Channel 10 to Change Its Ways

Channel 10's revenues fell by 30% in the first seven months of 2009 compared to the same period last year.

Channel 10's revenues fell by 30% in the first seven months of 2009 compared to the same period last year. The broadcaster lost a fifth of its market share in the second and third quarters of the year. Now it seeks to rebrand itself as specializing in documentaries and investigative reporting, to compete with Channel 2. That, at least, is what it says in Channel 10's proposal for - and agreement with - the Second Television and Radio Authority on renewing its franchise without holding a new tender. TheMarker has obtained a copy of the proposal. The final agreement would also include agreements between the Second Authority and the Finance Ministry.

The proposal, signed by the CEO of Channel 10 (and former CEO of Haaretz, Yossi Warshavski), is almost a month old. It was sent to the Second Authority on September 16, after weeks of intensive negotiations. Earlier in September the authority decided to freeze the publication of a new tender for the television franchise.

Since then a large number of problems have cropped up between the television channel and the authority, mainly regarding Channel 10 paying off its unmet commitments for funding the film industry, as well as its failure to fund original, high-quality dramatic productions.

The Director General of the Second Authority, Menashe Samira, recently stated that the negotiations have run their course and that no agreement can be reached. The authority will vote Tuesday on whether to put out a new tender, and Channel 10's future is unclear.

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 - and other broadcasters - as part of the justification for the agreement, which would lower Channel 10's present contractual obligations by tens of millions of shekels over the next few years. Channel 10 also justified its demands based on various leniencies offered to the Channel 2 franchisees.