Mathias Döpfner is the CEO of the international media group Axel Springer, and he’s a big thinker about how AI will impact news organisations and beyond. On the podcast, he delves into AI in journalism, and also talks about public trust in media, his friend Elon Musk at Twitter/X and how post-Cold War trade with countries like Russia and China has failed to transfer Western ideas of freedom and democracy. Döpfner is questioned about reports that Axel Springer wants to buy The Telegraph, before Barclay brothers biographer Jane Martinson considers the battle to become the newspaper’s next owners, along with the significant concerns that follow some of the interested parties.
Plus, Alan and Lionel reflect on the news that former prime minister Boris Johnson is joining GB News and how far Ofcom will allow the politically partisan channel to go.
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The following transcript has been edited for clarity.
Alan Rusbridger:
This episode has been sponsored by Q5, a global management consultancy that helps companies and public bodies improve their organisational health. If you'd like to find out more about Q5, please visit Q5Partners, all one word, dot com.
Hello and welcome to Media Confidential, Prospect Magazine's weekly dive beyond the clickbait to explore the fascinating and contested world of media and explain how it affects you. I'm Alan Rusbridger.
Lionel Barber:
And I'm Lionel Barber. In this episode, we'll be speaking to a very big fish in global media, Mathias Döpfner of Media Group, Axel Springer. He has strong views about AI in journalism, media trust, trade, democracy, and the future of newspapers.
Mathias Döpfner:
We have to emancipate the idea of a newspaper from paper. I think really the brightest future of journalism may be ahead of us if we learn the right lessons and do the right things.
Rusbridger:
We'll also ask him about Axel Springer's reported interest in buying the Telegraph Media Group, and then we'll discuss who else is in the running with Barclay Brothers, biographer Jane Martinson.
Barber:
Don't forget to listen and follow us wherever you get your podcasts to make sure you never miss an episode. And Media confidential is on X, slash Twitter, @mediaconfpod. Alan, we are together in London for the second week running. That must be a news story. Anyway, it's great to be here to pick up the print copy of the latest Prospect magazine. What's in the November issue?
Rusbridger:
Well, we had the dilemma of trying to capture Israel/Gaza for a monthly magazine, which is not as easy as it sounds. But we've got two very good pieces, one by former Knesset leader Avraham Burg, a left-winger on where he sees the future of Israel after the trauma that it's been through in the last month, and also by the Egyptian journalist Khaled Mansour about how this is going to affect the Arab states and the region. A very good piece by Sam Friedman on the COVID inquiry, which has sprung to life this week, really looks at governance by WhatsApp and what this tells us about the whole way that we're governed. And finally, a really intriguing piece by General Sir Michael Rose, who was in charge of special services in the Falklands. It's a book review, but it's a coruscating account of the leadership during the Falklands campaign and what he claims is a coverup over the bombing of the naval ship, the Galahad, with a loss of nearly 50 lives. So that's quite a meaty read.
Barber:
I've been looking at the reporting on the COVID inquiry, and I must say, even as a grizzled vet, I found some of this stuff quite incredible. I mean, the fact that Cabinet Secretary Simon Case is essentially saying, "It's impossible to work with Boris Johnson, he is no leader. We cannot go on like this going from one course and then turning around 24 hours later." I mean, it confirms what we thought.
Rusbridger:
It is astonishing stuff and until this week, it was slightly surprising that it hadn't been much reported, but I think that will change with the really dynamite evidence that seems to be emerging this week.
Barber:
I must say, again, wearing an old hat, if I were editor, I'd actually be carving out some space every day in the paper to make sure that it's on the record what actually went on as revealed in the COVID inquiry, not just because it's obviously running into a cost of millions of pounds.
Rusbridger:
Couldn't agree more.
Barber:
So Alan, if I'm taking a stroll around town, where are the best places to pick up a copy of Prospect?
Rusbridger:
Well, in all good bookshops that sell magazines, in WH Smiths, at airports and railway stations, but of course it's available online and on your mobile phone.
Barber:
And there's, of course, an exclusive offer for our podcast listeners. You can get an annual subscription to Prospect for as little as 49 pounds, which gives you digital access to all the magazine's best long reads, commentary and cultural criticism. If you're quick, you can also get a free signed copy of Breaking News, Alan's book about the remaking of journalism. Sign up now at subscribe.Prospectmagazine, all one word, .co.uk/mediaconfidential.
Rusbridger:
So, Lionel, we've both been receiving a reaction to last week's episode about the BBC and its reporting of the Israel/Hamas War. I think it was a good thing to surface that because it's been damaging for the BBC. There's no question about it, but there's a question in my mind now about what is sayable about this conflict. I mean, we've seen labour front benches and Tory politicians now being effectively cancelled for saying the wrong things about this war, and it seems to be important that the media is free to cover this in all its dimensions.
