Everything You Need to Know About the Israel Hayom (Or anti-Sheldon Adelson) Law

A bill that would stymie the U.S. casino magnate's free Israeli newspaper has passed an early hurdle in the Knesset. So is that good or bad for the country?

Amos Biderman

What is the Israel Hayom law that the Knesset passed in a preliminary vote on Wednesday?

The “law for the advancement and protection of written journalism in Israel” is more widely known as the “Israel Hayom law” and would more accurately be called “the law to limit Sheldon Adelson’s influence.” The law, proposed by MK Eitan Cabel (Knesset) and sponsored by members of five other Knesset parties, would make it illegal to widely distribute a full-size newspaper free of charge.

The law’s stated intention is to “defend written journalism” in a period of financial hardship for newspapers in Israel. It doesn’t mention any paper by name, but only Israel Hayom fits its requirements.

If it passes into legislation — Wednesday’s 43-23 vote in favor was just the preliminary stage — Israel Hayom will be forced to charge its readers at least half the price of its cheapest competitor. Now it goes into the thickets of committee debate, and intense lobbying will continue until it is voted on again — if it survives that far — and becomes law.

Why are the law’s supporters going after Israel Hayom?

Eyal Warshavsky / BauBau

Aside from the official reason of creating fair competition in the Israeli newspaper industry, there are political and commercial considerations at work. Israel Hayom has had one agenda since it first appeared in 2007 — Benjamin Netanyahu. It supported his candidacy for prime minister, and since his reelection in 2009, it has been slavishly pushing his policies and defending him and his family from criticism.

The law is being sponsored by members of rival parties to Netanyahu’s Likud, from the right and left, both coalition and opposition members. Even Netanyahu’s senior ministers have attacked the paper; Foreign Minister Avigdor Lieberman called it “Pravda” and Economics Minister Naftali Bennett described it as “a mouthpiece of one man.” In its support for Netanyahu, Israel Hayom has created enemies across the political spectrum who are eager to clip its wings.

The freesheet swiftly became the newspaper with the highest public exposure in Israel, upsetting the monopoly of the top-selling tabloid Yedioth Ahronoth. Israel Hayom has accused Yedioth’s publisher, Arnon “Noni” Mozes, of orchestrating the law through MKs who receive preferential treatment from Mozes’ paper and its popular website Ynet, in the interest of reestablishing his predominance in Israeli media. For months now, the paper has been running a campaign portraying Mozes as a puppeteer pulling the strings of the politicians in “Noni’s evil empire.”

Mozes, who never gives interviews, has not responded to these accusations. The MKs sponsoring the law have denied they are doing Mozes’ bidding.

Why does Adelson need a newspaper?

Adelson, who made his first fortune from computer-industry conventions and then reaped billions from his mega-casino and hotel complexes in the United States and Far East, has no major business holdings in Israel and never invested in the media in the past. At a conference just this Sunday he even said “I don’t like journalism.” He does, however, have a keen interest in politics in his native United States and in Israel (of which he isn’t a citizen, though his second wife Miri is).

In the United States he has plowed an estimated $150 million through super PACs to fund presidential and congressional campaigns of Republicans he favors, but political funding laws in Israel allow individuals and corporations to contribute only relatively small sums.

Adelson, who holds far-right political views and has known and supported Netanyahu for over two decades, founded Israel Hayom as his own personal loophole to do in Israel what he has been doing in the United States. The paper’s financial statements remain a closely guarded secret, but Israeli media experts believe he has spent at least $50 million to date.

In interviews, Adelson has denied that Israel Hayom is a “Bibiton” — a moniker combining Netanyahu’s nickname and the Hebrew word for newspaper. He says the paper was created to balance the “far-left” agenda of Yedioth and other Israeli media.

Adelson’s MO and his paper’s coverage of Netanyahu suggest otherwise. Israel Hayom was founded on the (not totally unfounded) belief that the Israeli media are out to get Netanyahu and the only way he can govern is by having his own media.

Would the new law harm Israel Hayom?

The freesheet has been running a campaign accusing the law and its supporters of trying to shut it down. This is disingenuous. By forcing them to charge readers even a small price, readership will go down, but whatever that may do the paper’s revenues it is immaterial as the paper is operating at a loss anyway that Adelson has no problem covering using his private fortune. Israel Hayom can continue to operate despite the law as long as Adelson continues to bankroll it.

Their real issue is that the law would drastically limit the paper’s exposure. Israel Hayom rarely publishes scoops, seldom receives high-profile exclusive interviews and has very few must-read columnists by any standard. Its one attraction is that it’s free of charge.

But its publishers are no fools; they’re fully aware that if it were a paid product, it would be likely to be bought by very few Israelis — as it is, print journalism is on the decline. Denying it this advantage would deny Adelson the influence and support he hoped to buy for Netanyahu in funding the paper.

What’s wrong with the law?

There are two major problems with Israel Hayom law. First, no law should be targeted at a single individual or company. The crude way the proposal has been tailored for this one freesheet highlights the political and commercial motivations behind it.

Second, any law that seeks to impose limits on a media organization carries inherent dangers. Legislation against one newspaper, as problematic as it is per se, creates a perilous precedent for Israeli democracy.

There are counterarguments in favor, of course. For a start, Israel Hayom as a loss-making, mass-distributed, one-politician-supporting freesheet is not a real newspaper in many senses. Its supporters claim that it operates on the business model of freesheets around the world, but this is patently untrue. Those free papers, with their tiny editorial budgets, are meant solely as vehicles for advertisement — and to while away a few minutes on the daily commute.

Adelson’s billions, on the other hand, have financed a full staff of journalists (in itself a good thing) whose sole aim is to create a pro-Netanyahu publication that resembles an attractive and professional newspaper. While this may or may not have been an intended result, it is jeopardizing the existence of rivals that lack the capacity to sustain large losses. Still, targeted legislation should not be the solution.

Are there other ways in which Israel Hayom should be challenged?

Adelson’s newspaper is thinly disguised mega-campaign funding. The regulators of political finance, especially the state comptroller, should have stepped in long ago to close this loophole. Flooding the market with a free product and undercutting competitors by offering cut-price advertising space is ruining competition in what is already an increasingly fragile print-media market.

The Antitrust Authority should be looking into that. For whatever reasons (and which state agency would rush to investigate a company owned by the prime minister’s chief patron?) the relevant authorities seem to have made no attempt to enquire whether Israel Hayom is breaking any laws, let alone try to regulate them.

In the absence of any regulation or enforcement necessary to create a more level playing-field both in politics and the media, this anti-Adelson law was born. It’s a bad law, but more than that, it’s a symptom of the weakness of Israeli democracy.