Israel to Loan Public Broadcaster $18.8m for Eurovision Production Costs

Total cost of producing the international song contest is 110m shekels, says Kan corporation; CEO worried about being able to repay the funds

Israeli singer Netta Barzilai celebrating her victory in the 2018 Eurovision Song Contest during a performance in Rabin Square in Tel Aviv, May 14, 2018.
Moti Milrod

Israel’s Public Broadcasting Corporation announced Tuesday that it would take a loan offered by the state to help underwrite the production of the Eurovision Song Contest next May in Tel Aviv. So far, the treasury has agreed to a loan of 70 million shekels ($18.8 million), although the broadcaster, known as Kan, has said the total budget will be 110 million shekels.

“The board of the corporation believes that allocation of 110 million shekels from its own budget to finance just three evenings of broadcasts poses great difficulties, possibly harming local productions, creative artists and employees” working on original productions, according to a statement from the broadcaster.

“Having said that, the board members believe that holding the contest in Israel is of great importance to the image and economy of the country – and therefore agreed to undertake an examination of the terms of the loan with the intention of holding the competition, as long as they don’t impinge on fulfilling the corporation’s mandate, as stipulated by law.”

The board decision came after a 7-2 vote, and was opposed by Kan CEO Eldad Koblenz, who worries that the loan will embroil the corporation in a debt that it will have trouble repaying.

In the coming days, the broadcaster and Finance Ministry officials are due to discuss the amount of the loan and the terms of repayment over the next few years.

For his part, Prime Minister Benjamin Netanyahu has told treasury officials that he would not allow the 2019 Eurovision to be funded from state coffers, as opposed to the situation in other countries that host the contest after they have won it. Netanyahu stated that he expects Kan to produce the event from its own operating budget, which exceeds 700 million shekels.

This is not the first time there has been friction between Netanyahu and ministry officials, and Kan's executives over the production of Eurovision. A few months ago, there was an argument over a guarantee of 12 million euros, which the corporation had to deposit in order to ensure that the event would be held in Israel. Whereas the corporation demanded then that the state underwrite the deposit, Netanyahu declared that Kan should take a bank loan for that purpose and that it would get its money back after the contest.

At the time both sides were concerned that the local production of the competition was at risk, and ultimately Kan took a loan and started working on it.

At present the producers are continuing their preparations. By the end of the month, they are due to announce the names of the presenters of the contest, which will take place from May 14-18. Among the well-known Israeli personalities being considered as hosts are Erez Tal, Assi Azar, Bar Refaeli, Geula Even, Ania Bukstein, Yaron Brobinsky and Lucy Ayoub.

The singer who will represent Israel next year will be chosen in the course of a reality TV show called "The Next Star to Eurovision," due to be broadcast beginning next month on the Keshet 12 channel. In contrast to the last 20 years – that is, since Israel last won Eurovision – the chosen contestant will go directly to the finals in the 2019 contest, due to Netta Barzilai’s win in Lisbon last year.