The Daily Mail‘s publisher has revealed the “enormous potential” of The Telegraph in the US, alongside its successful subscription model and the potential cost efficiencies, are behind its bid to buy the rival newspaper.
Mail publisher DMGT, which also owns Metro and the i, has previously confirmed it was considering a bid to buy The Telegraph. The auction officially began on Friday 20 October.
If the bid was successful it would likely be subject to a probe by the Competition and Markets Authority as it could take the publisher above 50% of the daily newspaper market.
A DMGT spokesperson explained the company’s vision to Vanity Fair in the US. They said: “The Rothermere family has a unique record as a custodian of newspapers, and since Lord Rothermere took DMGT private, its focus as a consumer news business puts it in an ideal position to provide the resources, management expertise and long-term decisions the Telegraph needs for its journalism to thrive.
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“The Telegraph’s success in building a subscription model will help us reinforce the strength of our existing business.”
Telegraph Media Group, which now includes the Chelsea Magazine Company, said in August it had passed the one million subscription milestone ahead of its target, which was the end of the year. It was the third UK national newspaper company to do so, after The Guardian and Financial Times.
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While Mail Online is free to read, DMGT is building subscription-based digital revenues through sister product Mail+. The i, which DMGT bought for £49.6m in 2019, started a digital subscription strategy about 20 months ago.
The DMGT spokesperson continued: “We must stress that editorially the Telegraph will remain independent of our other titles, and we will take steps to ensure this,” echoing what was said at the time of the i acquisition when the company noted the new purchase had a “different editorial style and tone to the Mail and the audience has a different demographic”.
UK newsbrands like Daily Mail and Telegraph expand US presence
The DMGT spokesperson went on: “We do believe there is a strong potential to scale the Telegraph abroad, particularly in the US, just as we have very successfully done with the Mail.”
According to Press Gazette’s monthly ranking, the Daily Mail is the 12th biggest news website in the US almost ten years after launching Dailymail.com across the Atlantic. Other UK newsbrands to feature in the top-50 ranking are the BBC (tenth place), The Guardian (18th), The Sun (23rd) and The Independent (41st), while Reach titles the Mirror and Express have begun running dedicated US operations in the past year.
The Telegraph does not currently feature in the list although it has hired for key US roles in the past year and said it has “ambitious targets for audience and subscriber growth in the US”.
The DMGT spokesperson said: “We believe there is enormous potential in the US, which sadly has become polarised between the left and the right, both in print and in broadcasting, for a centre-right news publication like the Telegraph.
“The current political polarisation is not healthy for America or the world, and we are convinced there will be a strong market for an alternative that offers an intelligent and accessible conservative viewpoint.
“The cost efficiencies a successful bid would create across all our titles will help fund this expansion.”
DMGT chairman Lord Rothermere took the company private at the end of 2021 after nearly a century on the stock market, meaning any deal would require less persuasion to take place internally.
It has been reported that DMGT’s bid, like several of the other contenders, could involve some funding from investors in the Middle East. The spokesperson said: “If we field a bid with another investor it would only be on the condition we have the majority of equity risk, and the control needed to invest in the business and protect its editorial independence.”
Who else is interested in buying The Telegraph?
Other contenders reported to be vying to buy The Telegraph, for a price thought to be around £600m, include ex-Telegraph editor William Lewis, GB News and Unherd investor Paul Marshall, National World executive chairman David Montgomery, Rupert Murdoch’s News UK, and Czech billionaire businessman and former investor in Le Monde Daniel Křetínský.
German publisher Axel Springer, which owns titles including Politico, Bild, Die Welt and Insider, has expressed an interest in taking part in the auction but new comments by chief executive Mathias Döpfner have cast doubt on how far it may go through the process.
He told Politico’s Power Play podcast, hosted by Anne McElvoy: “We never comment on M&A speculation but I can tell you that we have defined a digital-only strategy and we remain interested in growing our digital media portfolio. Digital first, digital only.” Axel Springer previously tried to buy The Telegraph in 2004, but the Barclays won out.
Meanwhile the Barclay family, who were ousted from ownership of Telegraph Media Group in June over £1bn in debt owed to Lloyds Banking Group, want to buy back The Telegraph and The Spectator titles alongside a Middle Eastern backer who they are attempting to keep anonymous.
Tory backbencher Danny Kruger, a former chief leader writer for The Daily Telegraph, wrote to Culture Secretary Lucy Frazer at the weekend asking for the Government to intervene with a Public Interest Intervention Notice to allow it to find out who the money would be coming from and why.
Kruger said: “If material influence over, or control of, a quality national newspaper was passed to an unknown foreign ruler at any time it would raise concerns, but at a heightened time of geopolitical turmoil I believe it is more important than ever that this deal for a treasured national asset is given proper scrutiny.”
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