Two years after the U.K. voted to leave the European Union, the country was still riding the wave of populism that would soon make Boris Johnson prime minister. Yet Andrew Cole, a British investor who sits on the board of telecommunications giant Liberty Global Plc, wasn’t seeing this political reality reflected on TV, at least not from the establishment BBC and Sky News. He wondered whether there might be room for a new channel that, as he later wrote on social media, would “provide balanced, truthful and optimistic coverage.” He pitched the idea to Liberty Chief Executive Officer Mike Fries. But Fries demurred on investing and suggested he meet with Mark Schneider, a former American colleague and the heir to a cable fortune, who had come to him with a similar proposition.
That June, Schneider, and Cole convened at the genteel Petersham Hotel just outside London on the banks of the River Thames. They sketched out their vision for a new broadcaster. (This story is partly based on interviews with people with direct knowledge of the project or close to the parties involved, some of whom asked not to be identified discussing private deliberations.)
It would take inspiration from Rupert Murdoch’s Fox News, which had turned its brand of conservative-led opinion shows into a $5.5 billion-a-year media colossus. Like Fox, it would offer 24/7 programming, combining news with personality-driven commentary. Like its U.S. forebear, it would focus on the country’s “forgotten” regions, speaking to the majority of Britons who’d supported Brexit and were fed up with institutions like the European Union and the BBC. They would even bring in as CEO a veteran of the Murdoch empire, someone who already knew how to apply the Fox News model.
The network’s name would do little to conceal its flag-waving ambitions. It would be called GB News.
In many ways, Britain would seem ripe for such an effort. In the 2019 elections, the Conservative Party won a landslide victory, as the left-wing Labour Party lost support from key constituencies in the north of England that had also voted for Brexit — a crumbling of the so-called Labour Red Wall that my Bloomberg Opinion colleague Therese Raphael likened to Donald Trump’s 2016 victories in the Democratic strongholds of Pennsylvania, Wisconsin, and Michigan.
Long-time Labour voters said they were fed up with what they perceived as the party’s anti-Brexit urban elite and involvement in the culture wars. A 2019 poll by JL Partners found that 78% of Britons agreed that “you have to walk on eggshells when speaking about certain issues these days.”
The pandemic has expanded the opportunity for news. As lockdowns came into effect last year, the appetite for content surged. And the news is the only broadcast category that hasn’t lost viewers to the web, according to data from Nielsen. GB News wants to target that audience of the news-hungry and dissatisfied.
“I believe our national conversation has become too metropolitan, too southern, and too middle-class,” Andrew Neil, the respected British journalist and chairman of GB News, wrote in the Daily Express in February. “The direction of news debate in Britain increasingly wakes and out of touch with the majority of its people. GB News is aimed squarely at those people.”
“Sky News and the BBC News Channel do a terrific job at bulletins — that’s not what we’re here to do,” said Angelos Frangopoulos, who joined GB News as CEO in 2019 after 18 years at Murdoch-owned Sky News Australia. “It’s going to be more of a free-flowing conversation about covering the news of the day.”
Frangopoulos has a vision of journalists driving around the country, shooting and cutting their own video remotely, and uploading it for broadcast. There’ll be no foreign correspondents (nor costly satellite broadcast fees) and just a small central newsroom in London’s Paddington district, likely in the same building as the Press Association — a news agency that’s jointly owned by British newspapers.
That pitch played well with investors. The venture raised 60 million pounds ($82.3 million) from three main sources: British hedge fund billionaire Paul Marshall, Dubai-based investment firm Legatum Ltd. and U.S. TV giant Discovery Inc.
Both Marshall and Legatum have a track record of backing Brexit-affiliated causes. Marshall gave the Leave campaign a 100,000-pound donation in 2016, and a think tank set up by Legatum in 2007 pushed for a hard Brexit, where Britain would leave the EU without any negotiations. (Both Marshall and Legatum declined to be interviewed for this story.)
Discovery’s involvement looks strategic in other ways. It’s currently rolling out Discovery+, the online streaming platform that’s struggling to distinguish itself from Netflix, Disney+ and Amazon Prime. If GB News finds a loyal audience, Discovery could consider acquiring the station and converting its viewers into subscribers. The model could help it in other European markets.