Barber:
Yes, it's not good enough if you can't mention the word Palestine without being accused of being antisemitic. I do think it's really important, and we did that, to write, and speak about the appalling assault from Hamas, violence against innocent people, innocent Jewish people in the kibbutz. One needs to make that clear, but at the same time, you have to think beyond the conflict. If I had a slight criticism of some of the TV coverage, it's very much focused on what's the next military move rather than thinking, is there an overall political strategy? What comes next in Gaza? Clearly, Hamas is totally discredited and they're out. So what does come next? And then secondly, obviously the regional players, particularly Iran that seem to be behind this.
Rusbridger:
I've been struck by a couple of rival podcasts. The Ezra Klein Show on the New York Times had a fascinating episode with two liberal Jewish American journalists, Spencer Ackerman and Peter Beinart, which it seemed to me, went far beyond anything that we're hearing on the BBC in terms of liberal Jews who are very pro-Israel, but also very pro-Palestinian. And it was a discussion we're not hearing much in British media.
Jonathan Freedland and Yonit Levy, they've got a podcast called Unholy. Yonit Levy is a journalist on Channel 12 News in Israel. Again, broadly liberal Jews can discuss this in, I think, a wider dimension. And finally, in terms of media, David Remnick and the New Yorker. I mean, Remnick jumped on a plane the moment he heard about these Hamas attacks, and he's such a great reporter as well as such a great editor, and I can't recommend too strongly the big piece he wrote in response. It's just a great piece of reporting.
Barber:
Very quick plug though for, I thought, a fantastic piece in The Atlantic by Simon Sebag Montefiore, essentially looking at how parts of the left have looked at this conflict without any sense of history, looking at this in terms of colonialism, settlers, and he just reminds us what actually happened in turn of the 20th century, the British role, and he's also very critical of Netanyahu and is very clear there should be a two-state solution. But I think in terms of the big picture and the historical canvas, it's a really excellent piece.
Rusbridger:
This traumatic conflict is still ongoing and I'm sure we'll return to the way it's been covered before too long. But one other media headline caught our eyes this week.
Boris Johnson:
Hi folks. Boris Johnson here. I'm excited to say that I'm shortly going to be joining you on GB News and I'm going to be giving this remarkable new TV channel my unvarnished views on everything from Russia, China, the war in Ukraine, how we meet all those challenges.
Barber:
Yes, Boris Johnson is the latest Tory politician to join the right-wing TV channel. GB News revealed that the former UK Prime Minister and Daily Mail columnist would cover the forthcoming elections in the UK and the US. Johnson himself said he wanted to discuss why our best days are yet to come and why he believes people, and I quote, "want to see more global Britain, not less."
Rusbridger:
Whatever that means. I mean, there is an issue here, isn't there Lionel, about the advent of opinionated television and you could say opinionated radio? But when you look at GB News, you can't help feeling they're having a laugh. You look at the roster of people who already are both Tory MPs and presenters. You've got Jacob Rees-Mogg, Philip Davies, and Nigel Farage, who wouldn't want to be a Tory MP, we suspect. Esther McVay, Lee Anderson. I mean, if there was a pretence of balance here, as the law requires, you'd be more sympathetic to the idea of Johnson popping up here. But something very weird is going on, and I think this is probably a subject we should return to on this show, but okay. Ofcom is doing several individual inquiries, but I'm not sure this is enough to really tackle what is a wholesale takeover by the right of an opinionated TV channel.
Barber:
Yeah, it's very much the American model, isn't it? Not least, of course, Donald Trump, a TV personality politician. I'm sure that Boris Johnson has looked at his career and thought, "I think I can borrow some of that." But you've seen a drift. I mean, LBC has been tremendously successful with the phone-ins where there is commentary, but the point here is that LBC does have balance. There's very strong commentary, but you can feel there's a bit of leftish and there's a bit of right. This GB News, it's black and white.
Rusbridger:
It is. I mean, I cycle into work every morning and I listen to Nick Ferrari and then I listen to James O'Brien. You have two entirely different political points of view. Well, Michael Grade I'm sure is a listener to Media Confidential. And Michael, if you'd like to come along and tell us what on earth is going on at Ofcom, we'd be only too delighted to have you.
Barber:
Seconded.
Rusbridger:
Now on Media Confidential, we like to bring you interviews with the key players in global media, and this week's main guest is certainly one of those.
Barber:
Yes, we've been talking to Mathias Döpfner. He's the CEO of Axel Springer, an international media group based in Germany. And full disclosure, I have known him for 20 years. We've been both social colleagues and commercial rivals.
Rusbridger:
Döpfner is a journalist as well as a businessman. He was Editor-in-Chief of the Hamburg Morgan Post, and he actually started his career as a music critic at the Frankfurter Allgemeine.
Barber:
A little bit of overlap here with you, Alan, Mathias has built Axel Springer into a global company with acquisitions in the United States like Politico and Business Insider. Not many German media groups have gone global so I asked him to talk about Axel Springer's ambitious international strategy.
