Reshet to cut staff by 50 after Channel 10 merger collapses

reshet
reshet

The cost-cutting measures include layoffs and not replacing workers who resigned voluntarily.

The crisis in the television market is still wiping out the jobs of employees in the industry. Sources inform "Globes" that following the cancelation of the merger with Channel 10, Reshet has begun streamlining measures that include dropping 50 employees from its work force. Some of the 50 will be fired, while at the same time replacements are not being hired for employees who voluntarily resigned. Reshet currently has 270 employees, not including freelancers.

The need for cost cutting is not new; among other things, it is a result of the crisis in the industry following the splitting of Channel 2 and the shift to a broadcasting schedule of three commercial television license holders. The split has resulted in a situation in which Keshet and Reshet have invested enormous sums in creating high-quality and expensive broadcasting schedules designed to shape viewing habits and achieve high ratings. The aggregate rating did rise in the early months, causing higher demand for television advertising, but this increase did not even come close to covering the expenses incurred in creating high-quality broadcasting schedules.

The competitor faring worst is Channel 10, which has seen its market share fall as the viewing pie grows. Both Keshet and Reshet are also losing hundreds of thousands of dollars, however, confronting them with a materially different situation than before the split in Channel 2. For example, sources close to Reshet, which went almost a decade without losses, and even posted some profits (except during Operation Protective Edge), say that the company has now accumulated NIS 110 million in debt.

In recent months, Reshet has been in intensive negotiation with Channel 10 for a merger, for which approval was obtained from Antitrust Authority director general Adv. Michal Halperin. The two parties accepted restrictions under their merger agreement, including not assuming new undertakings. In effect, the merger process preserved the situation as it was when the discussions began. It was obvious that the two channels would merge into one under the agreement, but as the process became longer, it was unclear stipulated how many and what type of people would be included, and how many people from Reshet and Channel 10, with its news company.

Channel 10 and its news channel usually assumed that they would pay the price in terms of personnel cuts. At a meeting of people from Channel 10 with members of the Second Broadcasting Authority Council, the Channel 10 representatives reported that 30% of its employees had already left. Last week, when Reshet and Channel 10 realized that the Second Broadcasting Authority Council would hold a hearing with no time limit, Reshet announced that it was backing out of the merger agreement, thereby opening the way to streamlining measures and making it possible to start new productions.

Reshet said in response, "When the merger was not approved, Reshet decided on a series of cost-cutting measures."

Published by Globes, Israel business news - en.globes.co.il - on October 21, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

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