Sale of Channel 13 to government critic approved; minister calls decision ‘unlawful’

The Second Authority Council, Israel’s commercial broadcasting regulatory body, approved on Wednesday the purchase of Channel 13 by the Merit Spread Foundation philanthropic group, funded by a group of tech entrepreneurs led by Wiz co-founder Assaf Rappaport.

The sale of Channel 13, one of the few dominant commercial broadcasters in Israel, has been at the center of a political imbroglio due to the government’s opposition to the sale, apparently owing to Rappaport’s outspoken criticism of the government, first over its judicial overhaul agenda and then over its handling of efforts to release the hostages held by Hamas in Gaza.

Communications Minister Shlomo Karhi described the approval of the sale as “unlawful,” noting that the government has “already determined that the decisions and outcomes of the unlawful council’s actions will be retroactively voided.”

The Likud minister said the investors had “gambled their money on a wild goose chase,” adding, “The risk is on you.”

The government in July vowed to reject a decision by the Second Authority Council on the matter, even though the High Court of Justice had explicitly authorized the body to make the decision. That sparked concerns of a constitutional crisis, which may now re-emerge.

The government does not, however, actually wield any power over the Second Authority since it is an independent statutory body, so it is unclear how Karhi or the government at large can influence the Channel 13 acquisition.

The Merit Foundation, backed by Rappaport, is taking control of Channel 13 from billionaire Len Blavatnik’s Access Entertainment. The channel has faced severe financial difficulties.

Once the deal is completed, Access Entertainment is expected to remain a shareholder in the TV station.

Danny Cohen, president of Access Entertainment, welcomed the sale and expressed hope that Channel 13 will now “continue to grow, strengthen its position in the Israeli media landscape, and build on its commitment to delivering high-quality, diverse and relevant content to viewers across Israel.”

A contentious process

Approval of the sale of Channel 13 became a highly charged political and legal issue due to the government’s opposition to Merit. The matter became even more contentious following an intervention by the High Court of Justice aimed at blocking what appeared to be unlawful efforts by Karhi to stymie the sale.

In March, Karhi made a series of controversial appointments to the Second Authority Council, which critics said were designed to thwart the purchase of Channel 13.

The High Court of Justice froze the appointments in May while it evaluated the case. When Karhi apparently orchestrated a series of resignations from the outgoing council to deny it its legally mandated 10-person quorum and thereby prevent it from approving the sale, the High Court issued a controversial decision saying the resignations would not be taken into account when considering the quorum.

This decision enabled the Second Authority Council, which currently has just seven members, to decide on the sale of Channel 13 to Rappaport, and paved the way for Wednesday’s authorization.

But in an unprecedented step, the government in July issued a cabinet resolution saying it would not respect a decision taken by the council under the terms of the High Court ruling, essentially rejecting the ruling.

The court fight has continued since then. Just last week, the High Court annulled three of Karhi’s appointments for a new council, and ordered all the other appointments made in March to be reviewed, leaving the outgoing seven-member council in place until that time.