Cash-strapped b'caster hunts wealthy backers
JERUSALEM — Less than two years after it first went on air, it’s make or break time for Israel’s second terrestrial commercial station Channel 10 — yet again.
Teetering on the brink of financial collapse, the fledgling web won a two-month extension of court protection against creditors earlier this month. It was the latest of several 11th hour extensions but the Tel Aviv District Court indicated it would be the last.
The channel has until Dec. 11 to find a solution. Controlling shareholder Yossi Maiman, owner of the investment group Merhav, has been injecting $1.5 million a month into the channel since May.
“We would like Channel 10 to survive but if a solution cannot be found we will reissue the tender,” says Ayelet Metzger, deputy director general of the Second Television and Radio Authority that supervizes Channel 10 and its more established rival Channel 2.
Last July, it seemed Channel 10 had found a savior in Mexican tycoon Moshe Saba. He had been expected to buy a 49% stake for $20 million, but pulled out early September after media furore over comments that he would clean up the channel’s content.
A post-Saba offer by Keshet chairman Moshe Wertheim, the wealthy owner of the Coca-Cola franchise here, was rebuffed for being too low.
Wertheim is reported to have approached U.S.-Israeli media mogul Haim Saban to join him in a bid when he was over for statesman Shimon Peres’ 80th birthday bash late September.
A separate joint bid being mulled by Reshet and Tel-Ad has yet to materialize.
Taking control of Channel 10 would force major shareholder changes in both franchisees.
Ma’ariv, which owns 29% of Reshet, and rival tabloid Yedioth Ahronoth, which owns 24% of Tel-Ad, would have to divest their stakes due to cross-media ownership laws.
The most serious offer on the table is reportedly that of Ben-Tzvi although negotiations have been on hold over the Jewish High Holiday period.
“My understanding is that a deal is very ripe,” said one source.
A key player in the religious Zionist media sector, Ben-Tzvi owns Techelet, a niche religious cabler featuring programs such as the first Hassidic soap opera and a travel show called “The Wandering Jew.”
Last July, he also acquired an 80% stake in the religious Zionist newspaper HaTzofeh alongside U.S. cosmetics heir Ronald Lauder and also owns the conservative weekly Makor Rishon.
Channel 10, which has monthly costs of roughly $3.5 million and advertising revs of $2 million, continues to broadcast its daily offering of news and foreign acquisitions such as “Home and Away,” “Baywatch” and “24.”
Maiman has reduced his monthly investment to $1 million. He also recently ditched plans to acquire a packet of Warner Bros. product featuring “The Sopranos” and “West Wing.” It was subsequently split between Reshet and Tel-Ad.
Alongside Channel 10’s immediate woes, rival Channel 2’s future is equally uncertain.
The Second Television and Radio Authority will reissue a new tender for the channel next September for a November 2005 start.
Uncertainty over whether Keshet, Reshet and Te-Ad will retain their franchises has reduced investment in local documentaries, fiction and features to a trickle.
“We would prefer to reissue the tenders earlier. The uncertainty is bad for all concerned,” says Metzger.
Israel Film Fund general director Katriel Schory says investment in local features films by the three franchisees has dried up.
Ironically, Channel 10 invested in the biggest local hit of the year, the bittersweet romance “Nina’s Tragedies,” which clinched the top prize at the Jerusalem Film Festival in July.