The newspaper Maariv is seemingly on the brink of closure again: Workers' representatives and management are expected to hold another dramatic meeting today about the newspaper's future. Management is expected to present the union representatives with a drastic layoff plan, which it considers the only alternative to shuttering the paper. Due to the risk that the paper may go under, union representatives are not expected to bring their own demands to the meeting.
Maariv declined to respond.
Maariv CEO Israel Goldstein gave voice to these concerns for the newspaper's future on Thursday in an email to employees. "The company has come to a critical junction," he wrote. "The newspaper's continuing operation depends on several factors."
Management's main current concern is that it won't be able to pay June salaries on time this week, due to a severe lack of cash, said sources close to the paper. If salaries and suppliers go unpaid, the newspaper may de facto shut down.
Also Thursday, family members of publisher Shlomo Ben-Zvi announced that they intend to withhold further cash transfers to the ailing newspaper in its current form.
Since Ben-Zvi acquired Maariv in September 2012, his family has given some NIS 50 million to the daily. Maariv is jointly owned by Ben-Zvi; his father-in-law, British tycoon Conrad Morris; and his brother-in-law, Hillel Goldblum. Ben-Zvi's family asked the McKinsey consulting firm to prepare a financial report on Maariv. The report's conclusions apparently prompted them to announce they'd be halting cash infusions.
The newspaper has been facing financial troubles due to the declining number of subscribers and dropping advertising revenue. As of the first quarter of this year, the newspaper was burning through cash at a rate of NIS 5 million a month. This is less than when it was controlled by Discount Investments, a member of Nochi Dankner's IDB group.
Over the past few weeks, the newspaper carried out a layoff plan under which 150 workers departed by choice, and distribution was outsourced. Ben-Zvi also intended to halt the newspaper's printing operations, in violation of his acquisition agreement. He also halted payments to contractors, including the cleaning staff and freelancers working for Maariv and the other newspaper he owns, Makor Rishon. In addition, the Globes Morning supplement, produced in partnership by Maariv and Globes and distributed alongside Maariv, did not come out on two days last week due to a lack of payment.
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