New tender made for first commercial channel

Israelis have been waiting four decades for commercial TV. The long wait may be over.

Despite the onerous task of applying for a franchise (the bid submission of one contender filled more than 6,000 pages), a new tender for a new channel closed yesterday and commercial broadcasts could begin as early as October.

Israel’s state-run channel, Israel TV, is funded by license fees from all owners of TV sets. Cable TV, which was established here in 1990 and now reaches 430,000 Israel households, is based on subscriptions.

A previous attempt at commercial TV failed last September because potential bidders refused to pay the high royalties demanded by the government. The new tender will require franchise owners to pay the government an 8% fee on gross income.

To ensure that the station would not become the monopoly of any one company, the maximum percentage of ownership of any one firm will be 25%.

Each franchise will rotate days of broadcast, with Saturday being rotated among them every three weeks. In the first year, the Second Channel will broadcast nine hours a day, and in the second year, 12 hours.

The station will be financed by commercial advertisements, six minutes per hour.

According to the conditions of the tender, one-third of total broadcast time will be allocated to local programming, excluding news, talkshows and current affairs programs.

Local media analysts doubt whether Israel’s nascent TV production industry will be able to meet this challenge. They claim that, despite what the law says, the majority of programs will be foreign, at least in the first few years.

This will mean that each franchise owner will buy approximately 600 hours of programming a year from abroad.

Some of the largest financial institutions in Israel participated in the tender, including the major players in the print media, banking, industrial, trading, insurance and real estate industries.

One of the front-runners for a franchise is Telad Studios, Israel’s largest production house, producing more than 350 programs a year and seven weekly series for Israel TV.

Burbank-based Shamrock Holdings Corp., the holding company for all broadcasting stations owned by Roy Disney, has invested approximately $ 4 million in a 23% equity purchase of Telad Jerusalem Studios.

Another leading contender is the Globus-Group (Israel) headed by Yoram Globus , the former owner of Golan-Globus films. Globus’ company has invested $ 35 million in a 50-acre television studio and facilities for satellite links just outside Jerusalem. The company is currently negotiating with a large Hollywood studio for programs and films for the new station.

Other foreign companies that participated in the tender via local Israeli consortiums were French media owner Jean Friedman and CAN WEST from Canada.

Israel’s ministry of communications says that within 45 days it will award the franchises to three out of the seven groups that participated in the tender.

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