Channel 10 Reporter: How We Reached the Cusp of Bankruptcy

Raviv Drucker on Facebook: Second Authority reversed a decision that would help save channel. Meanwhile, President Rivlin slams cessation of broadcasts.

Tomer Appelbaum

Raviv Drucker, a senior journalist from Channel 10 news, explained Monday in a post on Facebook how the television station reached the verge of bankruptcy and is in danger of being shut down at the end of the year – and what he thinks needs to happen now.

Meanwhile, Israeli President Reuven Rivlin referred to the channel's cessation of broadcasts Sunday night as "casting a shadow on Israeli democracy."

Channel 10, which operates under the auspices of the Second Authority for Television and Radio, has once again fallen deeply in debt and its future is in jeopardy.

Drucker wrote on his post: “For those who want the details: Channel 10 asked for a [broadcasting] license, according to the law. The most important request from [Channel 10] was to pay its debt to the Second Authority: 36 million shekels ($9.21 million, in franchise and distribution fees). This sum was raised, but the lender made its transfer conditional on the channel receiving a license. The authority said: We don’t work that way ... We don’t work with conditions.

"The channel said: Okay, we will raise the money for a few days from Bank Leumi, and will give it to you. If you give a license, our lender will return the sum to the bank and the channel will be saved. If you do not [issue the license], the channel will close and instead of seizing bank guarantees totaling 45 million shekels, they will only seize 9 million shekels, since you have received the remaining 36 million shekels. To the best of the knowledge of the managers of the channel, representatives of the Second Authority accepted that framework and .... it seemed that everything was going smoothly."

Raviv continued: “[Sunday afternoon] a letter was received from the Second Authority that said ‘no.’ If the channel closes, we will demand from the bank another 45 million shekels (i.e., in addition to the 36 [million shekels]). The reversal in position seemed strange. It was clear that in such a situation the bank will not transfer the money and the rumors that reached us hinted at 'political interventions' (I emphasize: These are rumors. I have no evidence and this is all possible based on what we've experienced in the past; people are suspicious of everything).

"In short, without a solution to the problem of transferring the money, there can be no discussion in the Second Authority's council at all on the request to approve a license and ... the question that will remain open, if [the council] convenes, is how much the council will be willing to be flexible in the matter of the [bank] guarantees and issuance of a license. A decision [against issuing] a license will immediately close the station since there is no legal way, it seems, to allow the continuation of its broadcasts in the remaining 72 hours."

The Second Authority had said in a statement Sunday, “As long as the channel cannot cover its debts from the period of its licensure, which have risen to tens of millions of shekels, there is no possibility, legally or publicly, to convene the Second Authority council to discuss the channel’s request for a license.”

Furthermore, the authority announced that it would seize the 36 million-shekel debt from the bank guarantees Channel 10 had posted. In so doing, the authority rejected the offer from a large media purchasing company, Universal Media, to front Channel 10 the money to begin paying off its debt.

Channel 10, which opened in 2002, runs a distant second in ratings to Israel's Channel 2. By 2009, its debts had exceeded 1 billion shekels, and it has been living on borrowed time ever since.

The authority’s decisions effectively mean the collapse of Channel 10 if it cannot come up with the necessary funds in time. A number of well known investors, Israeli and foreign, have been mentioned as having shown interest in bailing out Channel 10 in recent months, but in the end none of them was willing to put up any money.

Another possible option could be enactment of special legislation in the Knesset intended solely to grant Channel 10 an extension to its franchise for a year or two – similar to the extensions the channel has received and which kept it from going out of business a number of times in the past. But this time the politicians did not come through for the broadcaster before dissolving the Knesset and calling new elections.

There are those who are accusing politicians – and in particular Prime Minister Netanyahu – for wanting Channel 10 to close down.