“I told Netanyahu, ‘Because Channel 10 is available [to buy], do you think it’s a good idea?’ I respect his opinion, he’s a very good businessman. He told me: ‘It’s a terrible business with terrible people … but it’s not a bad idea. Israel needs different people in the media world. … Good if you can buy it.”
The speaker is Len Blavatnik, the Ukraine-born Jewish billionaire who made his fortune taking over companies that were privatized when the Soviet Union collapsed and is today considered one of the richest people in Britain.
In Israel, Blavatnik is the owner of Clal Industries and a co-owner of Channel 13 (Reshet). He now wants to drastically cut the budget of that channel’s news company, formerly Channel 10 News – which for years has been considered Prime Minister Benjamin Netanyahu’s nemesis because of its investigative reports about him and the critical line it has taken. The threat of cutbacks has led to a battle between the station’s management and the news company’s employees, who want to preserve its character.
In 2015, Blavatnik himself was in a fight with high-tech entrepreneur Ilan Shiloah to acquire Channel 10. The channel had three shareholders: Yossi Maiman, Ronald Lauder and Arnon Milchan (who, according to the indictment in one of the corruption cases against Netanyahu, supplied the prime minister and his wife Sara with a steady supply of expensive cigars, champagne and jewelry).
In the end, Blavatnik assumed control of the station through the media group RGE, of which he is a partner. Channel 10 later merged with the former Channel 2 franchisee Reshet, and it’s estimated that Blavatnik has so far invested over 200 million shekels ($57.5 million) in the venture.
When Netanyahu was being investigated by the police over suspicions that he received gifts and other benefits from wealthy patrons, members of the national fraud squad tried to ascertain how involved the prime minister was in the Channel 10 deal. He was also serving as communications minister at the time. The previous owners, including Milchan, made millions from the sale.
Toward the end of August 2017, the head of the investigations team, Chief Superintendent Momi Meshulam, landed in London to take Blavatnik’s testimony in the probe.
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The tycoon stated that he had known Netanyahu for years and had met with him during his visits to Israel. “He always complained about the media,” Blavatnik told investigators. “About the leftists – that they’re not good for the country, are anti-Israel and anti-business … and that Channel 10 specifically is anti-Israel and anti-business. … He complained all the time about Yedioth Ahronoth, and there was one time – maybe after I bought Channel 10 – that he said: ‘Yedioth Ahronoth could be available.’ I said ‘Really?’ Or ‘That’s interesting … how much?’ He said 500 million. I told him ‘Are you crazy?’ It just didn’t make sense. I thought what’s his name – Yoni?--”
Investigator: “Noni Mozes,” referring to Yedioth publisher Arnon Mozes.
Blavatnik: “--was playing with him.”
The tycoon told investigators that from the moment he bought Channel 10, his meetings with Netanyahu became “a little more frequent. … He complained all the time,” Blavatnik was quoted as saying. “He always said [the media] were unfair to him. I remember once he told me: ‘I’m the one playing it fair, but when they persecute my family, my son, it’s really not fair.’ He was, like, really angry.”
Investigator: “Did he ask you to do something?”
Blavatnik: “He was more complaining. … He said, you know, ‘Do something.’ I said, ‘What can I do? You can talk to them directly.’”
One day, Netanyahu called Blavatnik with a specific complaint about a series of stories by Matan Hodorov on Israel’s natural gas arrangements and harshly criticized the monopoly Netanyahu had created on behalf of businessman Yitzhak Tshuva and Noble Energy. “He told me, ‘They don’t know what they’re talking about,’” said Blavatnik, recounting the conversation. “Then I told him, ‘I really don’t know, I don’t understand Hebrew.’ But I asked him – and that was the only time – to send me the problematic [news segments] with subtitles in English. And he was right. That’s really my opinion. I know something about business and about oil and gas. [The story] was completely unfair and unprofessional, and presented in an inappropriate manner. In fact, it reminded me of some of the Russian programs.” The prime minister, he concluded, “was right” to complain.
Netanyahu tried to push Blavatnik to fulfill an old dream of his and establish an Israeli version of Fox News. “He talked a little … that the country needs a channel like Fox, which is more to the center and the right. ‘You can make a lot of money if you do it, because those with right-wing views will be more interested so more people will watch it,’” Netanyahu told Blavatnik. He responded to the premier: “Maybe it’s a good idea, but it looks like a small market and I personally am not a professional in this field. ... If there’s a group that’s doing it, I’ll consider it.”
