Sources inform "Globes" that the bids for the Channel 2 franchise are shaping up, and it appears that Keshet Broadcasting has made the highest bid, followed in order by Reshet Television, Tel-Ad Jerusalem Studios, and Canne TV.
Industry sources believe that Keshet’s bid is in the NIS 120-150 million range, Reshet and Tel-Ad NIS 100-130 million, and Canne TV NIS 70-100 million.
Although these are only estimates, the figures are substantially higher than the Second Broadcasting Authority expected. 30% of the evaluation of the tender participants is based on their bids.
At the same time, it should be kept in mind that whether one consortium bid NIS 120 million or NIS 150 million, it receives the same point rating for its bid in both cases, if it has made the highest bid in the tender. The main significance of the bids is their ranking, relative to the other bidders, not the actual amount bid.
The bid is for a one-time payment for the ten-year franchise granted to the tender winner. The two winning consortia will have to pay the amount of their bids to the state shortly after being declared the winners.
In the past, Second Broadcasting Authority chairman Menhashe Smira and director-general Mordechai (Motti) Sklar disputed the level of the bid. Sklar though that the bid should be given 40% weight in the tender, while Smira advocated 30%.
Each participant’s bid in the tender will remain highly confidential until the end of the tender. The bidder submitted their bids in two ways: in closed envelopes, to be kept in a Second Broadcasting Authority safe until examination of the bids is completed, and in a business plan communicated to the economic consultants chosen to advise the Second Broadcasting Authority in the tender.
Another significant part of the tender is the consortia’s investment in high-quality programming, which constitutes 20% of the tender. None of the proposals by the participants in this category has been disclosed, except for Canne TV, which reported that it had proposed a NIS 100 million annual investment for four days of broadcasting. This sum is 50% more than current investment in high-quality programming. It is believed that at least one of the consortia in the tender has proposed an investment of over NIS 100 million.
Published by Globes [online], Israel business news - www.globes.co.il - on March 22, 2005