Channel 10's existential crisis took a turn yesterday as the CEO of the Second Authority for Television and Radio proposed to nationalize the cash-strapped company for a year.
The company could shelter under the government's wing, proposes authority CEO Menashe Samira, until a reform scheduled for 2013 comes into force, through which the channel would move to an operating-license format.
With an operating license, Channel 10 could survive, surmise industry insiders - it certainly didn't keep its head above water in its present commercial-television format, in part because advertising income fell short of expectations.
Channel 10 owes the state alone NIS 60 million in overdue royalties and other payments. The Knesset Economic Affairs Committee refused more than once requests not only by the channel but by the Second Authority and the Communications Ministry to give the company a year's breathing space, thereby essentially signing its death warrant.
Israel has only two commercial television stations, Channel 2 and Channel 10, and the latter is considered to have a hard-hitting news company, which could be saved under Samira's plan, if he manages to push it through the Knesset.
Channel 2 and Channel 10 operate under concessions, which are limited in time. The reform would move them to a licensing format instead, which would give them a wider horizon. The question is how to keep Channel 10 alive until the operating format changes.
Samira proposes that the Second Authority take control of Channel 10 for the year, assuming responsibility for the network's day-to-day management until the license is forthcoming in 2013.
He even discussed the idea yesterday with Channel 10's shareholders, who may technically have to ask for a stay of proceedings against the company, and may have to formally request that the Second Authority be appointed trustee in charge of the network.
At year-end 2010, Channel 10 had all of NIS 30 million cash, and another NIS 45 million earmarked for specific costs, such as original productions. At least some of that could serve to run the company during a year under the Second Authority's wing. Also, the Second Authority has a not-small inventory of original productions that Channel 10 could air during that year.
Presumably, if the Second Authority takes over the network's management this year it will push through regulatory relief and relax the rules for the company - and for Channel 2 while it's about it.
Dissent in the ranks
However, the Second Authority's chairman, Ilan Avishar, thinks the idea of nationalizing Channel 10 is unworkable.
The authority represents the public's interest in Israel's two commercial broadcast channels. It is also the regulator of Channel 10 and Channel 2. As such, says Avishar, it constantly studies the alternatives that Channel 10 faces, and he doesn't feel nationalization is realistically one of them.
Nationalization for a year is one way of keeping Channel 10 alive but it isn't the primary one, Avishar said yesterday - if only because he thinks it technically impractical. There may not even be any legal mechanism to make it happen. In any case, Channel 10's shareholders - energy baron Yossi Maiman, who also owns Ampal; cosmetics heir Ron Lauder; and Hollywood producer Arnon Milchan - would have to cooperate and he doesn't think they will.
"The question is what we want to see on the screen. If the result is pitiful broadcasts that just cause embarrassment then there's no point," Avishar said. "We have to check whether we can offer a distinguished broadcast range, and run the news corporation. We don't want to make idiots of ourselves."
There is one more option that the Second Authority is touting - that Channel 10 be allowed to continue to operate without paying its fees this year. But under that scenario there is no way it would get its license in 2013. The channel doesn't like that option, said a top personality there yesterday. "No shareholder or investor would be prepared to lose money for another year without there being a commercial horizon in the form of a license," he said.
Certain Knesset members who want Channel 10 to survive have been promoting another idea entirely. Eitan Cabel (Labor) and Nachman Shai (Kadima) suggest the network's debt to the state be converted into investment in original productions in Israel. The Ministerial Committee for Legislation will discuss their bill to this effect on Sunday.
