In his youth, Nadav Topolski, chairperson of Israeli television channel Reshet 13 and a shareholder in it (13.5%), played basketball for his high school team at The Hebrew Reali School of Haifa. On one occasion, his team was playing in Hungary against players from Croatia, Hungary, and Italy - all of them much taller than the Israeli players.
Despite that disadvantage, the Israeli coach made clear to his average-height players that winning was their only option. "None of us became a professional basketballer, but we were a superb team, and we took the championship. When you’re a teenager and someone talks to you like that, it makes you determined."
The sense of determination instilled in him then, together with the example at home of a father with his own business who even worked at weekends, and combat service in the Paratroopers Brigade Reconnaissance Unit, enabled him later on to complete what looked like the mission of his life: the merger "in no time" between Reshet and Channel 10, both of them loss making outfits.
Today, the combined company, Reshet 13, is not only profitable, but is also backed by leading international shareholders, such as Len Blavatnik’s Access Industries and Warner Bros. Discovery, Inc., the second biggest media company in the world, which just over a year ago bought 21% of the channel. "It was really, really hard, and I’ve done some hard things in my life," says Topolski today, in a first and exclusive interview.
Len Blavatnik credit: Tim Bishop
Len Blavatnik credit: Tim Bishop
What was so tough about it?
"In the real world, when you gear up for a merger, it’s a process that takes months. We signed, and broadcast the same day. Ultimately, 10 and 13 (meaning Reshet) are not much alike. It’s actually three companies: Channel 10, Channel 10 News, and Channel 13. Try merging those three, and good luck with it. Even if there had been plenty of time to prepare, it would still have been a challenging task."
After completing the merger, putting the company on a profitable track, and appointing new people to head the channel - CEO Yoram Altman, and VP Content Meir Kotler - he is readying for the next stage, in which Reshet 13 will turn from a broadcasting channel operating in Israel into a global media company. "There’s no reason that it shouldn’t do that," he says, "given its staff, its management, and its shareholders."
Blavatnik’s challenge
In jeans, a casual shirt, and a backpack, Topolski is a very long way from what you might imagine. He came to know Blavatnik when he studied on a Blavatnik Fellowship at Harvard University.
He came there pretty much by chance. After studying economics and computer science at the University of Haifa, he went to work at Rafael Advanced Defense Systems. After three years there, he decided to join his then life partner, who studied at Berkeley in California. He got into Harvard thanks to the fellowship.
To this day, he says, he has no idea what Blavatnik’s criteria were for awarding a fellowship, but he assumes that it had to do with him being an Israeli. "Len is a warm and smart Jew and Zionist," Topolski says. "He gave me a fellowship to study, and that could have been the end of the story. But he told me ‘You have an open line to me.’ When people of his stature tell you things like that, you don’t treat it seriously, but he was absolutely serious.
"On my birthday, he took me out to dinner. This is a person for whom the Jewish people and the state are indescribably dear to his heart. I had never met anyone like that, with such impressive achievements in business and such rare intuition."
At the end of his studies, and continuing the connection he maintained with Blavatnik, he started to work at Access Industries, Blavatnik’s New York-based holding company. At the same time, he started to work at the chemicals company that Blavatnik had acquired shortly beforehand, LyondellBasell. "That was my school," he says. "It was the first time I had worked overseas, with that kind of work mode, processes, thinking."
It was during that period that he met his wife, Michal, who worked at a New York law firm, and after eighteen months he decided to branch out independently, with Blavatnik’s blessing. In 2010, he moved to London, from where he enlisted European investors for projects he led in Africa. In 2016, when his son Lenny was born, the decision was made to return to Israel.
Once more, the employment opportunity came through Blavatnik, with whom he kept in touch the whole time. "He’s a very informal person, not someone who goes around with an entourage of 40 people," Topolski says. "He told me about the sports channel (RGE, in which Blavatnik was a partner with Oudi Recanati and Aviv Giladi, H.M.) and about Channel 10 and its big losses, and talked about the fact that he was the only one injecting cash, and asked that I should try to help."
That was in 2018, and Topolski was enthused by the idea of going into a new field. "It sounds like fun. It’s a challenge and it’s intriguing, so let’s go. I returned to Israel, landed straight into a Channel 10 board meeting, and started work."
Shut down a channel? Not an option
At that time, Channel 10 was hemorrhaging, and according to Topolski there were two possibilities: one was to shut it down; the other was to merge. "Shutting down was not an option as far as I was concerned. To lay people off is to fail. On the other hand, the second option, a merger with Reshet - there were people at the channel who had tried and not succeeded."