Döpfner:
It is, I would say, more a transatlantic media group than truly a global media group. It is mainly Europe and America. And I had always had a personal interest and perhaps even passion for the United States. At a moment when we got closer to European market leadership in digital media, we realised that the growth opportunities in these relatively small language markets are limited. And then if we limit our activities to democracies, the biggest media market in a democracy is the United States. So it was actually a pretty obvious choice, and we have prepared for that, you could say, over many, many years also with a team of managers who have lived in the United States and worked in the United States so that the cultural shock is a little limited because many European and German companies have cultural shock experiences in the United States. In our case, I think that was pretty much the opposite. It was more like a homecoming.
Barber:
You own Politico, which has started in America, but then also this Politico Europe. How did these two entities work together and do you want to put them together to make something to rival, say, the Wall Street Journal and the Financial Times?
Döpfner:
So in general, we are not big believers in corporate synergies and all these cerebral structural thoughts about cost efficiencies and so on. It's rather how to empower, de-central entrepreneurial energy and journalistic charisma that is very often pretty much the opposite of corporate homogeneity. So that's how we run our portfolio of different assets and also our portfolio of media assets. And that's why we would never want to bring together, for example, Business Insider, Morning Brew, this digital newsletter for a rather younger business audience, and Politico. These assets, these brands remain relatively independent, but of course, if it is about Politico US and Politico Europe, it would be insane not to have, at a certain level, a management that is in charge of a global strategy that Politico Europe is an important element of.
So to be very precise, the newsroom remains independent and pretty separate. They can and should exchange interesting stories through corporate if it is about investigation, but they run their own products. If it is about management, ranging from technology to certain levels of cooperation in advertising sales, I think it is under the umbrella of the global political leadership in Washington.
Barber:
And tell us how you feel Politico in the US stacks up against rival publications and how do you measure whether it's actually being successful?
Döpfner:
It's interesting that you're asking me that because it is to be expected that I have a strong bias here. I think the interesting phenomenon is the brand is 15 years old. If we look to the respect and to relevance that it has gathered in political news reporting and also breaking news and scoops, I think that's remarkable. As always, for journalistic brands, they're sometimes symbolic if not iconic events. Like for the Washington Post, it was Watergate and for Politico in a way, Roe V Wade, this very important story that was based on material from the Supreme Court.
Barber:
Before the ruling.
Döpfner:
Exactly, before the ruling. I think that was an important moment. So Politico does well, but I think in general the most important thing is that you avoid any degree of complacency and Politico is still at an early phase of development. We want to internationalise the brand. It should go to different geographies in Europe. We have started a Politico London, a Politico Paris edition. We will launch a Politico newsletter as a first step in Germany. We are doing this California edition which is also a very important lesson, if that works, that shows incredible growth potential in the United States. But also in a way, strategically, Politico needs to be a brand that is in text, audio, and video almost equally present and that really takes advantage of the empowering tools of artificial intelligence and there is a way to go and a lot to do. So I would say we are still in the startup mode.
Rusbridger:
I'm fascinated by what kind of publisher you are, Mathias and I saw you quoted when you bought Politico as saying that you were interested in nonpartisan journalism, but of course, you have very partisan titles.
Döpfner:
I would disagree, if I may. That is always the cliche that Bild is partisan because it's a tabloid mass-market product with emotional, personalised headlines. I think it would only be partisan if it has a political agenda, if it supports one political party or if it is predictable in a certain respect. And I think that's not the case. So we would claim for the entire portfolio to be as non-partisan as possible, and as unpredictable as possible. Not neutral. Journalism is never neutral, but I would not say Politico is non-partisan and Bild or Welt or [inaudible 00:16:43] in Poland is partisan. Occasionally that may be the case, but then it's a mistake, then it's not good journalism.
Rusbridger:
Okay. In terms of your own role, I'm sure it was not something you welcomed when your emails were leaked, but it looked as though you had personal strong views and occasionally passed those views onto your editors in terms of asking your editors to pursue a particular line. Was that a misleading impression we got from those emails?
Döpfner:
Well, I still think that private conversation is something different. You cannot imagine what I say in private conversations. I have very explicit views even in public. How will that be in private conversations? And I take really the freedom to basically say and do, privately, whatever is in the framework of law and the constitution.
But I mean, in that school, you have to exaggerate to be understood. So I think the spice of nice punchlines and outspoken views is an important element in journalism if it is about commentary if it is about editorials, but the clear separation between news and facts and reporting on the one hand, and on the other hand, perhaps even polemic commentary, I think is an important distinction. And culturally in our company, the most important principle is that I worked many, many years to make sure that not everybody writes or broadcasts what I think is right or what we think is right. So it is all about plurality and it's all about the authority of editors in chief.
And part of that freedom is, of course, that everybody in the company can express her or his views. We have sometimes very lively debates. Suddenly Friedrich Klinger enters a room and says, "What a horrible story!" And the good thing is in our culture, the editor turns around and does exactly what he wanted to do regardless of these subjective views or commentaries.
Barber:
Your editors are free to ignore you?
Döpfner:
That's a wonderful way to put it.
Barber:
Yeah.
Rusbridger:
Okay. I mean, one reason to ask is that you once tried to buy The Telegraph and you've expressed an interest in buying The Telegraph again. And people generally want to buy titles in Britain either to make money or for political influence. What kind of an owner of The Telegraph would you be if you got it?
