Nimrodi: Tycoon or Paper Boy

Ofer Nimrodi, the controlling shareholder in Maariv newspaper, was embarrassed last week.

For almost two months, Nimrodi had categorically denied negotiating to make Arcadi Gaydamak his partner in family firm Israel Land Development Corporation (TASE: ILDC). Suddenly, just as he went public with the negotiations, Gaydamak gave him the cold shoulder.
Nimrodi has had to handle a lot of embarrassing things in his life, but this one nearly drove him nuts.

At 8:56 AM Wednesday morning, ILDC announced that the Nimrodi family intended to sell half of its holdings to Gaydamak. At 1:12 P.M., it had to admit that the talks were off.

Gaydamak does not play by Israel's rules. He has no sentiment for anyone and manages his affairs brilliantly. According to surveys, he enjoys incredible support, and is being chased by politicians: Benjamin Netanyahu, who turned up at Gaydamak's Hanukkah party, has not ruled out asking Gaydamak to join the Likud.

Gaydamak returned the favor, announcing he would support Netanyahu. His exhibitionist shows of charity allow him to do whatever he likes - and his idiosyncrasies do not hurt his standing.

At the other end of the rainbow

 Nimrodi is in exactly the opposite position. Maariv has been losing money for years and his many attempts to sell the paper have not gone well.

Every few months somebody else's name pops up as a candidate to buy the paper. Nochi Dankner of IDB, Noam Lanir of Empire Online, American billionaire Sheldon Adelson: this time it was Gaydamak's turn.

You might think that the long list of potential buyers testifies to the attraction of the asset. In practice, however, it is beginning to look like a joke.

Some think Nimrodi is brilliant, but he's a failure as a businessman. His investments in Maariv seem to be in bad shape.

His actions surrounding the "sale on, sale off" for the paper, and the spin about various and sundry buyers, do him no honor. He looks more like a newspaper boy than a real businessman.

It seems that the potential buyers actually get more out of the reports than Nimrodi. People think that whoever controls a newspaper, or another media outlet, enjoys an extraordinary position of power and influence. This is how they justify the willingness of business people to make due with low profits in the media sector.

But maybe you don't actually have to own a newspaper to enjoy such influence. Sometimes it is good enough to be a potential purchaser of a newspaper to win respect. It is certainly cheaper.  Perhaps that's why Gaydamak made a u-turn at the last minute, before becoming trapped in Nimrodi's journalistic black hole.