He decided to try where others had failed, and met 13’s shareholders, Udi Angel and the late Michael Strauss. "The meeting was wonderful," he recalls.
There was a chemistry.
"It was much more than that. Within five minutes I managed to create trust between us."
But for all the trust, it was no picnic. "There were many fronts to deal with, and very little time. The first front was the shareholders in RGE (which held 51% of Channel 10), and we instituted a process whereby RGE eventually exited from its ownership of the channel. A second front was vis-à-vis the shareholders in Reshet.
"Thirdly, there were all the regulators, headed by the The Second Authority for Television and Radio, which said: ‘I’m against the merger. Won’t happen. Let it be shut down.’ And fourthly, the Competition Authority, which I can fully understand. Allowing the merger is not a simple decision for it; I don’t underestimate their difficulty, but I have no time, there’s no money, and there are the News Company’s employees, and a CEO and workers and families. I’m under hellish pressure.
"But as far as I’m concerned, there’s no way we’re going to fail. No possibility. We’ll make it happen. It might sound a bit pompous, but if we had arrived at a situation in which there was only one news channel (that of Channel 12, H.M.), that would have been disastrous for Israeli democracy. That mustn’t happen, and that’s a good reason to strive hard."
What happened there in the end? After all, the merger was supposed to take place through Reshet acquiring you, but in the event it was the other way around.
""In any merger there’s a dynamic. You set out, and in the end the two sides have to make their calculations and reach a result. We thought that 10 would have a lower percentage than 13 in the way the merger would be carried out, but when we did due diligence, it became clear that it was necessary to inject a lot of cash. But I don’t want it to sound as though it was aggressive on our part; it was completely by consent. To this day, my relationship with Udi Angel is excellent."
How much did Blavatnik eventually put in?
"More than NIS 100 million, but that’s not the important thing. It doesn’t really matter whether we put in 112 or 144. What’s important is that there was great willingness on the part of one shareholder to make it work, and that willingness has not ceased to this day. He has invested a great deal of money, hundreds of millions."
"I didn’t get answers"
After the merger went into effect, the second stage of Topolski’s mission was to stabilize the combined company financially. Reshet ended the first year in the merged format with losses, and for Topolski that was a glitch.
"The Israeli market can’t accommodate three players in commercial broadcasting, but two, yes. So, after the merger, there was no reason that we should lose money, but we lost, and not a small amount. Besides that, it makes no sense that there should be no plans in the first year about what comes next, so we had to make the changes in order to bring the company to a position of financial stability."
What was the main reason for the losses?
"I don’t want to talk about people, but I can tell you that we at Access, and I personally, ask questions, and when we don’t get answers, we ask again, and when we still don’t get answers, we understand that there’s a decision to be made.
"I’m a person of strong opinions, but I think that I’m very empathetic. As soon as I realize, and the board realizes, that we’re not getting answers, something has to be done.
"Over the past few years, I’ve made some difficult, unpopular decisions, and I’ve been subject to very considerable criticism, because replacing people in senior positions is no small matter. The media is a business of strong passions, with a great deal of ego. Extremely serious people sit on our board of directors. There’s a guy called Danny Cohen, who was the youngest ever director of BBC Television. He knows a thing or two about television.
"Take Jamie Cooke, who joined a year ago as the representative of Warner Discovery. This is an extremely senior person, who has managed dozens of channels, and has been in the industry for decades. These are very sharp people, for whom the good of Reshet is more important than anything. In the end, there’s an organism called the board of directors, and you’re accountable to it."
david zaslav. credit: Warner Bros. Discovery
David Zaslav credit: Warner Bros. Discovery
The streaming threat
The questions and answers thing is understandable, but when it starts to be a behavior pattern - firing one CEO, Golan Yochpaz, and then his replacement, Yossi Warshawsky, and then a third firing, of Israel Twito, and after that Avi Ben-Tal - it doesn’t sound quite so clever, especially considering that Ben-Tal made the company profitable. How do you explain it?
"First of all, I received a management. I received people. I didn’t choose them."
Some of them you did.
"Forget the people for a moment. When two channels with such different cultures merge, there will have to be changes. Secondly, there are people who are suitable at one period of the business, but not all at another stage.
"There are three stages: Stage one is the merger of two loss-making companies; the second stage is bringing them to a position in which they don’t make losses; and the third stage is putting them in a position to grow. Even you will agree with me that there’s no getting away from it, it requires different people.
