New Owner of Maariv Daily Commits to Employing Solely 300 Current Workers

As deal to sell the Israeli newspaper is finalized, IDB Holdings, the current owner, seeks protection from its creditors – which could freeze claims filed against the paper, including money owed to some 1750 workers.

Just before the Yom Kippur, hundreds if not thousands of workers at the Maariv daily newspaper will be out of work. Many may also not receive the severance pay or pensions they thought they had coming. Maariv's journalists union said they would strike beginning on Monday and stop the paper from publishing on Tuesday morning.

Shlomo Ben-Zvi, whose Hirsch Media firm publishes the right-leaning nationalist paper Makor Rishon, will buy the Maariv daily newspaper for NIS 40 million.
The deal with Nochi Dankner's IDB Holdings was finalized Thursday morning, and Ben Zvi will pay the sum in a number of payments over the next year.

On Thursday, IDB asked the Tel Aviv District Court for protection from its creditors, but Judge Varda Alshech asked for clarifications and has yet to rule. Maariv said it owes creditors some NIS 400 million.   

IDB's plan is to close the old company and the assets Ben Zvi is buying will be transferred to his company - all the rest will be sold off or shut down and the employees fired.

In addition to the daily paper, Ben Zvi is buying the Maariv brand and intellectual property rights, the nrg website, the Maariv publishing house, its local weeklies and periodicals and the paper's subscriber base. But the deal does not include the workers or the printing plant and the land it sits on in Bat Yam.

Ben Zvi will also pay up to an additional NIS 34 million, based on whether he can collect a variety of Maariv's debts from customers and subscribers. The deal still needs regulatory approval, such as from the Antitrust Authority, and will close in a month ¬ if approvals are received.

It is still not clear whether Maariv will be able to pay its September salaries.
Maariv's announcement to the Tel Aviv Stock Exchange, said that Ben Zvi was committed to offer work to some 300 present Maariv employees, mostly journalists.

The buyer will also consider employing another 100 as needed. But no agreement was reached over 1,000 workers in distribution and the printing plant ¬ and it is likely most of them will be fired in the long term.

The present Maariv ownership and Ben Zvi are still discussing that the new paper will continue to be printed and distributed by the present employees, at least for the next six months.

Ben Zvi met with representatives of the journalists union in the afternoon, but no agreements were reached.

Hundreds of Maariv employees, joined by journalists from the rest ofthe Israeli media and others protested the expected firings on Thursday afternoon.
It seems that for years Maariv management did not deposit all the pension deductions they were supposed to, for at least some of the workers, nor funds to cover the severance pay the employees are due.

Union leader Haggai Matar said: "The deal creates a situation where our fears are divided between the past and the future. As to the past, it turns out that based on its declaration Maariv owes workers NIS 95 million, and we still do not know how and when they are planning on paying it. The second fear is for the future, what will happen to the newspaper, how many jobs will be saved, for how long and under what conditions. We still do not have answers to these things," said Matar.

The workes will continue their legal struggle against the paper, the protests and sanctions, as well, he said. The sanctions will start on Monday, which is when the mandatory cooling off period ends.

Despite various promises, the union did not participate in the talks over the sale of the paper. Any employees Ben Zvi does hire will lose all their seniority and any other accumulated benefits at Maariv, which are the responsibility of the old management.

Alshech asked Maariv for clarifications on what she called the "problematic" request to appoint one of IDB's lawyers as one of the trustees for Maariv. The judge set the next session for Sunday morning. If Alshech grants Maariv protection from its creditors, it means the freezing of all claims for now, including those of employees who have been fired.

Industry, Trade and Labor Minister Shalom Simhon instructed his staff to open an investigation into whether Maariv had violated labor laws and its employees' rights. Simhon also instructed the head of the Employment Services to make preparations to handle the hundreds of workers being fired.

Dankner has provided a commitment to Maariv's employees that all of the sale proceeds from Maariv would be directed first to the paper's liabilities including its obligations to its workers. He also promised to include a worker representative in the negotiations with Ben-Zvi over the sale of the paper's intangible assets.

Ofer Vaknin