Last update - 00:00 07/09/2006
Rupert Murdoch's News Corp. to buy 9 percent of Channel 10
By Ronny Koren-Dinar
The News Corporation, an international media giant controlled by Rupert Murdoch, is purchasing 9 percent of Israeli television station Channel 10.
The timing is critical for the commercial channel, which is expected to lose $30 million by the end of the year; its business plan to break even by the end of 2008 is also in serious doubt.
The entire Israeli television industry is going through a difficult period, and the franchisees of another commercial broadcast channel, Channel 2, are also losing money.
In spite of its losses, Channel 10's ratings are on the rise and are 20 percent higher than last year. They especially grew during the period of the Lebanon war.
In recent days, Channel 10's news programming has beaten even Channel 2's news reports, and hit a new record with a 22 percent rating for its broadcast of a film showing missing Israel Air Force navigator Ron Arad, who disappeared after his plane went down over Lebanon in 1986.
Current owners of the channel include media mogul Arnon Milchan, who invested in the channel a year and a half ago, and owns 24.5 percent of the station, and Jewish American businessman Ronald Lauder, who invested two years ago.
The largest shareholder is Joseph Maiman, who holds 51 percent, and who has been with Channel 10 since it was founded in 2003.
The ownership structure following Murdoch's purchase is still unclear, but it is known that the News Corp. share will come at the expense of Lauder's and Milchan's holdings.
It is thought that the deal valued Channel 10 at around $15-20 million.
News Corp. Europe, a subsidiary of News Corp., will be the actual buyer. News Corp. Europe manages and develops the parent firm's European investments, and has holdings in television stations in Bulgaria, Poland, and Serbia. It has also decided recently to invest in Turkey and Georgia s well as Israel.
News Corp. is already an indirect partner in Channel 10, as it owns 40 percent of New Regency, Milchan's company that invested in Channel 10.
Marty Pompadur, the chairman of News Corp. Europe, will join Channel 10's board. He is optimistic about Channel 10's future, and intends to use News Corp.'s experience to turn the broadcaster into Israel's leading television channel.
Murdoch said that he views the Israeli acquisition as another step in expanding News Corp.'s business throughout Europe and the entire region.