"We made the required replacements, stages one and two happened, and now there’s a wonderful management for the third stage. Look at the results test. Had you said: ‘You replace people but the results aren’t good…’"
Yoram Altman credit: Noa Nir
Yoram Altman credit: Noa Nir
We don’t know what the results will be, they have only just taken up the job. But we do know that Ben-Tal brought good results and was still replaced.
"Yoram (Altman, the new CEO) knows Reshet and the board intimately. He’s an entrepreneur to his very soul, who founded a company called Gravity. He’s older, and I see that as a huge advantage. That white hair helps a lot."
That’s the kind of CEO that the channel needs now, an entrepreneur?
"Not just. Today there are two broadcasting channels, 12 and 13. We know that the rate of television viewing is steadily declining, and the younger you go, the worse it gets. We’re also seeing streamers coming into Israel, and they are the threats that we face. They’re my hardest problem. We’ll continue to compete with 12, but that’s not where the problem lies.
"When you look at the advertising market, which most of our profit rests on, it’s a NIS 4.5 billion market, of which NIS 1.5 billion is in television. The international bunch comes along (referring to Netflix etc. H.M.) and takes part of the revenue away from me. In this situation, the regulator could do more to maintain the broadcasters, because we have the news, and the time has come for him to treat us better."
Partnership with Discovery
Topolski hopes to overcome this development thanks to, among other things, Warner Bros. Discovery, headed by David Zaslav, "one of the most important media people in the world."
What is there for Discovery at Reshet?
"Three things. First of all, there’s a great deal of creativity here, which is a growth engine. Secondly, this is a business that is starting to make profits, so from the returns point of view it makes sense. The third reason, in my view, is that from WarnerMedia’s point of view too, the partnership with Access is interesting. I’m happy about it, because this is the first time that someone has come along and said: I believe in the people leading this business, and I’m prepared to be a partner.
"Today, we’re at the stage of thinking how we can leverage these partnerships to improve content, technology, and distribution. We realized that it requires someone who has vision and an entrepreneurial spirit, capable of harnessing the people around him to go with him, and so we appointed Kotler VP Content."
Another appointment that led to raised eyebrows.
"I’m glad, because people are accustomed to very conventional decisions, but in the end, as soon as you have people with so much experience…"
Experience in what? He’s an actors’ agent.
"That’s his official title. Was, by the way. But beyond that, this is someone who reads scripts, who represents directors. Do you know what has happened here since he joined? In the past, there were no production companies that came to work with Reshet, and today they all want to work with us.
"The combination of Yoram, with his open and accepting approach, and Kotler, who is the most his own man of anyone I’ve met in my life, together with Ofir Rabinovich, who came from Yes, gives a great deal of confidence that we’ll be capable of leveraging our assets for the next stage. For a business to succeed, it has to have a good product, a serious digital presence."
You’re not there.
"Our digital presence isn’t good enough. In video, we’re number one, but in other places we need to be much better."
How does Discovery fit in?
"They have a representative on the board, and there are groups of Discovery people and Reshet people, who discuss everything between them. This is not a strategic partner who puts down the money and leaves, but a partner from the industry, the owner of HBO, Max, CNN. If we have an idea now for a format or an investigative program, and I have Kotler’s counterpart whom I can call, that’s not theoretical. These things are already happening, even though the merger took place just a moment ago."
Are there also thoughts of collaborating with commercial entities, as there is at Keshet?
"Media for equity? We have that kind of thing. These models, from experience around the world, haven’t succeeded very well. For something like that to succeed, the investment has to be in accordance with a valuation, and there has to be synergy, for it to bring traffic."
Does Keshet’s streaming service, FREETV, bother you?
"All competition bothers me, but I have to think of the right way of playing the OTT game. You can’t detach it from the cost of living - how many streamers can people afford? FREETV will compete with Yes, Partner, Hot, Disney, Netflix. It’s becoming problematic. Reshet is in a very comfortable position both because we’re very sought after by the media outfits and because of our international partners."
Necessary layoffs
To return to internal matters: the dismissal of Yochpaz, a generally respected journalistic figure, as witness his recent appointment as CEO of the Israeli Public Broadcasting Corporation, was received at the time with utter dismay the News Company, leading to a meeting between Topolski and the company’s senior journalists.
At the meeting, as it was described in the press, Topolski told the news company journalists that no-one recognized them outside the channel. "That’s simply not true," is Topolski’s response to the way it was reported. "I’m sorry to refute another urban legend. What happened was that I felt that, at least internally, I had to come along and explain the layoffs. Incidentally, it was at the journalists’ request.
