New commercial television channel franchisees Israel 10 and Eden Broadcasting have merged. Following intensive week-long negotiations, the heads of both consortia signed an agreement last night.
The merger is supported by the Second Broadcasting Authority (Channel 2) and Antitrust Authority director general Dror Strum, although it is contingent on a legal amendment. Both parties believe that an amendment will be made in the first quarter of 2002. The point of the merger, among other things, is to facilitate the public and legal struggle to gain all necessary permits.
According to the Second Broadcasting Authority amendment, which is part of the Economic Arrangements Law, the franchisees of the two commercial channels will merge (each channel separately). Strum was in favor of this move, as well as the amendment that stipulated the new channel franchisees would merge six to nine months before a Channel 2 merger.
However, after pressure was brought to bear on the ministerial committee on legislation, it was decided that the two channels were inter-dependent and that the new channel franchisees would not merge before a merger by Channel 2 franchisees.
Under the agreement, an equally-owned new company will be set up by the two consortia. Following the merger, the holdings of shareholders in both companies will be diluted. The merger will be retroactive to 18 April 2001, the date the two companies won the tender.
Joseph (Yossi) Maiman will be chairman of the joint company, while Dov Tadmor will be vice chairman. Johanna Prenner and Ronni Algranti will be joint CEOs. At the same time, due to the large number of shareholders, an executive management of six people (three from each company) will be set up, headed by Eden Broadcasting chairman Ehud (Udi) Ben-Shach. Eden Broadcasting CEO Mordechai (Motti) Kirschenbaum will be appointed to a position on the board of directors that has not yet been decided.
As for agreements the companies made with content providers from among the shareholders, it was decided that the new company would honor the three production agreements Israel 10 made with Anani Communications, which has a 4.9% stake. The broadcasting agreements between Eden Broadcasting and the production company owned by Yehuda Talit, who also has a 4.9% stake, will be canceled.
According to a decision by the Second Broadcasting Authority, the third commercial channel will go on the air on February 28, 2002. However, it is reasonable to assume there will be a slight delay.
At the same time, the board of directors of the new channel’s news company decided at the end of the week to purchase news from Israel News, headed by Moshe Shlonsky. The company will produce news for the half-hour studio program every day at 7 pm, plus a short news broadcast at 10 pm.
The High Court of Justice gave Israel 10 the right to broadcast seven days a week on the third channel, starting February 28, contingent on various conditions. Eden Broadcasting will make every effort to start broadcasting on May 5, but may be granted an extension.
Published by Israel's Business Arena on 9 December, 2001