IMI has offered a deal to pay off the debt owed to Lloyds by the Barclay family. The cash must be transferred by Friday to avoid the collapse of the plan, which values The Telegraph and Spectator at £600m. 

It also provides the Barclay family with a further loan of more than £500m direct from Abu Dhabi, secured against Very, the troubled online retailer formerly known as Littlewoods, to allow them to pay off the full balance to Lloyds and so decisively derail the auction.

Compared with competitive bidding, it gives RedBird IMI assurance that it will emerge with The Telegraph and The Spectator, albeit at a high price if the Very loan turns bad. Yet that part of the deal “will exist separately and that’s what will allow us to make sure we succeed here [with The Telegraph]”, says Zucker. It’s not really his problem.

“I think that one of the hallmarks of what RedBird has been able to do, and certainly with this partnership, is to be very creative in its deal making,” he says.

Abu Dhabi a passive investor 

His ultimate partner, 53-year-old Sheikh Mansour, is best known in the UK as owner of Manchester City. He is meanwhile best known to the Government as vice-president of the United Arab Emirates (UAE), the oil-rich absolute monarchy created as the British Empire withdrew from the Middle East. 

Today, it is regarded as more liberal and more trusted than some of its Arab neighbours, and one of the biggest foreign investors in the UK but with major concerns from the West about its human rights. 

Senior Conservative figures such as Lord Hague and Lord Moore, the former Telegraph editor, have said the deal should not be allowed to proceed as the UAE’s free speech laws and controversial diplomatic positions on Russia and China mean it should not be able to influence a major British media company.

But it’s not really about Abu Dhabi, argues Zucker repeatedly over the course of a conversation at the Belgravia home of Mike McTighe, the independent chairman drafted in by Lloyds to shepherd The Telegraph into new hands. Instead, in his telling, it is he who will shape the future of a title founded 168 years ago and which lives by the motto “was, is, and will be”.

“This is me. This is not IMI or Abu Dhabi,” says Zucker. “In fact the legal document that formed this joint venture [RedBird IMI] says that IMI in no way has anything to do with the running of any of our investments. They are there at the entrance making the investment and at the exit.”

RedBird IMI has been up and running since last December, a mere 10 months after the abrupt end of Zucker’s nine years in charge of CNN, perhaps the most prestigious of America’s television news operations.

Despite the unusual structure of the deal and potential overall high price for The Telegraph and The Spectator, Zucker steadfastly maintains that Abu Dhabi will remain a passive financial investor only and that RedBird IMI is an open-ended fund, meaning there will be no deadline to sell up. 

Even the fact of RedBird IMI’s very limited due diligence, another quirk of its ambush that to some observers does not chime with disinterest in the special position and influence held by The Telegraph, is dismissed.

“We have done a little due diligence, through the initial auction process,” says Zucker, referring to the early marketing materials issued by the auctioneers Goldman Sachs. “We’re continuing to do due diligence, and we actually feel really positive about what we have found at The Telegraph.”

‘My legacy is built on editorial independence’

A scenario. The Telegraph has published stories about Princess Latifa bint Mohammed al-Maktoum, daughter of Sheikh Mohammed bin Rashid al-Maktoum, ruler of Dubai and Prime Minister of the United Arab Emirates. She made videos claiming she was being held against her will by her father. Her allegations were denied. Could The Telegraph have published that story under the ownership of RedBird IMI?

“If The Telegraph writes a story that is true, then then there are no issues,” says Zucker. “The Telegraph should be in pursuit of the truth. That’s it, wherever it leads. Nobody is telling the Telegraph what to write or what not to write.

“I understand why people have raised questions,” he says. “All I can say is that they’re misplaced. I am here to say that the editorial independence of The Telegraph is guaranteed. 

“I spent 35 years either running news organisations, overseeing news organisations, or working in news organisations, supervising news organisations, or running them first hand. So my whole 35 years. My reputation, my legacy is built on complete editorial independence.

“On the three investments that we’ve made so far, IMI has never had any asks. I understand those investments are not of the size and stature of The Telegraph, but that’s what they agreed to, it’s what I agreed to and that’s how we’re doing it. I’m not going to trade 35 years of standing up for the truth to do something that’s wrong.

“I trust the people who wanted to back me. I will continue to do this as long as I trust them.”

Zucker cannot be removed as head of Redbird IMI without the approval of RedBird, a private equity firm populated by Goldman Sachs veterans that has so far mostly backed sports and celebrity media ventures. 

For those who don’t accept his reassurances based on his long and successful career in American television, Zucker points to his own significant financial interest in success as a guard against the risk of state influence that could quickly destroy The Telegraph.