With a restless public, deep-pocketed investors and Fox’s successful template to follow, GB News has many of the ingredients for success in place. Yet anyone expecting it to attain even half of the financial might and cultural heft of its template is likely to be disappointed. Although political, social and economic divisions have risen in the U.K., they are unlikely to polarize the television landscape to the extent that Fox and MSNBC now demarcate the ideological spectrum of U.S. television. Neil himself told the London Evening Standard there’s no market for “that kind of hard-right stuff in this country.” Fundamental differences between the U.K. and the U.S. — in terms of audience size, the nature of the TV market and the regulatory environment — will make Fox’s model all but impossible to replicate.
Still, it’s hard to believe that GB News would exist if Fox didn’t.
Fox News began broadcasting in 1996 with the mantra “fair and balanced” to counter the liberal bias that Murdoch perceived in existing television news. In its first five years, the station lost more than $500 million. Murdoch bled money to find an audience, paying the cable companies to ensure that Fox News was available on all basic television packages. By 2001, Fox News was available in some 80 million American households.
The next challenge was to keep people watching so that the channel could start generating revenue. Murdoch and the Republican operative Roger Ailes, who headed the station, had an answer: news that engaged viewers at a visceral, emotional level and moved beyond the mainstream. By January 2002, its bombastic coverage of 9/11 had helped it overtake both CNN and MSNBC as the most popular U.S. cable news channel, a crown it would wear for the next 19 years until the storming of Capitol Hill this January.
Supporters of former President Donald Trump entered the U.S. Capitol's Rotunda on January 6. Saul Loeb/AFP via Getty Images
But more important than the audience’s size was its commitment. Rather than just making money from selling ads, Fox could use its dedicated audience as ransom. It stopped paying cable companies to reach viewers and instead started demanding payment for the privilege of broadcasting Fox. If a cable provider balked, Fox could threaten to leave and take its subscription-paying viewers with it, according to Andre James, the head of the media practice at Bain Consulting. So instead of spending perhaps $10 a month per subscriber, Fox News alone now receives some $2 a month per subscriber from the cable firms in the form of affiliate fees, according to Michael Nathanson, an analyst at MoffettNathanson LLC.
“That’s the lion’s share of the economics — affiliate fees,” said James.
Fox’s cable network programming division generated $5.5 billion in sales last year — of which $3.9 billion came from affiliate fees, more than three times the advertising revenue. And because that affiliate income comes at almost no incremental cost, it generates Ebitda, an earnings measure, representing 49% of sales. That makes it more profitable than Facebook Inc.
The problem for GB News is that Fox News’s recipe doesn’t exactly translate. For one thing, the audience in the U.K. is far smaller than in the U.S.: 28 million households, compared with the 121 million households stateside.
The affiliate-fee business model also doesn’t exist in Britain, which immediately caps GB News’s earnings potential. At most, TV stations can expect to charge providers 20 pence per month per subscriber on that basis, according to Richard Broughton, an analyst at Ampere Analysis in London. Fox makes more than 10 times that.
Introducing this model to the U.K. would also be tough because the American market is more competitive. The U.K. has only three pay-TV companies, versus eight main cable providers in the U.S. In the U.S., Fox could plausibly threaten to take its audience elsewhere. But with less leverage in Britain, that’s simply not possible.
GB News will instead have to rely on advertising and paying subscribers. While the station will be available free-to-air, it will also have a digital paywall to watch clips and shows online. Frangopoulos has teased an additional online social element so that viewers can continue conversations on its platforms. Couple that with a spendthrift approach, and a path to profitability opens.
But it won’t be easy, and it won’t even near the level of Fox News.
After its initial setup, GB News aims to keep operating costs low, at about 25 million pounds a year, though that could quickly escalate with big-name hires. That’s considerably less than Sky News, the well-respected 24-hour news channel owned by Comcast Corp., which spends close to 100 million pounds a year but recoups only about 60 million pounds of that.
Excluding any ad revenue, if GB News were to charge a 5-pound monthly fee, it would probably need some 450,000 paying subscribers to cover operating costs — a tough sell since people will already get that content free on their TVs.