The investigators wanted to understand why Blavatnik agreed to pay millions of shekels to the outgoing shareholders, including Milchan, as opposed to the offer made by his rival: “Ilan Shiloah didn’t agree to pay the shareholders anything for their shares except for the debt. Why did you agree to pay 10 million shekels?” the tycoon was asked.
Blavatnik: “I don’t know. It’s a reasonable assumption that it’s what was necessary for them to agree. … Look, $3 million, you know, it’s not that much. ... With all due respect, every dollar is important, but I mean that I have other businesses, bigger ones … I waste them on my damned lawyers, anyway.”
The billionaire exhibited a great deal of sympathy and esteem for Netanyahu in his testimony. When asked if he ever gave the prime minister gifts, Blavatnik – who owns the Warner Music Group – said the premier had refused to accept discs from him. Responding to another question from investigators, he said he had never bought Netanyahu cigars. However, when Netanyahu was asked whether Blavatnik had given him gifts, he said: “It could be that he brought a few cigars.”
At times, the testimony suggested Blavatnik protected Netanyahu more than the prime minister safeguarded himself. The tycoon insisted, for example, that he was the one who initiated the conversation about whether Channel 10 was worth buying.
“It was more my initiative because I respect his opinion. … If it was in England and had a relationship with the prime minister, I would ask him a few things. … Business is important to the state.”
Netanyahu provided a different version of events. At first, he found it difficult to remember if he ever became involved in the deal, but later explained: “Channel 10 was sold [to Blavatnik] because the man – what’s his name? Ilan Shiloah – he is an ultra-leftist who came to buy the channel. ... I see the danger, so Channel 10, however bad it may be … will be even worse. … Then I turned to Blavatnik. He made a bid and won. … I told him, ‘Change the channel, because it’s an awful channel.’”
He added: “[Shiloah] is an enemy of everything I believe in. … I told Len, ‘This is a national mission, even though you are going to make money.’”
Investigator: “In other words, the approach to Blavatnik was an effort to thwart Shiloah?”
Investigator: “And help Milchan too.”
Netanyahu: “No, I didn’t think about Milchan at all. Not when I wanted to close Channel 10, and not during the sale.”
Ultimately, the Channel 10 deal was not included in the indictment against Netanyahu as part of the alleged quid pro quo Netanyahu gave to Milchan in exchange for gifts and other favors.
The investigators asked Netanyahu why the purchaser of Channel 10 would have to pay the state the extravagant sum of 16 million shekels for the station’s franchise to be extended. He confirmed that this condition was meant to deter the hostile buyer. “When I saw Shiloah moving there, I acted,” he stated. “As far as I was concerned, the station could close.” When Blavatnik and his partners eventually bought Channel 10, the amount plummeted to 5.3 million shekels.
Netanyahu’s former chief of staff Ari Harow was involved in the contacts between Blavatnik and the prime minister. Harow, a former Netanyahu confidant, was also involved in the secret talks between Netanyahu and Mozes – indeed, he recorded those private conversations at Netanyahu’s behest.
“Bibi called me to a meeting with Blavatnik and wanted me to be involved,” Harow told investigators. Harow said the two sent him to meet with a partner in the purchase of the channel, Aviv Giladi, and to get a feel for how the prime minister would be covered in the future. Netanyahu confirmed this during his interrogation and explained: “I wanted to know that this disaster known as Channel 10 would not repeat itself.”
Harow testified that Netanyahu and Blavatnik also spoke to him about the role the channel would play in the future. Harow later turned state’s evidence and is expected to testify against Netanyahu in the ongoing corruption trial in Jerusalem.
In the meantime, it’s not clear how happy Netanyahu will be now Channel 10 is in Blavatnik’s hands. But he certainly won’t be upset if cutbacks break the back of the media outlet that has infuriated him so much over the years.
Blavatnik also owns the Nesher cement monopoly, whose profitability has been damaged in recent times due to cheap cement being imported from Greece and Turkey. As TheMarker recently reported, Blavatnik hopes to receive a benefit worth hundreds of millions of shekels a year from the government – in the form of an increased import levy on cement imports, thus increasing prices. The committee examining the matter has for now rejected the recommendation of the trade levies commissioner in the Economy and Industry Ministry to raise this tariff by 30 percent. This hot potato is currently awaiting a decision by Economy and Industry Minister Amir Peretz.