Knesset Pulls the Plug on Channel 10

Unless the Knesset's Economic Affairs Committee relents or some arrangement is reached, the channel in its current format is to be closed down next year.

Channel 10's broadcasting franchise shall not be renewed, the Knesset's Economic Affairs Committee decided yesterday. Unless it relents or some arrangement is reached, the channel in its current format is to be closed down next year. Hundreds of Channel 10 workers wil be laid off, and a new broadcaster appointed through a tender process will take over.

The decision overturns the committee's agreement last month to give Channel 10 more time before final decisions on its franchise were made.

In November the Second Broadcast Authority decided to issue a new tender. But it gave the present Channel 10 owners until March 1 to try to refinance debt.

Gilad Erdan of Likud argued against waiting, saying there was no legal basis for any extension. Yesterday he won the day with a two to one vote to cancel the postponement. Erdan and Moshe Kahlon of the Likud party voted in favor, and Alex Miller of Yisrael Beitenu voting against amending the resolution.

Nurit Dabush, who chairs the Second Broadcast Authority, confirmed at the close of the session that a new tender would indeed be issued. The new franchise should be on the air from February 2010, leaving only a year conduct the tender and choose a winner.

Channel 10's representatives at the committee debate, CEO Joseph Varshavsky, deputy chairman Modi Friedman and legal counsel Nurit Kimchi - appeared shocked at the outcome and refused to comment. They also did not present their position during the course of the session.

Erdan said that Channel 10 would not be permitted to refinance the debt of NIS 103 million that it has been carrying for the past six months. "There is a limit to how far laws can be amended. When we all lost money in continuing-education [hishtalmut] funds over the past few months, no one gave us the money back. Channel 10 cannot be given a green light to avoid its responsibilities." Erdan reiterated that the channel has already received legal easements worth more than a billion shekels.

The Directors and Screenwriters Guild said that television and cinema employees welcome the committee's decision. "After years when it was clear to any franchise that there was no real regulation in the field, the Economic Affairs Committee stood up today and clarified in no uncertain terms that laws should be abided by."

The guild warned, though, against an attempt by Channel 10's controlling shareholders to attempt a merger with Channel 2 franchisee Reshet, sayin: "It is unconscionable for law-breakers of one channel to become owners of another."

The guild called on Channel 10 and Channel 2 franchisees to "pay their past debts immediately, shoulder their responsibilities, and to view the legislative body's decision as an opportunity for revitalization and creation of original, quality Israeli television in the future."

The decision means that Channel 10's shareholders, Yossi Maiman, Ron Lauder and Arnon Milchan, will be replaced as the channel's operators, beginning February 2010. Meanwhile, though, the regular broadcast schedules remain in place until they are replaced by the new franchisee. There have been rumors recently that Channel 10 would cease broadcasting immediately in the event that a new tender is issued. However, the Second Broadcast Authority is likely to seize the NIS 37 million security deposit and operate the channel in the interim.

There is also the possibility that a new tender will be avoided altogether. One option would be for the shareholders to repay their debts to content producers, and make good on another NIS 60 million in investment that they undertook - but failed - to spend on production of content. This would open the way for reassessment of the decision not to renew the franchise. Another possibility is that Channel 10 shareholders lobby after the elections for new legislation that would allow the extension of their franchise.