Major Israeli Television Broadcasters Cancel Planned Merger

Reshet 13 blames nixed merger with Channel 10 on the body that regulates commercially-operated television and radio broadcasting in Israel, as well as uncertainty in the market

FILE Photo: The news desk at Channel 10.
Tomer Appelbaum

Reshet 13 announced on Monday that it was canceling a planned merger with Channel 10, attributing the decision to behavior by the Second Authority for Television and Radio, the body that regulates commercially-operated television and radio broadcasting in Israel, and uncertainty in the market.

Reshet officials declared they were returning to full operation.

The official reason for canceling the merger was attempts by Second Authority Chairwoman Yulia Shamalov-Berkovich to torpedo the deal. It took over two months before the Second Authority announced a hearing on the merger proposal, which could take several weeks.

>>Approve the merger of TV broadcasters Channel 10 and Reshet | Editorial 

“We regret that despite the great admiration and cooperation between owners of Reshet 13 and Channel 10 in recent months during the negotiations through the signing of the agreement of merger principles, and despite the understanding that merging two channels is the most appropriate solution for the Israeli television market, the controlling shareholders of Reshet were forced to announced today the cancelation of the merger, and Channel 13’s return to full operation, including building and investing in the broadcast schedule,” Reshet’s controlling shareholders announced.

The announcement stated that the company’s board is expected to convene in the coming days to formally rescind the merger decision, which it had agreed to a number of months ago, and would advise company management to present its plan of operation and broadcast schedule for the coming years.

A hidden agenda may lie behind the dramatic announcement. Reshet owners probably are still interested in a merger and made the announcement to pressure the Second Authority to speed up its decision and to pressure Channel 10 owners to reach agreements on the merger regarding remaining significant gaps between the sides.

Communications market observers have speculated for weeks that Reshet was never interested in the merger, and that the entire negotiations were conducted to deal a further blow to Channel 10 that might force it to close, so that Reshet could then buy up its assets.

Either way, a cancelation of the merger would make the Israeli television market particularly chaotic. The three television bodies lack any operational planning, and observers believe that Channel 10 owners will close the station or severely limit its operations, like reducing it to a news channel. Continued operations by all three players would lead to serious losses for Reshet and Keshet, too, and there future is unclear.

Reshet stated the merger was canceled because “a company cannot operate over time in uncertainty, all the more so a television channel committed to production planning and more.” Pointing to what was referred to as “foot-dragging” in the approval process, the company noted: “The upshot of the authority’s behavior is one thing – torpedoing the merger, after the antitrust commissioner examined the issue in depth and the options available, and decided to approve it.”

The company expressed “great admiration for the shareholders, management and employees of Channel 10 and News 10, who understood that the merger was necessary, despite its complexity.” The company added, “We still believe the right solution for the local television market is a merger of forces, but with a heavy heart and despite great efforts, we reached a point where we look at reality and put our best management and financial resources in Channel 13, and continue offering the viewing community quality, interesting and relevant television for the coming years as well.