The Antitrust Commission could impose conditions on the impending sale of the Makor Rishon daily to Las Vegas casino magnate Sheldon Adelson, which would bar any joint involvement between the paper and Adelson’s free daily, Israel Hayom, either with respect to content or on a business level.
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Sources in the antitrust field say Antitrust Commissioner David Gilo might impose such limitations on the pending transfer of the paper from Shlomo Ben-Zvi, who owned the paper along with the Maariv daily. Ben-Zvi sought court protection from creditors after running into financial difficulties. He has now been forced to sell both publications along with Maariv’s news website, NRG, in the face of a mountain of debt.
Adelson was also the highest bidder for the NRG site. His mass circulation free newspaper Israel Hayom is seen as supportive of the government of Prime Minister Benjamin Netanyahu. Makor Rishon has a right-of-center Zionist orientation.
The Jerusalem District Court approved the sale of Makor Rishon and NRG to Adelson for 17 million shekels ($4.9 million), but conditioned the transaction on the approval of the antitrust commissioner. The court approved a 4 million shekel bid for the sale of Maariv to Jerusalem Post owner Eli Azur, but also conditioned that transaction upon approval by Gilo.
In recent weeks, workers at Makor Rishon and the court trustee for the publication have both asked Gilo to expedite approval of the sale of Makor Rishon because some employees and freelancers there have not been paid for more than two months. Ben-Zvi injected an additional 2.5 million shekels into the media operation, but has no plans to inject further funds.
Despite the pressure to provide quick approval for the sale, staff at the Antitrust Commission appear determined to carry out a thorough investigation of the transaction, its implications on the newspaper market and the extent of Adelson’s presence in the market. At a recent meeting with the parties, Antitrust Commission officials made it clear that the pending sale presents difficulties, and that they saw Adelson’s control of a newspaper in addition to Israel Hayom as problematic.
Antitrust experts have expressed the view that even if Gilo ultimately approves the sale of Makor Rishon to Adelson – who has been a major Republican Party contributor in the United States – the limitations would be imposed to ensure full independence for the management and editorial staff at Makor Rishon and to prevent Israel Hayom from capturing too wide a share of the print media market. To achieve that aim, Gilo could bar the staff at Israel Hayom from involvement in the content of Makor Rishon, and might go further and prohibit cooperation on a business level. Under such a model, the management and editor-in-chief of Makor Rishon would not report to Israel Hayom’s management.
“The merger is currently being thoroughly examined by commission staff,” the Antitrust Commission said in a statement. “In light of the difficult situation for the workers, we are expediting the examination to the extent possible, but without forgoing an in-depth investigation.”
Economy Minister Naftali Bennett, who heads the religious-Zionist Habayit Hayehudi party and is a harsh critic of Israel Hayom, has called the daily a mouthpiece for Netanyahu. He was earlier reported to have tried to get the publisher of the Yedioth Ahronoth daily, Arnon Mozes, to buy Makor Rishon. Mozes never submitted a bid, however. Concern has been expressed by Bennett’s associates that Makor Rishon would support Netanyahu under Adelson’s ownership and serve as a platform for criticism of Bennett, a political rival of the prime minister’s.
Officials at the Antitrust Commission appear to be cognizant of the potential issue of Israel Hayom’s market share, particularly as it is distributed on the street for free, but they say Bennett’s staff has not been in touch with them. Although Bennett is the minister responsible for oversight of enforcement of business antitrust legislation, the commission staff note that theirs is an independent professional agency, adding that they reach their decisions based only upon market data.