“What I think some people are ignoring purposely is that this is a business deal,” he says. “I wouldn’t be interested in it if we didn’t think that we could have commercial returns on it. My own interest is in making sure that this is a good commercial business deal. People cast their own aspersions for whatever reasons. But the reality is, first and foremost, this is a business deal.”

He won’t reveal his own stake in RedBird IMI, but agrees it is “big”.

Joint-chiefs among those casting aspersions are those he ambushed. Rupert Murdoch is known to covet the Spectator, while Lord Rothermere and Sir Paul Marshall were expected to fight it out for The Telegraph. 

Despite an active lobbying campaign spearheaded by the Vote Leave communications chief Paul Stephenson, Sir Paul’s consortium, Zucker reveals, previously sought to join forces with RedBird IMI.

“I do find it quite ironic, hypocritical even,” he says. “Two months ago, we were somebody that they thought they wanted to do business with.”

A spokesman for Sir Paul Marshall’s UnHerd Ventures said: “Sir Paul Marshall has never had any discussions with Redbird IMI about any bid for the Telegraph. He has never spoken to Jeff Zucker.”

‘Fake news’ war with Donald Trump

All the suitors for The Telegraph agree that its biggest growth opportunity is in the United States, where there is a perceived gap on the serious centre-Right of politics between stuffy liberal newspapers dominated by The New York Times and shouty-TV cable channels of the populist Right and beyond.

“We’ve always thought that there was a great opening in the United States for a true centre-Right media outlet,” says Zucker, who adds that the shape of the expansion would be decided with The Telegraph’s editorial leadership. 

“If you have a brand that has the journalistic integrity of The Telegraph and the energy that UK outlets have, that really is missing in the States, I think it’s a good combination.”

Zucker himself is frequently associated with liberal America, particularly in the wake of CNN’s “fake news” war with Donald Trump. Perhaps aware that Telegraph reader sympathies may not be entirely with the former US president and certainly not with the more Leftish elements of the Democratic Party, Zucker runs for cover.

“First of all people don’t know my politics,” he says. It’s as close to snapping as he has come over 45 minutes of rank impertinence, and in all fairness it’s not very close at all.

But he continues: “Half the people in the United States think that I was responsible for Donald Trump’s election, because I put him on The Apprentice. Half the people think that we were too tough on Donald Trump at CNN.

“My view always has been that we were not anti-Trump. We were pro-truth. Now, if that was confused with being anti-Trump. That’s not my fault. That’s because he couldn’t tell the truth.”

What if The Telegraph wanted to back Trump in the 2024 presidential election? “No problem. That’s for the editorial team to decide.”

Large-scale American expansion would mean heavy investment, even beyond the full price RedBird IMI plans to pay for The Telegraph. 

Zucker is clear that money would be made available to fund a significant step up in ambition compared with the Barclay years. He pledges that the standard private equity manoeuvre whereby companies are loaded up with debt to improve returns will not be used. An equity-only financial structure will be “healthier” for The Telegraph’s growth.

“It’s clear to us that this is a fantastic asset that has done incredibly well with very little investment, and has been quite under invested for quite some time,” he says. “The team has done an incredible job with very limited resources and very limited investment.

“I don’t have an exact dollar figure to invest, but I know that the current editorial team has great ambitions. We think that they’re right and we absolutely will get behind them.

“I’m a big believer in that you have to invest to grow. You know, we found this when we went to CNN. They hadn’t invested and I made the case for it. And over the decade that we were there, we doubled the profits.”

The Telegraph can be platform for growth

For RedBird IMI, which has so far invested in relatively small media business including a documentary production studio and a specialist sports business news venture, The Telegraph could serve as the keystone of an empire, Zucker suggests. The fund has so far raised $1bn, but expects to bring in more backing.

He suggests RedBird IMI’s studio could produce documentaries and podcasts with The Telegraph, but hints at grander plans of international reach.

“We should think bigger,” Zucker says. “I think there is an opportunity to invest in further acquisitions outside the UK. The Telegraph can be the platform from which we grow.”

Before global domination, there are more mundane matters to attend to. The clock is ticking on the Barclay family’s debt repayment effort, and on Lucy Frazer’s deadline to intervene in the public interest.

“I’ve had conversations with the Government, and we’re gonna continue to cooperate and work with them through whatever process they think is appropriate,” says Zucker.

Suggestions such as an independent editorial board remain up in the air. Meanwhile it seems reports that the former Cabinet minister Nadhim Zahawi could be appointed chairman appear to be premature.

“Nadhim facilitated the relationship with the Barclay family and obviously that was very helpful,” says Zucker. “But a long term role is still to be determined.”

There remains much still to be determined about RedBird IMI’s extraordinary attempt to take over The Telegraph. 

As Zucker reveals that he would resign over any interference, Rishi Sunak ally Lord Hague’s opposition is revealed. For now Zucker must contend with was, is and maybe.