Döpfner:
So first of all, you will understand that we never comment on M&A speculation publicly, and so I stick to that principle now too. But perhaps one thing, just to put it into context, we have defined a clear strategy for the publishing group and that is that we want to become the leading digital publisher in the democratic world, that we focus on a digital-only strategy and that's why our growth strategy, being it organic or inorganic, would focus entirely on digital-only assets.
Barber:
I think it was 18 years or so you did try to buy The Telegraph and failed, and you came very close to buying my old newspaper, the Financial Times. What attracted you to the British market?
Döpfner:
The British market is a very lively, highly competitive traditional media market. It's a democracy. It's a very vital democracy with ups and downs, but altogether, still a lighthouse of democracy. It's also an important market quantitatively, and for these reasons, we still regret that the Financial Times and Axel Springer couldn't marry.
Barber:
We did talk about it, I remember. I can say this now. This is the open democracy here. When you and I had a conversation in Sun Valley about what it might be like working together with you as proprietor and me as editor, and I did say it would've been rather interesting, especially when you offered me a column or two on the op-ed page. But just going back, one last question on The Telegraph. I mean at the time, did you think there was an anti-German undercurrent at that time which blocked you from buying The Telegraph or do you think it was just that the Barclays, the Barclay twins had just more money?
Döpfner:
Definitely the latter. I think in both cases, it was unfortunately as boring as it may sound. Just the money. And we are a very disciplined bidder. We would never enter a bidding race, let's say, for prestige reasons. "We got to get it and we have to show that we are the biggest and whatever." That is not in our nature. So rather than miss an opportunity to remain disciplined and not overpay, and so it was only driven by that.
Yes, what you are recalling was an element, but I think it didn't play a role. There was a funny story, actually, from today's perspective, really funny. There was a British publisher who spoke up publicly and said, "Now the Nazis are coming to England and we don't want them." And then he realised after he published that he just picked the wrong example for that because of the history and the positioning of Axel Springer. He found out that he basically just criticised the wrong person and then we had a wonderful meeting in his office. He invited me, he apologised for that, and since then, we have had a fun relationship. So that was a little glimpse of this anti-German sentiment, but I didn't feel it in general at all. On the contrary, we felt very well received in England.
Barber:
Did you think, on a disciplined bidder, do you think that you now would still pay 500 million for Business Insider?
Döpfner:
Yes, very clearly. I mean, Business Insider was a very good acquisition and the development since the acquisition led, even sceptics who said at the beginning when we were making the acquisition based on a 400 million valuation that that was overpaid, they admitted a couple of years later that it was actually a very reasonable if not cheap price, because the value of the company went up since then.
No, no, we are super happy. I mean, of course, at the very moment, Business Insider is, like every media brand in the United States at the moment, suffering from some headwinds in digital advertising. But structurally over the last years, we are super happy with it and it broke even way earlier than expected revenue growth, in some years north of 30%, even 40% top-line revenue growth. I mean, I don't see so many media brands of that dimension which could claim that. We would definitely do that move again.
Barber:
Just to pick you up, when you said you're only interested now in digital-only products, does that mean that you don't have much faith in printed newspapers in future?
Döpfner:
I think that it is very clear and obvious that print will disappear over time. Now you can have a long debate, how long is that going to take? But it is very clear that the print reading habit is a generational habit. Younger cohorts only very occasionally do that or not at all, and I'm not very sad about that. It has been for many, many years, very clear that we have to emancipate the idea of a newspaper from paper.
If we say that great journalism and newspaper journalism are totally bound and linked to paper out of trees, then I think we make a terrible strategic mistake. It's like when the automobile came up and you were producing horse carriages, the only way to succeed in that transformation is to define what you're doing. It is not producing horse carriages. It is transporting people from A to B or producing interesting transportation tools. And our business is information. We want to inform readers. And if we can do that on digital distribution channels way better than ever on analogue distribution, that's actually great news.
And I have to say that this whole debate and slightly depressing tone, "The future of journalism is so bad because print is dying," I just don't get it. I think really the brightest future of journalism may be ahead of us if we learn the right lessons and do the right things. That is counting on journalistic quality and relevance, on news, to find out really something that was supposed to be not found out, which means investigative news, reporting, great correspondence, charismatic writers, editorialists, commentary writers, intellectual quality, intellectual charisma and relevance. That's what counts, and we can benefit from artificial intelligence big time in that context, I think.
Barber:
How exactly? Because you've been doing a lot of thinking about how AI will play out both in print and digital.
Döpfner:
I try to be as precise as possible. First of all, for everything that I'm now saying, there is one precondition and that precondition is that we come to a legal framework or to an ecosystem where everybody who is producing intellectual property has an incentive to do so, and that means has a business model. And that means, even more concretely, that we have to make sure that the revenues that AI platforms will generate in the future with the intellectual property of others, make sure that the creators benefit financially from what they are doing. How that is going to be engineered? That's a long discussion. We should probably not go into it.