"I sat by myself with no-one beside me, with ten journalists whom I’d never met in my life, and simply explained to them why I thought the move was correct. The person I spoke about was Nadav Eyal, and I meant to illustrate the fact that they needed to be known directly. It was absolutely not intended as a put down, but rather to give them a lift. I talked about what had led to the decision, and we had a pleasant conversation. I said to them: Ask, and I’ll explain."
Did you feel that it fell on attentive ears?
"They talked to me, I asked questions, I was as open as could be. If there’s a group of A-listers like them, can I sling mud at them? It doesn’t work that way. I was all ears in that conversation, and the proof is in the results test. After the meeting, the whole saga ended."
About a year later, some 40 journalists and editors at the News Company were fired, some of them known for their critical stance towards the prime minister at the time, Benjamin Netanyahu. In protest against the firings, employees of the company came to the lobby of the building in which Topolski lives, and distributed flyers to his neighbors setting out what he had done. "As soon as people are laid off it’s really sad, I have a great deal of empathy, but I think that some kind of red line was crossed here," Topolski says.
Looking back, was it absolutely necessary, or could these layoffs have been avoided?
"There was no choice. Incidentally, the numbers that were bandied about (claiming a 35% cut in the News Company’s Budget, H.M.) are nowhere near reality. They were much lower. In any case, the person who ultimately decided whom to fire was the CEO of the News Company, no-on else."
It’s very convenient to hide behind claims like that: it’s not me, it’s him.
"I’m not hiding, I take responsibility, but not for the identity of the people. The News Channel has a budget that we set, and it’s not supposed to make losses. In the end, it’s a company, and it can’t rely on cash injections from the shareholders all the time. No-one wants to be in a company like that. The place we’ve got to, where no cash injections are required, is great place to be - it’s good for the advertising companies, for the production companies, for everyone, and sometimes a price has to be paid. Is it simple? No. When people are laid off, it’s the most terrible thing there is."
At the time there was a report by Yaron Zelekha that stated that there was no economic justification for the massive layoffs.
"Any two points you give me, I can draw a line between them with some story."
So what are the facts? Are the report’s conclusions wrong?
"I know the bank account, the income and the expenses, so let him come and explain to me that what I see in the bank account isn’t correct."
What do you have to say about the image of bias towards Netanyahu that 10 News has acquired in the past year?
"The News Company has a CEO, Aviram Elad. He is the sole decision maker about content, reporters, and editors, and no-one else besides him has a hand in it. The people who cast aspersions about the independence of the genuinely excellent journalists at the News Company are simply mistaken. I would wish every journalist shareholders such as Reshet 13 has when it comes to lack of interference."
They say of you that you don’t allow the CEOs that you appoint complete independence, that you’re very hands on.
"I’m not an interfering person, but I am a very involved person. My formal and business obligation is to ask questions. I represent the shareholders, I’m also a shareholder myself, and I’m also chairman. So if I don’t ask questions and am not involved, I’m not doing my job. We have standards, I’ve told you who’s on our board, and as long as we don’t receive answers, we’ll continue to ask questions."
Is there any move that you instigated at the company where, in retrospect, you would have acted otherwise in the circumstances?
"I don’t think there’s any one move I made that I regret. I can say that I should have done some of the things differently."
Such as?
"The dismissal of Golan Yochpaz. I hold him in very high regard. I thought that you don’t fire CEOs; with CEOs, you come to an understanding, and I knew that if we looked for someone to replace him, it would get abroad. I said that I would talk to him first; I didn’t pay attention to the fact that it was just before a holiday. It was bad. You don’t do a thing like that."
What about his appointment as CEO of the Israeli Public Broadcasting Corporation? A bit of a poke in the eye?
"I don’t work in those terms. I genuinely only see what’s good for Reshet."
When you look at Reshet 13’s broadcast schedule, it seems to have no guiding principle. It’s a kind of patchwork, and perhaps because of that you don’t have the flow that can be seen at Keshet.
"That’s a little strange, because our flow is very similar to Keshet’s."
I mean that with you, people don’t flow from program to program, and so your rating only consists of peaks.
"We are seeing improvement, but I don’t suggest that people should rejoice at what happens with Big Brother, just as they shouldn’t get gloomy over something that doesn’t succeed. The improvement can be seen at weekends, at prime time, in late night programming, and I’m convinced that with the content people we have today, the flow will be much better."
Where will Reshet be five years from now?
"Reshet will expand its presence beyond being a strong Israeli broadcaster with a news company to being at least a regional media player, if not a global one."
Published by Globes, Israel business news - en.globes.co.il - on September 23, 2022.
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