Advertising looks more promising: Fox attracts about 2% of all U.S. TV advertising spending. A similar proportion of the 4.5 billion pounds that the World Advertising Research Council estimates brands spent advertising on British TV last year would be 85 million pounds. But for GB News to get anywhere near that number any time soon is hard to imagine.
Still, Frangopoulos has cash reserves that could mean he doesn’t need to turn a profit for at least three years, which is also when contracts to broadcast the channel on free-to-air will expire. As Fox News demonstrated, finding a loyal audience is the first step.
Yet here again, GB News will face another challenge that Fox News didn’t: British rules on media impartiality, accuracy, harm, and offense.
In the U.S., Fox is infamous for making outlandish and factually inaccurate claims that wouldn’t be permissible under guidelines from Ofcom, the British broadcast regulator. The U.S. doesn’t even have a comparable authority, but Ofcom’s code aims to prevent factual content on TV or radio — though not online — from misleading audiences in ways that cause harm and offense. Broadcasters have an obligation toward due accuracy and due impartiality. While the rules apply primarily to news coverage, they also have implications for talk and opinion shows.
Take the assertions made in 2015 on Fox News’s “Justice With Judge Jeanine” that the English city of Birmingham was a place “where non-Muslims just simply don’t go.” Because Fox News was also broadcast in Britain, Ofcom investigated the comments. Birmingham’s population is less than 30% Muslim. Ofcom also faulted Sean Hannity and Tucker Carlson’s coverage of the 2016 U.S. election for breaching impartiality rules. Fox decided to pull the station off the air in the U.K. in 2017 before those investigations wrapped up.
To be sure, presenters in the U.K. can deliver forthright opinions, and a show doesn’t have to present equal views from both ends of the political spectrum. But they do have to include some element of balance and can’t intentionally spread mistruths.
“It’s not that the content can’t be there, but that you have to take mitigating steps — warnings and the like,” said Lorna Woods, a professor of media law at the University of Essex. “If someone’s talking about lizards ruling the world, Ofcom’s approach is not to say that you can’t have a story about lizards ruling the world, but that you need to challenge that as well.”
Breaches of the rules can result in fines, but repeat violations are what cause real damage: Ofcom can revoke a station’s license. That, one suspects, is why Fox decided to pull its U.K. broadcast — it didn’t want to be forced to do so and was unlikely to tamp down its content to satisfy the regulator in a country where it had only a few thousand viewers.
The U.K. radio station LBC, which until last year hosted Nigel Farage, the outspoken former leader of the Brexit-championing U.K. Independence Party, has managed to carve out a distinctive, sometimes iconoclastic voice, in stark contrast with the BBC, without falling afoul of Ofcom. But the station stopped well short of the shock jocks that crackle across the U.S. radio spectrum. It’s a model GB News may want to follow.
Indeed, GB News’s leaders are cautious about any direct comparison with the U.S. model. “Fox News would not work here in the United Kingdom and that’s definitely what we are not doing,” Frangopoulos told Business Insider last month.
GB News will also face significant competition — not least from Rupert Murdoch himself. With his track record at Fox and 50 years of experience in the U.K. media market, he had been the GB News team’s first port of call as a prospective backer. But the pitch’s timing was inopportune: Months earlier, Murdoch had been burned by British regulators, who had blocked 21st Century Fox Inc.’s attempted acquisition of Sky Plc due to concern it would give him too much power over the country’s news media. Murdoch passed on GB News: Launching a new 24-hour news channel would do little to assuage those worries.
Still, the magnate didn’t completely abandon the opportunity. In 2019, News Corp. hired David Rhodes, a former executive at Fox News, CBS News and Bloomberg TV, to build a rival offering.
While addressing a similar audience, the approach itself is different. For starters, the as-yet-unnamed effort won’t be a 24-hour news channel; rather it will focus on what Rhodes is calling “hero shows” that will broadcast both live every evening and on-demand via smart TVs. Each program will reflect the different sections one might find in a newspaper: politics, entertainment, sports and so on. Its first show, dubbed “News to Me,” starts broadcasting in the spring.
