Telegraph falls to loss of £240m as a result of loans to Barclay family ‘unlikely to be repaid’

Media group, which is up for sale, sets aside nearly £280m to cover lending relating to current owners

The media group which owns the Daily Telegraph newspaper tumbled into the red last year after it set aside nearly £280m to cover loans made to the Barclay family which may not be repaid.

The group said that, despite a resilient financial performance, it had made losses of £244.6m in 2023 – against profits of £33.3m in the previous year – due to the provision.

A £277.6 million provision has been made against debts owed from parent company undertakings, according to Telegraph Media Group's accounts, "with the ongoing corporate transaction casting doubt over the recoverability of this balance."

The Telegraph on its own website reported that the provision had come as a result of “loans extracted by the Barclay family which are unlikely ever to be repaid”.

The future ownership of the Telegraph titles and the Spectator magazine has been uncertain since June 2023, when the titles were seized by Lloyds bank after the Barclay family failed to repay £1.16bn in debts. The debts were later repaid by a UAE-backed consortium which had hoped to buy the group but were forced to walk away under political pressure.

The media business announced on Wednesday that it has completed a thorough examination of past transactions concerning payments made to and received from linked parties and group entities in its 2023 accounts.

It said this review had “identified potential irregularities in the recording of such transactions” and said that, although there had been no changes to assets and liabilities, there was “a potential risk of future possible repayment claims against the company and group in respect of such transactions”.

The Telegraph announced 2023 losses in August 2023, after reaching a milestone of 1 million subscribers. The total number of subscriptions throughout the Telegraph Media Group increased from 734,000 in December 2022 to 1.03 million in December 2023. A major factor in the increase in subscriptions was the £13 million purchase of Chelsea Magazine Company, a producer of consumer magazines including Classic Boat, last year.

As to the research, a significant contributing cause to the turnover growth from £254.2 million in 2022 to £268 million in 2023 was the increase in digital partnerships, advertising, and subscriptions.

Telegraph Media Group CEO Anna Jones said that 2023 had "reinforced the strength and resilience of Telegraph Media Group as a business." "The substantial growth in our operating profit pre-exceptional items last year was driven by significant advances in both digital advertising and digital subscription revenue," Jones said.

The Barclay family, which bought the Daily Telegraph in 2004, said: “The Barclay family is proud of its track record of investment in Telegraph Media Group, which under its ownership has been transformed into a successful digital and print media brand, with over 1 million subscribers.

“Throughout the family’s ownership the business has been managed responsibly and within all legal frameworks, with all accounts approved by auditors.”

The newspaper group is up for sale after the UAE-backed consortium walked away from its £600m planned deal to buy the group in May, saying that new legislation which blocked foreign-government-backed entities from owning British media groups meant the planned transaction was “no longer feasible.”

The decision in May by RedBird IMI, a partnership backed by Sheikh Mansour bin Zayed al-Nahyan, the UAE’s vice-president, and the US investment firm RedBird Capital Partners, fired the starting gun on an auction process for the newspaper group which is widely seen as the in-house journal for the Conservative party.

Bidders in the auction, which is being run by the banks Raine Group and Robey Warshaw, are expected to include DMGT, which owns the Daily Mail, and Paul Marshall, the hedge fund founder and backer of GB News. News UK, owned by Rupert Murdoch, has shown interest in the Spectator magazine.