And by the way, I don't have a simple solution, but I'm very confident since this is so obviously a game changer, not only in business but also for political institutions, and every politician understands that that can easily overrule her or his power. I think the likelihood that they will come up with something reasonable is very high. So let's take that as a given. There will be a healthy ecosystem where IP creators have still economic incentives to come up with IP. Otherwise, democracy is going to die. So let's not be too dystopia today.
Then I think very concretely, journalism can, to simplify, reduce and delegate large parts of traditional workflows and slightly less exciting elements of our work to bots and machines and can entirely focus on the exciting intellectual core of our doing. And that is great journalism. And with that, really work on the distinguishing factors and competitive advantages. And even more concretely, that means error correction in text, translation, layout, photo selection, technological production of a text or a video, and of course also text aggregation to just rewrite wire services and things like that. That all will be done in the very foreseeable future by bots. Almost no human being should be involved in that.
And that means that we reallocate the money that we save here into more investigative reporters, double, and triple the team of investigative reporting. More correspondence, more reporters who really go out and see something and describe reality because that's something that a bot definitely cannot do. They can help us to analyse data, to summarise long documents, but a good report that describes reality remains really something that humans can do better. And focus on that that makes journalism better, it makes it more relevant, and maybe even our business model more attractive. So I think it is, at the same time, an existential threat and a super exciting opportunity.
Barber:
Well, there's plenty of more to come from Mathias later in the episode. Must say, I was struck by what he had to say about artificial intelligence. He's got really the fervour of a convert and there are going to be job changes, job moves, some job losses. That is the coming story I think.
Rusbridger:
Yeah, so it's an interesting perspective, both as a businessman with an eye on the bottom line and as a journalist, because clearly there are quite mundane tasks within news organisations that can, probably already are be done by bots, and machines, but it comes with great perils. As anybody who's played with Chat GPT knows, it can hallucinate in the way that a grizzled old sub-editor, even after five pints, might not.
Lionel Barber:
I've certainly seen a few hall hallucinations there sometime after nine o'clock in the evening. But yes, it's not enough to have guardrails. It's interesting, by the way. I was talking to one editor-in-chief who's basically saying we are not going into this area at all. We're having, in a sense, a moratorium on AI deployment.
Rusbridger:
I'm not sure that's sustainable for very long. I mean I'm sure you've played with it. I've played with it. We played with it in the Prospect newsroom and we are treading with great care. But it is astonishing what it can do and I think it'd be foolish to turn your back on it altogether.
Barber:
In a few minutes, Mathias Döpfner talks about Elon Musk, who's a personal friend, and why trade and capitalism have not brought democracy to countries like China, as many in the West believed they would at the end of the Cold War. But let's go back to another part of our conversation, the future of these key UK media titles.
Clip:
Now almost since its first edition in the 1850s, The Telegraph newspaper has printed each day with a motto, "Was, is, and will be." What it won't be anymore is owned by the billionaire Barclay family. The entire business, which also includes the Spectator magazine has been put up for sale after a row of its lenders.
Clip:
Basically, the Barclay family, billionaires though they are, owe Lloyd's Bank close to just shy of a billion pounds.
Rusbridger:
The Telegraph media group's got a valuation of between six and 700 million pounds and I'll try very briefly to summarise the numerous potential bidders. We've got the Daily Mail Group, obviously competition concerns if that went ahead. There's a little-known Czech multi-millionaire, Daniel Křetínský, who's been funding newspapers in France including Le Monde. We've got the new kid on the block, Paul Marshall, who's behind GB News. We've got David Montgomery who bought all the old Johnson Press titles. Sir William Lewis, as we must call him, a former editor of The Daily Telegraph, is supposed to be there with Middle Eastern money. Axel Springer, we've already mentioned. And amazingly enough, and this is a curveball, the Barclay brothers themselves, or the remaining Barclay brothers, and their sons have made an astonishing bit for a billion pounds, which is way over the notional value of the titles. It's been rejected, but it's there on the table.
Barber:
And a couple of weeks ago, journalist and academic Jane Martinson joined us to profile the secretive Barclay twins and their family. And she talks about her new book, You May Never See Us Again, the Barclay Dynasty. You can hear that in episode four of Media Confidential. But we held this part back to play for you now. And here's Martinson on the battle to own the Telegraph.
Jane Martinson:
I'm now old enough that I covered the purchase by Barclays of The Telegraph the last time around as Media Business Editor at The Guardian in 2004.
Barber:
That was from Conrad Black.
Martinson:
Nearly 20 years later, when we all know what's happened to newspapers in terms of revenues and readership since, still as many people are very keen to buy the Telegraph. And that's partly because of the nature of media and influence and partly because of the incredible timing of this. It's a historic national newspaper, yes, but it's a time when the media is going through this massive shift. And also politics. We've got the election next year. If, as the polls predict, we will have a labour government, then whoever gets to own The Telegraph will possibly have a big say in who the next leader of the conservatives, the real voice on the right. So lots to play for, and lots of shifts, so good time to own a big national newspaper.