The new venture will lean heavily on News Corp.’s journalists at the Sun and Times newspapers, as well as its talk radio stations. The shows will also be available on Tubi, the ad-supported streaming service that’s a pet project of Lachlan Murdoch, Rupert’s son and the co-chairman and CEO of Fox Corp. All of this should make it considerably cheaper to operate than GB News.
GB News will also have to contend with the country’s broadcast incumbents. In March, the BBC announced an overhaul that looks like a direct response to GB News’s courting of viewers outside London. The Beeb will dedicate an additional 700 million pounds to shows and news coverage from other British regions over the next seven years.
When Frangopoulos and I spoke over Zoom in March, GB News had come a long way. He’d announced a series of marquee hires, an agreement to broadcast on both free-to-air and pay TV, and was in the process of building a studio and newsroom. Of the 140 staff he plans to hire, there were so far just 16 full-time employees. They were working through 2,000 job applications. Initial plans to launch in the first quarter had been put on ice.
“We’re doing everything from building the business to ticking all the boxes: regulatory, licensing, logistics and programming,” he said. “Everything that you would expect in a startup.”
Earlier that day, Piers Morgan, the former newspaper editor and CNN host whom Donald Trump once called “ruthless, arrogant, evil and obnoxious,” had stormed off the set of “Good Morning Britain” after a co-presenter lambasted his comments about Meghan Markle. Within hours, Morgan had resigned as the show’s host. He’s yet to announce his next stop, but the departure prompted speculation he’d land at GB News. His 2 million-pound annual salary would be a big chunk of the budget, but perhaps it’d be justifiable as a marketing cost, given his 7.9 million Twitter followers.
The biggest coup to date for the station has been enlisting Andrew Neil as chairman and host of a flagship evening show that will air four nights a week and feature a segment dubbed “Woke Watch.” His pedigree has lent GB News more than a whiff of respectability: He spent 11 years as editor of Murdoch’s Sunday Times and built a reputation as a tough television interviewer hosting the BBC’s Daily Politics show for 15 years. Despite his conservative leanings, Neil is not well-loved by the upper echelons of the Conservative Party.
He’ll be joined by other moderately well-known journalists and personalities, such as Michelle Dewberry, a businesswoman and would-be Brexit Party politician who won the British edition of “The Apprentice” in 2006; Colin Brazier, an International Emmy-winning Sky News journalist; and Dan Wootton, a talk radio presenter and executive editor at Murdoch tabloid the Sun, who has a reputation for breaking celebrity scoops. Some hires are receiving shares in the venture, a luxury not afforded to employees of the BBC, which is government-owned.
Perhaps the greatest surprise is that no one tried to imitate Fox News in Britain earlier. In a nation where the populist tabloid press once bragged of its ability to sway elections — “It’s The Sun Wot Won It,” the Murdoch paper splashed on its front page after the 1992 election — television news has remained remarkably staid. Households used to define themselves by their newspaper of choice: proudly declaring that you read the conservative Telegraph or the Sun, or the left-leaning Guardian or the Mirror, and letting others infer something about your Weltanschauung. As newspaper readership has declined, nothing consistent has emerged to fill its place.
GB News founders Cole and Schneider aim to exploit that gap. Schneider in particular may have something to prove. At the turn of the millennium, he appeared to be in pole position to become the next CEO of UnitedGlobalCom Inc., the $2.5 billion cable company his father Gene co-founded and led. As head of UGC’s European business, however, Mark embarked on a debt-fueled acquisition spree that came unstuck when the dot-com bubble burst. UGC ended up merging with Liberty Global. He has since maintained a low profile, investing in a series of small media businesses from his base in London.
Can their station really emulate Fox News’s success? In economic terms at least, no; in cultural terms, probably not, though it’s worth remembering that it took years for Fox News to evolve into the agenda-setting voice of the U.S. right that it is today. It shares some common DNA with Fox News’s opinion-led model of current affairs coverage, a proposition that will resonate in a post-Brexit Britain undergoing some profound cultural changes. But while there’s a path to profitability, it will be hard to spin the same gold as its U.S. cousin, even relative to the smaller U.K. market. For all its transatlantic trappings, this will be a uniquely British effort.