Negotiations between Egyptian intelligence and Saudi minister over news channel launch suspended after Khashoggi killing

Negotiations between Egypt’s General Intelligence Service (GIS) and Turki al-Sheikh, a Saudi minister with close ties to Crown Prince Mohammed bin Salman, over funding to launch a news channel have been suspended amid the political firestorm sparked by the killing of journalist Jamal Khashoggi in the Saudi consulate in Istanbul earlier this month.

The GIS, which owns the DMC television network, had long-standing plans to launch DMC News, a channel that intelligence agency head Abbas Kamel envisioned would grow to rival larger regional news outlets like Al Jazeera, Al-Arabiya and Sky News Arabic.

Sources told Mada Masr earlier in October that the DMC network had spent a whopping LE1 billion over the past two years without generating significant returns, leaving insufficient funds for the launch of DMC News.

In a bid to raise capital, several meetings with Sheikh were held at GIS headquarters between June and September, according to two official sources close to the negotiations, who spoke to Mada Masr on condition of anonymity. Top intelligence officials tried to persuade the wealthy Saudi sports minister to fund a news channel that would be broadcast from Cairo to counter the influence of Qatari media.

According to the sources, Sheikh gave initial approval for the project, leading officials from the intelligence agency’s media department to keep the producers, broadcasters and other employees expected to form the core of DMC News on the payroll.

However, as the negotiations continued, Sheikh demanded that he be allowed to purchase a majority stake in the Egyptian Media Group, another GIS-owned media company, for approximately US$750 million in exchange for funding DMC News. The Egyptian Media Group is currently the biggest media owner in Egypt, with several influential newspapers and television outlets under its control.

Sheikh’s proposal was met with mixed reactions within the GIS, according to the sources. Those who came out in support saw the potential for a significant injection of capital to the intelligence agency — after DMC had squandered hundreds of millions of pounds — in a deal that would also allow the GIS to retain a 49 percent stake in the Egyptian Media Group.

Others were skeptical of the offer, as it would essentially hand control of the majority of private media in Egypt to an influential Saudi official, raising national security concerns. The sources also pointed to separate, earlier negotiations when Sheikh had dealt arrogantly with GIS officials during a stand-off with Al-Ahly FC that resulted in his resignation as the club’s honorary president. Those opposed to the deal believe that his control of the media could exacerbate this.

Sheikh, the head of the Saudi General Sports Authority, was a major investor in Egyptian football, formerly owning Egypt’s Pyramids FC and the club’s TV channel. He withdrew his investments earlier this month amid a controversy with Al-Ahly, Egypt’s top football club, and its hardcore fan base, Ultras Ahlawy.

Until recently, there was more support within the GIS for Sheikh’s offer to acquire a controlling stake in the Egyptian Media Group. Yet once the details of Khashoggi’s killing emerged and the controversy rose to affect the crown prince and his associates, the GIS decided to halt negotiations. The sources also claimed that some within the GIS are trying to take advantage of the suspended negotiations to walk away from the deal entirely.

Meanwhile, Sheikh, who is also an adviser to the Saudi royal court and part of bin Salman’s inner circle, has become preoccupied with the fallout from Khashoggi’s killing, according to the sources.

The most recent development regarding DMC News, according to the sources, is that GIS leaders decided to appoint journalist Ahmed al-Tahriry as supervisor of the channel, replacing Manal al-Daftar, who resigned in September. Tahriry is expected to manage the channel’s work temporarily until its fate is determined, although all signs point to the project being scrapped.

Egypt’s intelligence services have extended their control over the press in recent years by taking over private newspapers and television channels and dominating the media landscape.

In December 2017, Mada Masr reported that the Egyptian Media Group was acquired by Eagle Capital for Financial Investments, a private equity fund fully owned by the GIS. The Egyptian Media Group is the parent company of several media organizations, including ONtv and the Youm7 news organization, while D Media, which is also owned by the GIS, owns the DMC network, Radio 9090 and mobtada.com.

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