Maiman May Bring Keshet or Reshet Into Channel 10

Channel 10 owner Yosef Maiman is in preliminary talks to acquire one of two franchisees at rival Channel Two, Reshet or Keshet, according to sources close to the talks. The sources said parallel, separate talks have been conducted for the past few weeks with the franchisees, which face a decision regarding continued broadcasts under the new conditions set by the Second Broadcasting Authority for extending their licenses, conditions they have called financially unreasonable.

The sources noted that Maiman plans to improve his fledgling commercial channel's rating by acquiring popular programs as well as their professional capability to produce such shows, attracting advertisers to the channel. Associates of the franchisees estimated yesterday that the three companies together are valued at $80 million. Maiman and Keshet recently received Antitrust Commissioner Dror Strum's approval to hold talks on the subject of costs, contingent on those talks not deviating from coordinating broadcast content.

Keshet's spokeswoman denied that the sale of the company is being discussed.

Sources close to Channel Two franchisee Telad noted that a year ago talks were held regarding business cooperation between the company and Channel 10, but they ended with no results. And the sources said no such talks are being conducted today.

Reshet's response was unavailable yesterday.

Maiman's holding company Merhav refused to comment, noting that it would report on the talks when agreements reached justified it.

Maiman is simultaneously negotiating the entry of a strategic partner in Channel 10. Negotiations are being conducted with European investment group Apax and with a South American communications group. Maiman has become the primary investor in Channel 10 in the past year, after injecting NIS 85 million into the venture in 2002. Since its establishment, Maiman has invested NIS 150 million of the total NIS 300 million put into the channel, including bank leverage.

Channel 10's business plan projects the owners absorbing losses for the coming years, injecting another NIS 150 million in 2003.

In order to reduce these losses, Maiman is apparently in both trying to introduce a strategic partner that will immediately relieve the burden, as well as moving on the acquisition of a company with proven capabilities for advertisers, and this would substantially improve Channel 10's revenue stream in the medium- and long-term.