Sources inform "Globes" that starting this week, “The Jerusalem Post”, Israel’s leading English-language daily, will be printed at a printing house in Rishon LeZion owned by Mirkaei Tikshoret, not in Jerusalem. Fourteen print shop employees in Jerusalem received dismissal notices from the newspaper. “The Jerusalem Post” general manager Moshe Bar-Zvi, who was responsible for deciding to transfer printing to Rishon LeZion, confirmed the report.
Bar-Zvi became general manager several months ago, when Mirkaei Tikshorert, controlled by Eli Azur, took over the paper. Firing the printing employees and moving the printing of “The Jerusalem Post” to Rishon LeZion, part of a general streamlining at the paper, were among Bar-Zvi’s first decisions.
”The Jerusalem Post” has suffered more than a few severe problems in the past two years, particularly its printing department. Golden Pages (Dapey Zahav), among the printing department’s largest customers, announced eighteen months ago that it was discontinuing the printing agreement between them. Haredi (ultra-Orthodox) newspaper “Hamodia” recently did the same.
”Before the decision to transfer printing to the new printing house in Rishon LeZion, we compared prices between the two locations, and discovered a wide gap in favor of the new printing house. Economically speaking, it’s impossible to continue printing in Jerusalem. When I became general manager, I looked at the bases of the calculation, and then I took the next step comparing the products. I discovered that the printing press in Rishon LeZion is much more up-to-date. Not only does it print much faster, its printing is also sharper, and we’re getting amazing responses from dozens of customers, who have been impressed by the printing quality. This goes beyond the economic issue. We can only lose by continuing to print in Jerusalem it’s more expensive, and the product in Rishon LeZion is better,” Bar-Zvi commented.
Bar-Zvi added, “Over the past two years, we’ve lost large customers, such as “Hamodia” and Golden Pages. Things reached a point where a shakeup became necessary: we had to either improve our pricing calculation, or something else to help the printing department cope.” Concerning the firing of 14-15 printing workers in Jerusalem, Bar-Zvi said, “I’m working with several parties to see whether new customers can be brought to the printing house in Jerusalem. At the moment, we’re checking to see whether this is possible, but there’s no guarantee, because it’s not an easy market, although we’re trying. If it doesn’t work, we’re also checking the possibility of having some of the printing employees work in other places, or moving to Rishon LeZion.”
Figures supplied by “The Jerusalem Post” show that as of now, the newspaper has 8,000 weekday subscribers and 4,000-6,000 people who buy the newspaper from newsstands and other sources, without being regular subscribers. 25,000-30,000 copies of the weekend edition are sold, most of which are not to subscribers. Only the newspaper’s magazines, “The Jerusalem Report”, and the “Jerusalem Post International Edition” are sold overseas, where the number of subscribers is over 70,000. “I received an organization with a promising future, but a difficult present. Before we get to the promising future, the hemorrhaging at places in the group must be stopped, both in the printing division and in distribution. I’m going back to the offices in New York in ten days, where I dealt with “The Jerusalem Post’s” cost structure in the US. Saving on costs is due to my confidence in the newspaper’s marketing future. I did similar things in New York, and didn’t experience what I’m experiencing now. Straightening out the present is designed to safeguard the future,” Bar-Zvi explained.
In November, a deal was signed by Mirkaei Tikshoret and Canadian media group CanWest Global Communications Corp. (NYSE: CWG; TSX: CGS) to jointly acquire “The Jerusalem Post” for $13.2 million. At this point, Mirkaei Tikshoret is the only company putting money into the deal, and consequently has sole control of the newspaper. CanWest claims that Mirkaei Tikshoret did not fulfill the agreement for creating a joint company to hold the shares in “The Jerusalem Post”, and that is why CanWest did not pay for its share.
Six weeks ago, CanWest announced it was beginning arbitration proceedings against Mirkaei Tikshoret, alleging unilateral violation of the joint purchase agreement by Azur. CanWest petitioned the Supreme Court of New York for a temporary injunction against Azur against the sale or transfer of any assets of “The Jerusalem Post”, firing of workers, and other changes at the newspaper.
Published by Globes [online] - www.globes.co.il - on February 24, 2005