Just 17 months after acquiring the Maariv daily, Nochi Dankner's Discount Investment is selling the newspaper after heavy losses. In the deal, as many as 80% of the paper's employees could lose their jobs.
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On Friday evening, Maariv announced that Dankner had come to an agreement with Shlomo Ben-Zvi, whose firm publishes the daily Makor Rishon, to buy most of Maariv's assets. Ben-Zvi and perhaps members of his family will pay as much as NIS 85 million. Discount Investment has put more than NIS 300 million into Maariv.
The assets to be sold include the Maariv print edition, the nrg website, local weeklies and magazines, the Maariv book publishing house, and interests of the newspaper group including intellectual property. Ben-Zvi is expected to merge the operations of Makor Rishon, which is regarded as right-leaning, with the daily.
The parties still have to work out full details
The full terms of the deal must still be hashed out in a formal contract. Ben-Zvi is expected to pay for Maariv over time, with the terms subject to the newspaper's business performance. He will not be assuming Maariv's debts.
According to Maariv, the assets being sold off do not include the paper's printing plant in Bat Yam or associated facilities, which the daily plans to sell off separately in the next few weeks.
The paper will continue to be published in the run-up to the sale. Before the deal was struck, there was talk of limiting print publication to Fridays and confining the rest of the week to a digital edition.
Dankner controls the paper through Discount Investment Corporation, part of his IDB group. Discount Investment's board had recently agreed to give the struggling daily backing for a NIS 15 million bank loan but said the paper would stop printing on weekdays.
The paper notes that Ben-Zvi has no intension to scrap the Maariv brand after he takes over. He is editor-in-chief of Makor Rishon and is deeply involved in the other publications he owns through his firm Hirsch Media, so he is expected to shape Maariv's editorial line.
There are also reports that major layoffs are in the offing at Maariv, which employs about 2,000 people. The newspaper has said that Ben-Zvi intends to offer positions at his firm to between 300 and 400 of them, putting the rest at risk. The parties are expected, subject to a binding contract and all relevant approvals, to carry out the sale by the beginning of October.
Maariv currently owes about NIS 55 million to bondholders, NIS 45 million to banks and NIS 60 million to Discount Investment. It also has about NIS 13 million in liabilities to its employees.
According to the plan taking shape, Dankner will retain Maariv's real estate assets, which Ben-Zvi apparently has no interest in acquiring. The sale by Discount Investment of the site hosting Maariv's Bat Yam printing plant is expected to generate more than NIS 100 million. On Wednesday, Maariv told the Tel Aviv Stock Exchange that it had put the asset up for sale at an initial price of NIS 72 million, with bids expected by September 27.
As a result, a relatively quick sale of the Bat Yam site is in the cards, providing funds for the payment of Maariv's debt. Since some of the debt is owed to Discount Investment itself, that company is expected to recoup some of its losses on the newspaper group.