Sheldon Adelson Discovers the Limits of His Power - in Israel

A new law targeting the mogul's free newspaper may succeed where the entire U.S. Democratic Party machine has failed in curbing Adelson's power to use his money to influence politics.

Bloomberg

Casino mogul, GOP mega-donor and one of the richest men on earth, Sheldon Adelson, may just have met his match. On Friday, his Israeli free-sheet Israel Hayom carried a lengthy interview with him, written by editor-in-chief Amos Regev and foreign editor Boaz Bismuth. Adelson's main intention in the interview was to inveigh against Arnon "Noni" Mozes, the publisher of Yedioth Ahronoth, Israel's most influential tabloid daily and, until the advent of Israel Hayom seven years ago, the country's most-widely distributed newspaper. The interview was timed to coincide with the start of the Knesset's summer session where one of the more controversial laws on the agenda is the one proposed by Labor's MK Eitan Cabel that will force newspapers distributed nationally to charge a minimum price.

Unusual for a law dealing with a seemingly obscure pricing issue, Cabel's proposal is co-sponsored by MKs from six different parties, three of them from Prime Minister Benjamin Netanyahu's coalition (two co-sponsors are MKs of the Likud's ally in the last elections, Yisrael Beiteinu). But there is nothing surprising about that. While the new law doesn't specify Adelson or his publication by name, its intent is clear - to rob Israel Hayom of its single advantage, the fact that it is handed out throughout the country in hundreds of thousands of copies, free of charge.

Adelson accused rival Mozes, who he claims is the puppeteer manipulating the MKs, of having "the chutzpah to submit a bill for the sake of eliminating competition." But he doesn't ask himself the question, and, unsurprisingly, neither do his two interviewers, why is he so certain that Israeli consumers would prefer not to buy Israel Hayom (which under the new law would still be allowed to price itself lower than any of its competitors) if it could no longer be given away for nothing, despite what he describes as "the thirst of the public for an honest and independent newspaper." Instead, prompted by Regev and Bismuth, Adelson claims that Israel Hayom is no different than other free-sheets distributed in many places around the world.

But no other free-paper works on similar lines. They are all city papers, with small, usually skeleton staff, distributed along the routes of public transport systems of a single urban area. Low on unique content and heavy on advertising, their business model is simple. Israel Hayom, however, is handed out across the country and though it rarely if ever publishes scoops or high-quality journalism, has a full roster of correspondents, commentators and highly-paid star columnists. The meager advertising income cannot even begin to pay their payroll, or the hugely expensive distribution operation. But of course it doesn't have to as Adelson carries the tab; according to Israeli media experts to the tune of around 50 million shekels annually.

If the new law passes and the only readers of Israel Hayom are Israelis who actually pay for it, the paper won't be eliminated as Adelson claims. He will still have the choice to continue devoting a tiny fraction of his fortune to bankrolling its operation. But it will have lost its value to him as a propaganda tool.

In the United States Adelson has plowed in recent years over a $100 million into the campaigns of Republican candidates. But Israeli law imposes a cap on political donations and many claim that Israel Hayom has simply been Adelson's convenient loophole to support Benjamin Netanyahu. Of course in the interview, he denies the free-sheet's characterization as "the Bibiton" (iton in Hebrew means newspaper) and claims that "nobody has ever said that Israel Hayom's reporting on the prime minister is untruthful. Everything that has been reported by this paper is truthful." There is, however, no question that throughout its existence, the paper has slavishly supported Netanyahu's policies, provided glowing coverage to his every statement and to his wife Sara, while savagely criticizing their political and personal rivals.

There is no proof that the new law is indeed being orchestrated by Mozes but it would hardly be surprising if that were the case. Yedioth Ahronoth which has been extremely critical of Netanyahu over the years has its own "favorite" politicians from various parties of the right and left. Some of the law's co-sponsors have recently received favorable coverage in the paper.

Israel Hayom unquestionably jeopardizes Yedioth's supremacy in the print-advertising market. But Adelson's claim that he decided to launch his free-sheet to counter the "far-left" agenda of Yedioth is disingenuous. Yedioth's politics, to the extent it has any, is a blend of self-serving commercialism and centrism, combining staunch support for the IDF and security services with low-brow sentimental patriotism. Previous Yedioth editors have encouraged their staff to emulate Britain's successful mid-market, conservative and xenophobic Daily Mail.

Much of the criticism of Israel Hayom has come not from the left but from Netanyahu's right-wing coalition partners. Foreign Minister Avigdor Lieberman calls it "Pravda" and ignores its correspondents at briefings. Economics Minister Naftali Bennett describe it as "a mouthpiece of one man." MKs from both their parties are co-sponsors of the new law.

Adelson may be right in claiming that all these politicians are working on behalf of Mozes, perpetuating his dominance of Israeli media. But the fact remains that legislators from the right, left and center all see his paper as a political threat.

Israel Hayom has gone into crisis mode, devoting entire spreads daily to the campaign against the law. On Monday it printed the phone numbers of seven co-sponsors, calling upon its loyal readers to swamp their offices with protest calls. Noni Mozes may be one of the richest and most powerful men in Israel, but set beside Adelson, whose fortune is assessed by Forbes at $36 billion , he's a veritable minnow. Whether the law is indeed the brainchild of the shadowy local tycoon, the wily political operator Cabel or both, these Israelis may succeed where the entire U.S. Democratic Party machine has failed in curbing Adelson's power to use his money to influence politics.

Sheldon Adelson listens at a convention of  the Republican Jewish Coalition in March 2014,  in Las Vegas.
AP