Barber:
Conventional wisdom says that legacy media is well past its peak in terms of profitability and influence. I mean, are you surprised to see so many bidders? What are they aiming for here?
Martinson:
There are different buyers if you clump them in different bits. Obviously, Lord Rothermere at the Mail, who wanted it last time, but pulled out because of competition concerns. So that raises interesting questions about whether it doesn't matter anymore how many newspapers you have, which are right-leaning, because there's so much else, so many other voices online. There's also the issue of Sir Paul Marshall, who is the major investor in GB News and Unheard, who, having talked to lots of people who know him over the last couple of weeks, he's very interested in the whole freedom of speech. He's libertarian when it comes to having your voices heard. And then, of course, there are journalists like Will Lewis or David Montgomery, people who have different opinions. I think they're after the same things people always want with newspapers. They have an influence and a position that punches above their profits.
Rusbridger:
Does it surprise you that the remaining Barclay family seems so determined to cling to it? I mean, this extraordinary bid of maybe 300 million more than others are expected to bid. Why are they so desperate to cling to this title?
Martinson:
Now that, I would only be able to hazard a guess. I think it means a huge amount to them. I think losing that quite soon after losing the Ritz, their two absolutely most prized assets, in terms of the family ownership and the power and influence that holds is obviously attractive to them. I mean, it'll be so interesting to know who in Abu Dhabi is providing the money and what sort of stake they get. But I mean the clever thing about this is if it's a debt swap, what they're presumably hoping for is that they don't have to do a change of ownership. And so Lloyd's can walk away with the money and they just get to, instead of owning it with huge debts to Lloyd's, they own it with huge debts to Abu Dhabi investors. And I think Lloyd's before doing that will absolutely want to see the money and see where it comes from and literally probably have it piled up in note form. Not that they do that anymore, but the equivalent.
Barber:
If the Daily Mail group get the titles though, that would give them more than 50% of the domestic market. I mean is that a problem in the new media age?
Martinson:
I mean, the Secretary of State will probably do a public interest notice, I think, because of the nature of the Telegraph, particularly in that case, because that would be such a dominant voice, and Ofcom will get involved as well obviously as the CMA, will be what yardstick they use. Do they say, well now voice has become... It's not about the paper, it's not about having a legacy title. It's about online voice. The interesting thing though, if that was the case and they were really not at all powerful, why are so many people interested in buying the Telegraph?
Rusbridger:
Now we've already got a Russian-born owner of one UK title, Lord Lebedev of Hampton and Siberia. We've got Saudi money in the Independent. We could have Saudi, Qatari, Abu Dhabi, and Czech money in owning the Telegraph. Does that matter? Are people uneasy about that? Can you honestly cover those regions without fear or favour if you know that that is where your money's coming from?
Martinson:
Very good question, and not yet been tested by any regulatory power or government indeed. So, so far we've had an investor from Saudi Arabia, a businessman who is understood to be 30% of the Independent and Standard, and there were no questions asked. So there's an understanding that there is a cap. As long as that foreign investor is from what's considered a relatively friendly state, so not Russia, then they can have a minority stake.
Now that hasn't been tested. It's a newspaper group, the same as a football club. I think most of us who've been involved in journalism would say no, you would hope people in government would say no, too. I mean Saudis are obviously very interesting because they do not have a good reputation by any means for freedom of the press. UAE is different. We don't even know who it is that we are meant to be speaking about. This has not been an open process so far, but then it's very early days.
The only thing I would say is Lloyds are very keen to get rid of this before the election. No highly regulated bank wants to own a newspaper that backs the conservative party and has always gone going into a general election. So they'll want to do this soon. So all these issues about regulation, it's not just price, it's speed with this sale.
Barber:
Jane, I'm going to put you on the spot and say who is going to actually win this title?
Martinson:
Oh, there's so much to play for. Honestly, there is. There's so much because I think now that the Barclays if this money is real, I mean really if they've managed to get a billion pounds from somewhere in Abu Dhabi, and Lloyd's can see that money and go away without all of this, that's quite tempting for Lloyd's with its shareholders. And then we won't even have a process and a bid. So I think it's going to be really fascinating.
Rusbridger:
So in some ways, Lionel, Jane's book, which is very timely, is an obituary for the Barclay Brothers era, which we thought was behind us with the sale of the titles. But I mean, what do you think is going on with this astonishing bit of a billion pounds to get their old newspaper back?
Barber:
Well, you have to remember that the Barclay twins, to buy the Telegraph back in 2005, took out a loan to finance the bid and that was around half a billion. And over the years, there was interest accumulated, and a decade on, Bob's your uncle, the amount of money owed to Lloyd's was over a billion pounds. As I understand it, the Gulf investors, there could be UAE, Abu Dhabi money, and maybe Saudi money, but the Gulf investors who've essentially said they will take the loan off Barclay's hands and they will repay Lloyd's that billion and then the Barclays can run the group.
