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Adelson's pro-Netanyahu Free Daily Newspaper Lost $190 Million in Seven Years

Data obtained by Haaretz calls into question the paper’s business model: Israel Hayom loses a shekel for every printed copy it gives away.

Sheldon Adelson and Benjamin Netanyahu.
Sheldon Adelson and Benjamin Netanyahu. אילן אסייג

Internal records from Israel Hayom revealed here for the first time show that its cumulative losses between the founding of the freebie and 2014 were 730 million shekels ($190 million). This reflects a loss of approximately one shekel per copy the paper printed during these years.

The data also sheds new light on the economic significance of operating the well-known daily in providing favorable coverage of Prime Minister Benjamin Netanyahu, and reveals the enormous amounts of money the newspaper lost in its first seven years in order to continue.

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The relationship between the newspaper’s owner, American billionaire and casino mogul Sheldon Adelson, and the prime minister was again in the headlines this week due to the police investigation into the possibility that Netanyahu would have moved to restrict publication of Israel Hayom in exchange for receiving favorable coverage from rival daily Yedioth Ahronoth.

Haaretz revealed 18 months ago that Netanyahu received a message from Adelson in July 2014 to ease regulation in the gas market. Adelson made the appeal as head of an organization in which Noble Energy, a major partner in the Tamar and Leviathan gas fields, is a member. Netanyahu responded then that he does not advance Adelson’s interests.

Israel Hayom was founded in mid-2007. Its editors have consistently contended that it operates according to a business model. “There is a business model – and it is a winner,” wrote the paper’s economics commentator Hezi Sternlicht in a 2014 opinion piece attacking attempts to restrict its distribution through the so-called Israel Hayom bill. “Israel Hayom was built and operates according to an economic model, whose principle is free distribution and continually growing ad revenue.”

Israel Hayom started off being published five days a week. It added a Friday edition in 2009. According to the paper’s own reports, its circulation has varied over the years, ranging between 250,000 on weekdays and 400,000 on weekends. Based on Israel Hayom’s declarations of the number of copies it prints, the paper has printed over 600 million copies of the freebie. Thus, the paper has lost about a shekel a copy. Israel Hayom data may indicate that revenue has risen from year to year, but it has continued to amass losses, which grew from 330 million shekels in 2010 to 560 million in 2013.

Since its inception, the newspaper has been known mainly as an unreserved supporter of Netanyahu. An expose on television’s Channel 10 from 2013 asserted that the paper’s editor-in-chief, Amos Regev, intervenes in the content of newspaper correspondents and slants the coverage to be more favorable toward Netanyahu and his policies. The report showed several examples of texts that reporters had sent to the paper including criticism of Netanyahu and his policies, and how they were changed. Because of this support, the charge arose that the paper’s publications should be considered illicit election funding that apparently violates the party funding law.

Three months ago, State Comptroller Joseph Shapira wrote in his report on party funding and the elections that he lacked the tools to examine the matter. “Concluding that one of the newspapers published in Israel is advancing a specific party requires a system-wide examination of all the influential newspapers for the various communities, and requires investigative and research tools, some of which are not among the tools at the disposal of the state comptroller and the authorities that the law invests in him,” Shapira wrote.

The question of Israel Hayom’s business model has been a matter of debate since its launching, even more so in recent years since becoming the country’s most widely distributed paper in 2011. The paper announced in 2012 that it offered readers “a Zionist, Israeli and patriotic alternative, in contrast to the line characterizing other media outlets, and therefore has succeeded, and will succeed.” The paper added: “Israel Hayom adopted a different business model than the traditional one in print journalism, in light of the growth of media platforms and in particular of new media, which offer readers free content.”

An investigative report published on the Seventh Eye website in 2014 indicated that advertising prices at the paper were significantly lower than those of its competitors and concluded that it did not see that the paper had what was described as a “standard business model.”

A report came out in 2016 that a former Israel Hayom employee had filed a Labor Court lawsuit, and during the trial Israel Hayom demanded that documents noting old sales data providing information about company sales be kept confidential.

Also last year, United States-based Freedom House, which tracks civil liberties, downgraded Israel’s press freedom status to “partially free.” It explained the status change as follows: “Israel declined from Free to Partly Free due to the growing impact of Israel Hayom, whose owner-subsidized business model endangered the stability of other media outlets, and the unchecked expansion of paid content – some of it government funded – whose nature was not clearly identified to the public.”