'The Partnership Began as a Dream for a New Middle East'

Kul al-Arab newspaper is parting ways with Yedioth and going on its own.

After years of disputes, some of which ended in legal proceedings, a decade-long partnership ended two weeks ago between the Yedioth Communications group and Legal Tender Initiative, and Mussa Hassadiya and Fayez al-Shtiwi, who jointly owned the Arabic-language weekly newspaper Kul al-Arab.

A compromise agreement reached in April 2007 only resulted in more contention between the parties, which was finally resolved when Hassadiya and Shtiwi and a group of Israeli-Arab businessmen assumed complete ownership of the paper.

Sources close to the deal estimate that Yedioth and Legal Tender, which each had a 25% stake in the paper, received about NIS 3.5 million from Hassadiya and Shtiwi. Hassadiya will continue to own 40% of the shares, as he had until now. Shtiwi, who owned 10%, has increased his holding, and the remainder will be held by the new group, which is currently finalizing the terms of the deal.

Hassadiya and Shtiwi relate that the deal was signed at a value of about NIS 8 million for the publishing company, which owns Kul al-Arab, the Lady Kul al-Arab women's magazine and the al-Arab Web site.

Kul al-Arab is an independent weekly paper founded in Nazareth in 1987 by the al-Bustenai advertising agency, which was owned by Arieli Advertising and managed at the time by Hassadiya. The paper, which employs 70 workers, has a distribution of 38,000, in Israeli-Arab and West Bank towns. Each issue has an average of 120 pages and is sold for NIS 4. The honorary editor is Samikh el-Kassem. For a while the paper was printed by Globes, then by Haaretz, and in the past year and a half has been printed by Maariv.

"I am pleased that the other partners have left the paper," says Shtiwi, from his office in Nazareth. "The partnership began as part of a dream for a new Middle East, with an eye to the potential in the Arabic media market, but in recent years there were many disagreements. Yedioth Ahronoth only wanted us to do the work, to make them leave the partnership. After the signing [of the dissolution agreement] for the first time since I became general manager of the paper in 1997 and a shareholding partner in 2004, I felt truly free. I am free of the people whose partnership I did not want, because, essentially, they were never real strategic partners. There was no point in their staying."

Even so, Shtiwi still feels that it is "proper thinking" for a communications group to be open to the Arab world. "It is proper for an Israeli paper to cooperate with the Arab media in the current era," he says.

Shtiwi, who is married and has three children, lives in the Galilee village of Iksal. He began his newspaper career as distribution manager, and became general manager in 1979.

"The paper was on the brink of collapse when I took over," he recalls. "I slashed expenses, fired people, instituted a new administrative concept and made the paper profitable. But Yedioth just wanted more money from us all the time, and was not at all interested in the paper itself. They never paid any attention to us."

Shtiwi says the disputes between the partners reached a climax during the Second Lebanon War, partly due to falling advertising revenues and the paper's reduced profitability at that time, but mostly due to Yedioth and Legal Tender's objections to the launching of the paper's Web site.

"I realized at that point that keeping those partners with us would mean irreparable damage to the paper," says Shtiwi. "All that is behind us now, and we are upgrading and having a big party. Then we will make changes to the content. There will be more economics articles and up-to-date sections. The most important thing is that we have entered a new era and the paper and the Web site belong to us."

No comment was available from Yedioth.

In November 2006, Yedioth Ahronoth and Legal Tender filed a suit against Hassadiya and Shtiwi and Kul al-Arab for depriving them of involvement in the running of the paper.

Hassadiya and Shtiwi filed their defense via attorneys Ron Berkman and Nachum Kubovsky, arguing that Yedioth and Legal Tender were trying to take over the company and its assets or to assist the company's competitors against it.

The grounds for this line of defense were the plaintiffs' demand for the disbursement of a dividend and their refusal to allow the establishment of a Web site. The defendants also contended that the plaintiffs' behavior was a breach of the company's trust and that they were acting in conflict of interest and in bad faith.

In April 2007 the sides reached a compromise agreement, under which the company's shareholders were to receive an annual dividend equal to a minimum of 50% of the newspaper's net profits, and the Web site and the women's magazine would be under the paper's auspices.

A new employment contract was signed with Shtiwi and Yedioth appointed a bookkeeper who would be subordinate to him. All legal proceedings were terminated and mutual claims dropped.

"We are men of principle who put journalism first, and all they wanted was the profits," continues Shtiwi. "Now the paper will gain momentum and I believe we will double distribution. The Web site is developing and the value of the paper and the Web site will soon reach NIS 20 million."

When asked about the new newspaper law that is due to be passed soon, granting District Court judges the authority to close a paper suspected of harming national security, Shtiwi says it frightens him.

"If a newsp aper can be closed so easily, we will be the first to suffer, because we are always under scrutiny. We never harmed national security and have no intentions of doing so in the future. The paper is reviewed by the censor every week and there have never been any complaints against us.

"We do, however, have a clear editorial line. We oppose terrorist attacks, but also oppose the occupation, the discrimination and the denial of human rights. We want social justice and want to see proud Arabs here, with equal rights, not the defeated Arab."

Shtiwi talks about his vision of "two states for two peoples, the return of the Golan Heights, a Palestinian state with 1967 borders and a just peace."

"Even Yvette Lieberman wanted to be interviewed by us, because we are open to everyone and will never silence anyone," says Shtiwi.

"When someone asks me why I invested my money in a newspaper, I say that a follow my beliefs and my principles. I believe the written media will remain the authoritative source for writing and knowledge, and even if it takes a few years to recoup the investment, and even if I'm a bit skeptical about this, it is obviously impossible to leave the Arab sector without Kul al-Arab. I will continue to fight in this arena, and I know I will win."