The Telegraph and Spectator's auction is unlikely to change its stance

Opinion

Who will emerge to buy The Telegraph and The Spectator, and what will it mean for one former columnist and editor?

It must have seemed like a bit of a mystery to Daily Telegraph readers last week when up popped front page news that the newspaper and its sister publication The Spectator were going to be put up for auction by Lloyds Bank.

The paper, which had trumpeted such certainties as Brexit and the enduring merits of Boris Johnson (despite the occasional personality flaw) and the power of the free market over everything, was on its uppers and was about to suffer a serious indignity.

How could such a thing have happened and without any apparent previous hint of trouble? The pitch had not been rolled in advance, as political commentators like to say, at least not for Telegraph readers.

Other rival newspapers had gleefully written of the financial woes of the Barclay family, which has owned the publications for more than 20 years, but The Telegraph remained coy. The day before, when relations between Lloyds and the Barclays over loans of around £1bn were about to rather publicly break down, not a word appeared in The Telegraph.

And then, as if out of the blue came the thunderclap. The holding companies that control The Daily Telegraph were being put into receivership and auctioned off.

Imprudent finances

How can such a thing have come about? Like other national newspapers the internet age has been challenging for established publications, but The Telegraph is profitable and has more than 750,000 online subscribers. As for The Spectator, the political weekly has been riding high with more than 100,000 paid subscriptions and pushing new records by the quarter.

It only takes a quick look to unpick some of the mystery. The problem is debt, inherited from a raft of acquisitions in many industries, ranging from hotels to shipping, all bought with loans often taken out at high points in the financial cycle.

The newspaper group was essentially collateral against the debt, not even originally held by Lloyds. Much of it was taken out by HBOS, the Edinburgh bank that collapsed in 2008 that was taken over by Lloyds. So, there’s nothing mysterious with what is happening now; Lloyds simply want to get at least some of its £1bn back.

But although The Telegraph is under no immediate threat, its political rivals will enjoy a little smirk that the holding company of a paper preaching financial rectitude could have been run in an apparently imprudent way.

Tycoon bidders

The new owners of the publications, or the price they will fetch, remain in doubt, although their rugged right-wing stance is unlikely to change. Depending on who wins the auction there could be a further lurch to the right — if that is possible.

The Daily Mail and General Trust will certainly be interested, but as the publications enjoy operating profits it is unlikely that such a deal would get past the competition authorities.

In all the circumstances it would be ironic if a trade buyer were to emerge from the depths of the European Union such as the German publishers of Bild.

It is more likely that the action will come from a rich trophy hunter from the Middle East or the likes of hedge fund tycoon Sir Paul Marshall — the sort of people who fail in their bid for Manchester United and want at least a consolation prize.

Sir Paul, who has a stake in GB News, may only be interested in buying The Spectator. But should Sir Paul become involved in the daily, you could see the emergence of a strengthened grouping on the right bringing together The Daily and Sunday Telegraph, The Spectator and GB News.

Such a grouping could cause even greater alarm for Nick Robinson, the Today programme presenter, who warned recently of the growing threat to the concept of impartiality in UK broadcasting. Robinson fears a growing trend of mixing of news and views on the newer channels such as GB News and TalkTV along the American broadcasting model.

The Daily Telegraph could turn out to be one of the jigsaw parts in such a process.

A new perch in political exile?

Enders Analysis believes Telegraph Media Group might be worth only £450m. In any rational world that would represent a fair price, but it would only take two trophy hunters with a political axe to grind to drive the final price considerably higher.

The Telegraph sale — depending on whom the owner turns out to be — could help to clarify the mystery of what Boris Johnson is going to do next. As far as anyone can predict, the former MP for Uxbridge and South Ruislip has burned his boats with Prime Minister Rishi Sunak and is out of formal politics until after the next election.

It is now thought unlikely that after the damning report from the Privileges Committee, the parliamentary standards body, that Johnson would be allowed to stand in any of the upcoming by-elections. After that, should the Conservatives lose the next election, as the opinion polls currently suggest, it seems highly unlikely that Johnson would be prepared to roll up his sleeves and commit himself to five years or more of hard graft as Leader of the Opposition.

That’s where The Telegraph and The Spectator come in. Once the auction is over, Johnson could have a new perch in political exile becoming once again either a Telegraph columnist or editor of The Spectator with a young deputy to do all the work.

If Johnson is serious about a return to the political front line, his best hope lies with the new owner of the TMG. Johnson is however, much more likely to lead a life of leisure interspersed with speeches while the market for his incoherent, unprepared witterings remains inexplicably high.

Then there are the Prime Ministerial memoirs to get on with and the long overdue book on Shakespeare. The Covid inquiry could also take up some of his time.

He will hope that one day the call will come, as it did for Churchill or the Roman statesman Cincinnatus who answered the call to come back from his farm to save Rome. In Johnson’s case, it may be a call that never comes.

As for The Daily Telegraph, you never quite know who turns up as auction and tenders secret bids.

There might be a mysterious tech billionaire out there who has not yet bought a legacy newspaper and might fancy one for the novelty value or perhaps as a birthday present. After all, the cash flows remain reliable.

Stranger things have happened.