US media group Warner Bros Discovery is to sell its stake in GB News, in a shake-up which has seen the loss-making television channel’s co-founders sell-up and resign as directors, and the remaining backers step forward with a further £60m in cash.
The fledgling news channel, which originally said its first £60m fund raising last January would last three years, has tapped Legatum Ventures and hedge fund boss Paul Marshall for more funds after just 18 months.
The company also announced that co-founders Andrew Cole and Mark Schneider, who set up GB News’ parent company last February, have resigned as directors and sold their stakes in the business.
Warner Bros Discovery said its decision to leave GB News was due to a rationalisation of its portfolio following the merger of Discovery and WarnerMedia.
Discovery was the first major investor in GB News injecting £20m of the first £60m round of funding last January. Legatum then matched that investment becoming the venture’s joint biggest shareholder. Discovery’s desire to leave the venture first emerged in June.
“Following the merger between Discovery and WarnerMedia earlier this year our portfolio now includes several wholly owned news brands including CNN Worldwide, TVN Group in Poland and Newshub in New Zealand,” a spokesperson for WBD said. “In light of this, and our continued evaluation of our global and local investment portfolio, we have exited our investment in GB News and are no longer shareholders.”
The latest round of funding has been led by existing investors Legatum Ventures, the Dubai-based investment firm co-founded by GB News chairman Alan McCormick and Marshall. Legatum and Marshall have bought the stakes held by Discovery, Cole and Schneider.
“This is testament to our confidence in the momentum and trajectory of GB News after a very strong first year,” McCormick said. “Our additional investment means the channel will embark on robust and exciting plans for the next stage of its growth and development.”
GB News, which has gradually built viewing since going live 14 months ago, has had to deal with an advertising boycott by media agencies whose clients are wary of associating with the TV channel’s editorial stance.
It has also found itself in a head-to-head battle with Rupert Murdoch’s well-financed new rival TalkTV, backed by star signings including Piers Morgan, which GB News is currently beating in official TV audience ratings.
“Discovery was one of the first organisations to invest in GB News,” WBD said. “GB News has built a growing and loyal audience in its first year, bringing another voice to British news broadcasting, and we wish the management and shareholders the very best in their future endeavours.”
GB News said Schneider would remain a member of its editorial committee and an adviser to the company. “I will continue to lend my full support to a successful future for the company,” Schneider said.
However, Cole, who sat on the editorial and compensation committees, is leaving to focus on his fintech business Glow.
The company said the new funding, which is expected to be completed in the next few weeks, will help it expand its operation.
“We’ve already employed more than 200 journalists and now we’ll invest more deeply in a number of areas, including a new digital product suite, our technology and studio, subtitles, additional distribution platforms and exciting new talent,” said Angelos Frangopoulos, the Australian chief executive of GB News.
GB News announced a number of new hires including Michael Portillo, who joins the channel’s political team and will launch his own programme in the autumn; Camilla Tominey, in addition to her position as associate editor at The Telegraph; and the Daily Mail’s Andrew Pierce.