Minister's Plan May Solve Channel 10's Financial Straits

There are signs the problems surrounding Channel 10's continued operation may soon be resolved. Communications Minister Ariel Atias convened an urgent meeting on Sunday for senior officials from the Second Authority for Television and Radio and the Communications Ministry and station executives. At the meeting, Atias presented a plan that would enable the station to repay its debts and extend its franchise for another two years.

According to the minister's plan, similar to that proposed earlier by MK Gilad Erdan, the station's NIS 103 million debt would be broken down into content debts amounting to NIS 70 million and debts relating to the franchise fee. The station will be required to repay the debt from content through certain productions and present financial guarantees and securities. The debt would then be dispersed and settled between the Finance Ministry and the station.

After he presented the plan, the minister left the meeting and the Second Authority and station executives began discussing the arrangement. "There has been a substantial shift in Channel 10's position," Atias said. "The shareholders are willing to provide guarantees for their debts, mainly in the area of content, which in my eyes is more important, because that is what the viewers see and what will finance the creators' work."

If the station and the authority do indeed work out an arrangement, Atias will submit new regulations for the approval of the Knesset's Finance Committee that will provide the parties with more time to put the deal in motion. All of this is expected to take place as early as this week.

Meanwhile, the Second Authority's council was slated to convene yesterday to set up a committee to draft a new tender for the station. As of Sunday night, it was still unclear how the matter would be discussed.

The station's franchise is set to expire in January 2010, unless extended for another two years. The main obstacle impeding the extension of the franchise is the station's NIS 103 million debt. The Second Authority, which was asked to decide on the matter, asked for another extension to negotiate with the station and this request was accepted by Atias and ratified by the Knesset Finance Committee. However, another meeting requested by Likud MK Gilad Erdan overturned the decision and, by a two MK majority, determined that the authority would issue a new tender for the station.

The following day, station employees began protesting, voicing their concern that the station would shut down well before the end of its franchise. "It is important to have commercial channels in Israel," explained Atias. "Everyone benefited from this, certainly during a period of financial crisis. The decision in the Knesset committee was a serious error. All I wanted to do was enable the Second Authority to hold a dialogue with the station and the decision reached was to reject my request and halt the dialogue a month early. Anyone who thought that a new tender would basically be a change in the owner is apparently mistaken. On the other hand, we have to verify that the station will repay its debts."

Channel 10 executives said in response: "We welcome Minister Ariel Atias' efforts to resolve the crisis."

However, a senior station executive said, "we are trying to repay all the content debts, but without adjusting regulations to match the economic reality, we will not be able to carry on. We will not be able to carry on losing NIS 100 million every year."