The Knesset passed legislation Friday that threw a lifeline to financially-strapped Channel 10, keeping the television station running despite the mountain of debt it owes the government. The channel’s license had been due to expire at the end of the month.
Channel 10’s competitor, Channel 2, has suffered financial woes of its own and demanded the same concessions that Channel 10 sought from the government. In the end, the legislation benefits both stations and extends Channel 10’s license by two years.
Earlier this month, proposed legislation designed to keep Channel 10 on the air stalled when Prime Minister Benjamin Netanyahu agreed with Speaker Reuven Rivlin that it was inappropriate to push through bills in the run-up to the January 22 parliamentary election − Israel’s first election in four years.
Channel 10 and Harel Locker, the director general of the Prime Minister’s Office, had already worked out the outlines of a bill. But when it became clear that the law would not be passed by December 31, the station’s board passed a resolution to shut it down on that date, laying off the entire staff.
The station also went off the air overnight one night in protest, and Channel 2 announced that it was scrapping two popular public affairs programs − “Meet the Press” and “Six O’Clock with Oded Ben Ami” − and scaling back its major evening newscast from an hour to 45 minutes. Channel 2 explained on the air that it was taking these steps “in light of government policy.”
That raised a few eyebrows in the industry; some people said the station was using the public airwaves to further its commercial interests. Meanwhile, the Second Television and Radio Authority, which regulates the activities of Channel 2 and Channel 10, protested changes to broadcast schedules that the authority said it had not approved.
Channel 10 executives reacted to the stalled legislation by sending out dismissal letters to its entire staff, which are now being retracted, and by holing themselves up for 40 minutes at the Finance Ministry earlier this month.
Netanyahu ultimately relented and the law was passed early Friday by the full Knesset after a grueling six-hour debate on the bill’s merits in the legislature’s Economic Affairs Committee.
Regarding Channel 10, the new legislation amends the law governing the Second Television and Radio Authority. It is based on the agreement between the station and Locker, the director general of the Prime Minister’s Office.
The provisions require the station to pay NIS 35 million to the state by the end of the year for license and royalty arrears. Also, the station’s main shareholder, cosmetics heir and World Jewish Congress President Ronald Lauder, must inject another NIS 65 million.
Lauder has actually pledged to pay NIS 80 million once the necessary legislation has been passed. The law also gives the station until September to move its news operations to Jerusalem from the Tel Aviv suburb of Givatayim.
The concessions that the new law provides the two franchisees at Channel 2, Reshet and Keshet, include the right to defer obligations worth NIS 240 million involving programming production. This involves about NIS 80 million for producing quality content from previous years and about NIS 160 million for the years 2013 through 2015.
In the end, the only significant opposition to the bill came from producers of television programming who said they would be the ultimate losers and suffer massive job losses.
Under the new law, Channel 2’s franchisees also get the right to get their own channels as of October 2014. Currently, the two franchisees split access to the airwaves each week. Under the law, they also have the option to extend their sharing arrangement on Channel 2 through October 2017, a two-year extension on the current license terms.
“In the entire fight over the past six months, there were two major turning points,” said the chairman of Channel 10, Avi Balashnikov. “Holing ourselves up until the financial aspect was resolved was the first stage,” he said, admitting that this move failed to produce an agreement.
He said the second stage was nearly over when station representatives put pressure on Attorney General Yehuda Weinstein to act, even protesting in front of his home in Herzliya Pituah. A petition was also filed with the High Court of Justice and MKs were lobbied.
Channel 10 executives do not simply view the new law as a lease on life for the next two years. The amendment gives them a chance for a new license beyond 2015, but the immediate future does not appear to be an easy period for the station. The law forces it to decrease spending not linked regulatory requirements by 20%, so salaries and management expenses will be cut.
Finally, the legislation threw a lifeline to regional news programming that is carried on cable and satellite television, at least for the next seven months. But on an annualized basis, the budget for their news operations will decline from NIS 25 million to NIS 18.5 million; this could lead to layoffs of dozens of employees.
In the past, the local news operations were funded by royalties from cable operator HOT and satellite television service provider Yes, but starting next year the royalty payments end.
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