U.S. billionaire Ronald Lauder has sold his 30% stake in Channel 10 to Israeli ad mogul Yafit Greenberg for a symbolic $1, offloading the money-losing station that badly trails its larger commercial rival, Channel 2.
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Channel 10’s employees have greeted Greenberg’s arrival with apprehension; she has experience in PR and advertising, not journalism. Still, she has good ties with key players in the media industry.
“It’s illogical that the controlling stakeholder of a news organization is also a promoter for commercial interests,” said a source at Channel 10.
Also, the company’s employees want to ensure that a collective-bargaining agreement signed in 2012, calling for a pay raise and other benefits in 2014, will be upheld.
“Anyone seeking to buy shares in the channel must realize that its main assets are its hundreds of dedicated employees, who should be guaranteed journalistic freedom and solid financial backing,” the channel’s employees union said in a statement.
Greenberg’s company G. Yafit Communications is taking over the stake with its partner, Ofra Meitar, the wife of Israeli businessman Shmuel Meitar.
In the coming months the two partners will be funding the station instead of Lauder, using their own money until more investors are found. The acquisition also entails the assumption of more than NIS 100 million in debt, including a NIS 57 million state loan granted in 2012.
“She’s a seasoned businesswoman,” a source in the television industry said about Greenberg. “She won’t throw one shekel of her money at anything if she doesn’t know she’ll see a return.”
Another source familiar with the deal said Greenberg had long dreamed of controlling a TV station. “Now she’s achieving that dream,” the source said. “At the same time she’s coming with an organized plan and really believes that the station can recover.”
Lauder, the heir to the Estée Lauder cosmetics empire and the president of the World Jewish Congress, had invested more than NIS 500 million in the channel in recent years, but in recent months expressed dissatisfaction with the station’s losses.
The sale to Greenberg also apparently breaks a deadlock over a request to extend Channel 10’s license beyond next year. The request requires the support of 51% of the station’s shareholders, and the 51% have to be Israelis. Lauder is American.
The extension has been stymied by another investor in the station, Israeli-American Hollywood producer Arnon Milchan. He has withheld his support for the license extension, saying Lauder reneged on an agreement to cover any of Milchan’s losses on his investment.
Even if Milchan does not come on board, Greenberg could get the license extended by teaming with another Israeli investor, Yossi Meiman, who holds a 46% stake.