Ministries Move to Save Cash-strapped Channel 10

The finance and communications ministries are expected to propose a bill today to legislate the extension of the Channel 10 broadcasting company's television franchise, sources in the communications industry said yesterday.

The decision to introduce the bill in the Knesset Economic Affairs Committee comes after the Second Authority for Television and Radio decided yesterday that it would not renew the company's franchise, which ends in January, and would issue a new tender.

Today's debate over the bill is likely to essentially become a debate over Channel 10 itself.

"The communications minister will support the move to change the legislation, led by the Finance Ministry, for the good of saving Channel 10," the Communications Ministry said in a statement. "In the context of the change, the main points of the arrangement reached with the station will be set out in law, and legislation will resolve the few issues that are still open, while preserving creative rights."

Channel 10 warned that the country could find itself with a TV monopoly.

"When the television industry collapses, the question will be why no one took responsibility and implemented the solution to which everyone has agreed," said the company.

There have been a lot of problems between the broadcasting company and the television authority, primarily revolving around the channel's failure to meet its commitments to provide funding for the film industry and to fund original, high-quality dramatic productions.

Channel 10's proposal for renewing its franchise with the television authority states that it seeks to rebrand itself as specializing in documentaries and investigative reporting, to compete with Channel 2.

Channel 10's revenues fell by 30 percent in the first seven months of 2009 compared to the same period last year, and the broadcaster lost a fifth of its market share in the second and third quarters of the year.

Channel 10's proposal would commit it to NIS 206 million in payments in 2009 through 2011, including NIS 80 million for its past, unpaid commitments. The broadcaster also appended an opinion from Dror Strum, an attorney and former antitrust commissioner, who wrote on behalf of Channel 10 that the economic crisis had seriously affected the station, as well as other broadcasters. The effect of the crisis was presented as a reason for the Second Authority to accept the proposal, which would lower Channel 10's present contractual obligations by tens of millions of shekels over the next few years. Channel 10 also based its demands on various leniencies offered to the Channel 2 franchisees.