Now, of course, the Barclays will be in hock to the Gulf investors. And you have to ask, is this a form of indirect influence? Why are the Gulf investors doing this? Do they want to come into media ownership through the back door? Certainly, Danny Kruger, the Conservative MP for Devizes is asking questions about this. He's urging Culture Secretary Lucy Frazer to issue a public interest intervention notice into the funding behind Barclays’ efforts to regain control of their newspaper.
Rusbridger:
Well, that's a fascinating background and again, this is a story that I think is going to earn running throughout the autumn and will doubtless return to that. Coming up, is more from Axel Springer boss Mathias Döpfner on Elon Musk, who I think is a friend, and he may even have encouraged him to buy Twitter. And on his recent book on Trade and Democracy.
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Barber:
This is Media Confidential with Alan Rusbridger and Lionel Barber. And now more from the CEO of the International Media Group, Axel Springer, Mathias Döpfner, who's been giving us his views on the present and future of media and journalism.
Rusbridger:
And in this next part, we discussed media trust, democracy, and global trade, and also social media, because before it happened, Döpfner was reported as being keen for Elon Musk to purchase Twitter. So how does he think that's going?
Döpfner:
Yeah, that recommendation came in combination with the idea that perhaps somebody who has experience with a media business may help here. The jury is out. I think it is early. I don't want to join that choir of people who say, "Well, it's everything bad and wrong." I think it's a bit like what Reed Hasting said. He said other billionaires are buying a big yard. Elon tries to improve social media. So let's see. Let's look at it in two or three years. I think it is way too early. He's one of the most successful entrepreneurs and inventors, so I would count on some good ideas coming up in the future.
Rusbridger:
But is it really too early? I mean, the abolition of all the trust and safety teams and the attempt to try and turn it into a better and more civilised space. I mean, we can see that's not working, can't we?
Döpfner:
I mean so many people seem to be insiders in X. I'm not. I just don't have enough inside knowledge to judge that. I think it's a radical transformation or change in the business model that comes with big changes and sometimes also bumpy phases. But I would just say, given the experiences over the last years and also in other cases, let's be a bit more patient and then we make... At least I, I mean, other people having made their decision. I haven't.
Barber:
Mathias, you've written a very interesting book called The Trade Trap, How to Stop Doing Business with Dictators. This to me has one very important lesson both to journalists and politicians, that in a way this view that we had after the end of the Cold War, that essentially by integrating a country like China into the world trading system, it would suddenly become more like us, play by our rules. And you show, quite vividly I think, both in terms of your reportage but also your interaction with leaders that this has not been the case. Can you talk a bit about that and talk about the way forward?
Döpfner:
I think this idea of change through trade that has been used very often by many politicians, including almost all German chancellors since Helmut Kohl proved to be wrong or it came true but a bit differently than originally intended. Because the intent was the more trade you do, the more an autocratic system will open up, the more freedom, human rights, rule of law, and democracy will come up. And pretty much the opposite was to authoritarian systems like Russia, like China, like some Islamist countries got even more authoritarian. I don't see a single example where a country really became, as a consequence of intense trade, more liberal, while democratic economies have been weakened significantly.
And I think the membership of China to the WTO in December 2001 is a symbolic example. This whole membership was based on double standards. The principle of symmetry or reciprocity was absolutely not given. China enjoyed the status of a developing country despite the fact that it is meanwhile the second-biggest economy in the world. When China became a member, its contribution to world GDP was 3.8%. Today it is north of 18%. While the contribution of the United States and of Europe went down significantly since then. And also in absolute numbers, you see that the winner of that asymmetrical trade was China. It has created dependency in Europe with regard to German automotive industry, with regard to American antibiotics. Perhaps in the future it may even, if the Taiwan annexation takes place, even control semiconductors.
So I think we have to be realistic. This idea of free trade is not reflecting the intentions of Adam Smith. I think it is pretty much the nightmare of Adam Smith, what is happening at the moment, and we have to rethink it. Just to continue as we did is naive. And if it needed one last warning wake up call, it is the Russian war in Ukraine. This Russian war has been financed by Germany, by Germans' unnecessary dependency on Russian gas. When [inaudible 00:45:47] took office, Germany consumed 35% of Russian gas. Today it's 65%. And that has financed Putin who tries to take over Ukraine.
Barber:
Well, you mentioned Chancellor Merkel. Do you think that history will view her rather differently than say five years ago when she was acclaimed as quote, in the Trumpian age, as "the leader of the West"?
Döpfner:
The short answer is yes, Lionel, I think that.
Barber:
Very diplomatic for a former journalist and... Oh, still a journalist, a writer.
Döpfner:
I warned you. I said I'm always exaggerating and I have a slightly polemic element in my nature. So play with it. And yeah.
Barber:
When we have a chance, I'll talk to you about English understatement. Mathias, you've been very critical of Google over the years, anti-competitive practises. Do you think that your judgement is vindicated or do you think that Google might be broken up, or in the new age of AI, may actually be a declining force?
Döpfner:
Well, I think unfortunately a lot of things that we were discussing or criticising 15 years ago or 10 years ago became true, and in certain areas, it is even too late. The [inaudible 00:46:59] of market dominance here and there is so obvious that it is too late to have that discussion. But I think we are now facing really a super exciting next phase. And there, everything is possible. And that is really AI and open source.
