The two companies announced their intention to join forces back in June, but had to await the ruling of the government authority, which granted the request Wednesday on one condition. Before the deal can be completed, Reshet must sell its stake in “The News Company,” formerly known as Channel 2 News.
Until last November, Reshet and Keshet shared airing rights on Israel’s Channel 2, the oldest and largest commercial broadcast station in the country. But in the wake of legislation aimed at boosting competition in the TV market, the broadcasters were forced to split into two separate channels last year.
Reshet has suffered in ratings and revenue since the split. Channel Ten, Israel’s only other commercial network, has also been struggling, and the two viewed a merger as the only way to stay afloat.
A spokeswoman for the Antitrust Authority said Wednesday that, though the merger “raises concerns about harming competition,” blocking it could prove even more damaging.
“According to our investigation, in the absence of the merger, Channel Ten is highly likely to exit the market entirely, which raises serious fears about harming the market and the public,” said the spokeswoman, Sivan Carmon.
Since Reshet and Keshet split last year, they have aired their own independent programming seven days a week – except for every night at 8 p.m., when both stations broadcast the same news program from “The News Company.” If Channel Ten were to close, Carmon said, “there would remain only one central news company in the market.”
Reshet – which has been behind hit shows such as “Harem” and “Nevsu” – was widely expected to have to sell its stake in The News Company, and it has reportedly already discussed the sale with Keshet.
According to Israeli media reports, Channel Ten – which first hit the airwaves in 2002 – could stop airing as early as October following the merger with Reshet. Reshet CEO Avi Zvi is expected to take control of the combined company.
“The Antitrust Authority’s decision is a courageous and correct decision, which will save the Israeli TV market,” Reshet and Channel Ten said in a joint statement, adding that they would try to retain as many employees as possible in the merger.
The decision, the two broadcasters said said, “will allow competition on the screen in programming and news, and allow creators and content producers to focus on creating rich and quality Israeli programming for the good of the viewers.”
Reshet mostly airs Israeli versions of reality shows such as “Big Brother,” “The Voice,” “Survivor” and “Amazing Race.” Channel Ten mostly broadcasts news and documentary programming.