Taking Stock / Maiman: You Blinked

Yossi Maiman is playing poker. For half a year now, he's been playing with the entire television industry, and with the capital market. Holding his cards close to his chest, each month he lays another chip on the table.

Yossi Maiman is playing poker.

For half a year now, he's been playing with the entire television industry, and with the capital market. Holding his cards close to his chest, each month he lays another chip on the table.

We figure that each month, Channel 10, which he's been financing all by his lonesome, burned up $4-5 million. The bill for the year would therefore be more than a quarter-billion shekels. No question about it, the stakes are huge.

The hordes of journalists, media stars, TV people, photographers, advertisers and businessmen would have bet the house that Maiman wouldn't fold. Until this week, that is.

One paper evaluated his fortune at $3 billion. Associates said he was determined to make the channel succeed, and that he had the will and the means to make it so.

"Maiman looked me in the eyes and said he had the money and will to finance the channel until it could achieve profitability," said one of Channel 10's top personalities, who was recruited for its news company a few months before the station's re-launch.

"Did you ask for guarantees? Did you get a guarantee that your salary would be paid for a year or two?" we asked. "I have a promise from Yossi, and that's worth more than any bank guarantee," he answered in a blink.

The A-team that Maiman put together in the last half-year before relaunching the channel was convinced that the secretive businessman had almost unlimited resources. He gave the impression that he was in for the long run, and that he would never throw down his cards.

The checks he wrote star TV anchor Miki Haimovitch and the millions he poured into the news corporation, month in and month out, made him seem indomitable and willing to invest more and more in the station. The tremendous ad campaign after the channel's second launch proved that, come what may, Maiman wouldn't give up, they felt.

Marketing costs

But the campaign to recruit star quality, the massive promotion and the insane cash burn rate could be interpreted otherwise - as "marketing costs." By which we mean, costs Maiman was bearing in order to market the business to potential investors.

In recent months, Maiman has made terrific efforts to recruit new investors for the channel. Associates said he wanted only "strategic investors" and was unwilling to have his holding significantly diluted. He may, as we intimated above, have been playing poker.

But there's another possibility, namely that he was feverishly searching for investors to carry the stretcher with him. It's heavy. Very heavy. It weighs $50 million a year. You have to be very, very rich to bear that stretcher all by yourself.

The rumpus kicked up over Channel 10's relaunch - the stars, the money spilled, the massive advertising - were all designed to help Maiman rope in more investors, to dilute his holding, to find strong hands to help him bear the stretcher.

He held intensive talks with Ron Lauder and Vladimir Gusinsky, apparently believing he could reel in at least one of them. But after they'd checked it out, they saw what any decent analyst could see from a mile away - that the numbers weren't adding up, the gap between costs and income over the next year or two was too big, that they'd be biting off more than they could chew. It's a business for billionaires, real ones, not paper ones in the press.

Maiman hasn't thrown in the towel. He's been presenting the channel's board, lender Bank Leumi and the press a slew of creative ideas designed to reduce Channel 10's burn rate, and to bring in partners. He will apparently be asking the regulators to allow him to slim down the channel, maybe turn it into a pure news channel. Regulatory changes, he will claim, will allow him to cut costs, recruit investors or continue financing the business himself.

What's sure is that he doesn't mean to keep cutting $5 million checks, month in and month out.

Tried and fried

But if the chances of the channel ever making it appeared slim before, now they look anorexic. Why? Because Maiman blinked.

And as all savvy poker players know, once you blink, it's all over. You lose the faith of the banks, of potential investors, of your team.

For half a year, you sold everybody the image of a man with hundreds of millions of dollars in cash, who could lavish money on your pet channel and meant to do so until it hit the black. What do you have to say now?

That is Maiman's story. It is the story of the hundreds of people who bet on him. And it is also the story of the future of television, media, entertainment, production and advertising in Israel.

If Channel 10 is closed down, or significantly reduced in scope, it will be a death-blow to Israel's television and media business. The channel supplied a living to thousands of people. It was supposed to stream hundreds of millions of shekels a year to the television and media market. It posed lively, captivating competition and had begun to break rival Channel 2's monopolistic hold over television advertising.

In short, Channel 10 did nothing but good to the sectors in which it operated.

Closing it, or cutting it down into a niche channel, could provide further proof that most of Israel's business sectors cannot support a large number of players. We saw the same thing with the banks, commerce, we saw it in several sectors.

It's also yet another reminder of how sorry Israel's economic situation has become, and it doesn't augur well for the future. Commercial television is but one of many sectors in which we're going to see competition disappear, and a return to the era of monopolies or oligopolies.