Cosmetics billionaire Ronald Lauder, Channel 10's biggest shareholder, will transfer his share of Israel's troubled Channel 10 to co-shareholder Yosef (Yossi) Maiman, in a deal hammered out Monday night with the help of Second Television and Radio Authority officials.
In addition, Lauder will inject $10 million into the commercial broadcasting station, to help cover its debts to suppliers, before officially cutting ties with Channel 10.
As Maiman is prohibited from holding more than a 51% of Channel 10, Lauder - who holds a 30% stake - will transfer a portion of his shares to Maiman while handing the rest over to a trustee. The agreement followed after a harsh exchange between representatives of Maiman and Lauder over who should be responsible for the channel's fate, which has been uncertain since about 2008. Maiman's side had demanded that Lauder inject 50-60 million shekels ($14.3 million-$17.1 million) before parting ways with the station, but was forced to make do with 35 million shekels ($10 million). Maiman has personally guaranteed about 50 million shekels ($14.3 million) for the channel’s debts, meaning he would not want to see it shuttered.
The agreement among the shareholders enables the continued operation of Channel 10 in the coming months, but means it will be operating without an investor like Lauder, who injected about 170 million shekels ($48.6 million) into the channel this year, and rescuing it, before deciding to abandon the station. Maiman is unable to provide funding for the channel, which will need a new major investor to survive in the coming year.
Lauder’s latest funding will enable the channel to close most of its budget gaps created in 2013 as a result of investment in new productions for next year. Channel 10 is hopeful that its new content will be profitable but, based on the present television market and on Channel 10’s history, there is no guarantee the channel will achieve operational balance.
Regardless, Channel 10 intends to submit a request for a broadcast license until the end of next year. The channel will have to demonstrate financial stability and present 160 million shekels ($45.7 million) in guarantees if it wants a license for 2015.
Lauder will transfer 5 percent of his shares to Maiman, who will once again hold 51 percent. Due to regulatory restrictions, a shareholder cannot hold more than 51 percent, so that the other 25 percent of Lauder’s shares will be held in trust by Maiman for Lauder.
Lauder’s representatives on the Channel 10 board of directors, Avi Balashnikov and Michal Grayevsky, are expected to leave the channel with him. Channel 10 CEO Rafi Ginat is expected to remain in his post, but the channel is expected to undergo efficiency measures.
Golan Yochpaz, CEO of Channel 10 News operations, sent an e-mail to employees on Tuesday morning, updating them about recent developments. “Last night we reached a solution that will guarantee the continued existence of Channel 10 and Channel 10 News. Shareholders Ron Lauder and Yossi Maiman reached agreements to the effect that Mr. Lauder’s shares will be transferred to Mr. Maiman,” wrote Yochpaz.
“The agreements were reached thanks to considerable effort and involvement on the part of Shai Babad, the CEO of the Second Television and Radio Authority, who convened the sides last night, and at the conclusion of long discussions held by the channel’s CEO, Rafi Ginat.”
Yochpaz also wrote that the outline that was reached "will enable an immediate injection of money, which will be used, among other things, for the channel’s producers and suppliers, and will make it possible to carry out the channel’s work program for the coming year, with a series of new programs.”
Want to enjoy 'Zen' reading - with no ads and just the article? Subscribe todaySubscribe now