Just 8 months after Channel 2’s breakup, two top TV networks to merge

Just 8 months after Channel 2’s breakup, two top TV networks to merge

Move by Reshet, Channel 10 follows massive financial losses for both companies, with officials arguing the Israeli market is too small to support three commercial channels

Illustrative: The Channel 10 news logo. (YouTube/TheNetcomHD)
Illustrative: The Channel 10 news logo. (YouTube/TheNetcomHD)

Two major Israeli television channels, Reshet and Channel 10, have announced plans to merge as each struggles to compete for the viewing audience with ratings-dominating Keshet.

The companies are slated to submit a formal request for the merger to Israel’s Antitrust Authority in the coming weeks.

Reshet broadcasts on channel 13, and Channel 10 — named before a reorganization shifted the numbers around — on channel 14.

The companies’ representatives signed a formal agreement to merge on Wednesday morning.

The move comes only eight months after a government-led major reorganization of the television industry that broke the country’s most popular channel, Channel 2, into two competing networks run by the two production companies that had previously split the channel between them: Reshet and Keshet. The move was explained by officials at the time as necessary to ensure competition amid the overwhelming ratings dominance of Channel 2.

Financial troubles are not a new experience for Channel 10, which has faced the threat of closure since 2014 over lackluster ratings and low advertising revenues.

The Reshet-Channel 10 merger comes amid rising financial losses for both companies that could reach into the hundreds of millions of shekels annually and that officials have pinned on the relatively small Israeli viewing market failing to support three commercial channels. If the merger is approved by regulators, the commercial television landscape will again be dominated by just two channels.

The main public broadcasting television channel, once known as Channel 1, was also reorganized over the past year under the new public broadcaster, renamed Kan. It continues to trail far behind in the ratings.

Hebrew-language media reports said that Reshet will control 60 percent of the new company, while Channel 10 owner RGE will control 40%. In terms of entertainment content, Reshet’s shows will dominate the lineup, while Channel 10’s news operation will be picked up by the new channel.

Keshet, the new company’s leading competitor on Channel 12, will become sole owner of the Hadashot news network currently shared by Reshet and Keshet.

“The merger of Reshet 13, which has expertise in content, formats and reality [TV], and Channel 10, which has expertise in news, current events and documentary, will allow the merged company to operate in a stable fashion and offer the Israeli public better television,” read the letter from the two companies to the Antitrust Authority, according to the business daily The Marker.

The reorganization of Israel’s media landscape in recent years has also been accompanied by police graft probes of Prime Minister Benjamin Netanyahu, who was suspected of receiving gifts from billionaire Arnon Milchan, one of the owners of Channel 10, in order to allegedly influence his decisions about the channel’s future. Netanyahu served as communications minister, Israel’s top media regulator, from November 2014 to February 2017.

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