And the question is, is that going to strengthen the monopolies or the duopolies even more? And in the end, we have two players here, Google with Bard, and Microsoft with Bing Chat and Chat GPT. And because of the data lake that they own and because of their competitive advantages, they will avoid or oppress all competition. Or is it possible that the era of large language models and open source is stimulating a very, very unpredictable and diverse competition that may then even challenge former super giants and gatekeepers like Google? I think truly both is possible and I wouldn't dare to judge at the moment. It's a very exciting new era that is just starting.
Rusbridger:
Question about trust. I guess we're united in believing in journalism and believing that journalism is necessary for a good democracy, but the public doesn't seem to agree at the moment and there are huge declining levels of trust in all the markets you operate in and certainly in the UK in journalism. What are we doing wrong?
Döpfner:
I'm truly convinced that trust is the most important promise that serious media brands and institutions make. And it is an object defect that that promise or the delivery on that promise or the perception on the delivery of that promise is deteriorating in high speed. And I think that is the most worrying thing.
Isaiah Berlin once wrote an important text where he tried to find out where there is something like universal value and he came basically to the conclusion there is none, because one society is more about freedom, the other one more about equality, the other one more about justice, whatever. There is one thing that seemed to be the only universal value and that is trust. Everybody in every culture and every country in every social context expects to be trusted and wants to trust. And if we lose that, that is perhaps the most serious threat for our future. It's not technology. That's actually something that we should embrace. It is really that.
And why is that so? Well, that's really a topic for another podcast. The short version is journalists perhaps have to leave our own bubbles and get closer to people's real lives and real interests and real needs. And the best way to do that is not by judging things or educating people, but more by finding out things, so more driven by curiosity. I think that would be the best model to counter that. Find out what happens and inform. If we would do that, I think that has the chance to reestablish trust. And as I said, I really count on the wake-up call that artificial intelligence large language models gave us. This, in combination with the deterioration of trust, should be enough of a warning to say we have to get better, we have to do things differently, driven by curiosity, not by judging things.
Rusbridger:
Mathias Döpfner, what can I say other than danke schön?
Döpfner:
Danke schön. Thank you. It was fun talking to you.
Barber:
Well, Alan, I don't think that Mathias is quite as big a name-dropper as me, but I must say, reading that book, he's interviewed some big leaders. Vladimir Putin. That's how it opens. He had a session with Tony Blair when he was trying to buy The Telegraph actually in 2005. He's complimentary about Tony Blair. And President Erdoğan. And of course he knows Angela Merkel very well indeed and is somewhat critical of her as a political leader, although he's English diplomatic at the end of our podcast, I see.
Rusbridger:
He was even more diplomatic, I thought, on his relationship with Musk and how he thinks Musk's ownership of Twitter is going. I guess if you are friends with a guy, then you're not going to come on media confidential and slag him off. But I could sense him staring uneasily in his seat when we asked him about that.
Barber:
Of course, the other big media event, technology event as well, is the conference chaired and convened by Rishi Sunak at Bletchley Park, the site where all the code breaking was done during World War II, on artificial intelligence. I mean, this is partly a political move to position Britain at the centre of global governance, if you like, on AI.
But I'm also intrigued by what are the rules going to be? What are they? They're talking about guardrails. Well, you can have malign actors, how do you stop them? But then there's also another dimension and there's a friend, Lynn Rothschild, who's actually taken out a full page ad in one of the major newspapers and writing commentary saying, this is the moment that we should be talking about inclusive capitalism, addressing matters of inequality, and not allowing AI to, if you like, deepen the digital technology divide. And I think that's a debate worth having.
Rusbridger:
It strikes me how late these discussions are. I spent time in Oxford and saw a gigantic gift by Schwarzman of Blackstone, 70 million pounds to fund a centre to think about AI and ethics. But in a sense, all this is happening, we're struggling to keep up with what the engineers are doing.
Barber:
Yeah, indeed. I mean, he came up with that plan back in 2018, '19. It's partly because COVID, Brexit in this country, swamped everything. Partly because, and I'm writing something about this, AI really only broke into the public consciousness I think in the last 12 months. And that was, of course, through Chat GPT.
Rusbridger:
And when people started playing with that, the penny dropped in a big way.
Barber:
It's actually not a penny, Alan. OpenAI is currently valued at around 86 billion dollars.
Rusbridger:
You always had a head for figures, Lionel. That's why you edited the Financial Times. If you have any questions for us about the media, please send them to MediaConfidential, all one word, @ProspectMagazine, also all one word, .co.uk and we'll answer a few of them in a special future episode.
Barber:
Thank you for listening to Media Confidential, brought to you by Prospect Magazine and Fresh Air. The producer is Danny Garlick.
Rusbridger:
And remember to listen and follow us wherever you get your podcasts with new episodes every Thursday.
Barber:
And we're on Twitter slash X to, @MediaConfPod.
Rusbridger:
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