One of Israel’s largest commercial television channels announced Monday that it was calling off an expected merger with another major channel, accusing the country’s regulator of failing to approve the deal in a timely manner.
The shareholders for the Reshet and Channel 10 networks in June asked for permission to merge — amid rising financial losses for both companies — effectively reversing the breakup of ratings powerhouse Channel 2 last year. It was formally approved by the Antitrust Authority in August.
But the Second Authority for Television and Radio, an authority established by the Knesset in 1990 and tasked with regulating and supervising commercial channels and broadcasts in Israel, didn’t immediately approve the step, and instead launched a hearing on the matter.
Reshet’s shareholders said Monday that since that process was likely to take months, it was calling off the merger and returning to its “full-time work plan.”
“A company can’t operate for long when shrouded in uncertainty, especially a television channel which has to plan future productions,” the shareholders said in a statement.
“In light of the delays and foot-dragging by the Second Authority… and without having heard any positive reaction from it about the move… the Authority’s conduct can only mean it is thwarting the merger,” the shareholders said.
The statement said the company was forced to take that drastic step even though it still believes merging is the right move.
The shareholders added that Reshet’s board of directors would convene in the coming days to formally cancel the merger and formulate plans for the next few years.
Reshet broadcasts on channel 13, and Channel 10 — named before a reorganization shifted the numbers around — on channel 14.
The merger plan came only eight months after a government-led major reorganization of the television industry that broke Israel’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 initiative came 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.