A small café in Ra’anana has in recent weeks become a focal point as far as television channel Reshet 13 is concerned. CEO Emiliano Calemzuk has held meetings there, moves that led to the agreement with the workers on removing Channel 13 News CEO Yulia Shamalov-Berkovich took place there, and some of the seeds of the surprising move announced last Wednesday night, whereby businessperson Ofer Yannay became a shareholder in the channel, were sown there.
That may sound anecdotal, but Ra’anana is the scene of business connections that are currently driving the battered television channel. Calemzuk, Yannay, and Oshrat Kamhazi, who has been acquiring influence in the company, all live there. So does former prime minister Naftali Bennett, who used to employ Matan Sidi, the communications consultant expected to be appointed to the Reshet 13 board as Yannay’s representative, but more of that anon.
Energy, basketball, and now television
Ofer Yannay controls renewable energy company OY Nofar Energy (TASE: NOFR), which operates in Israel, the US, and Europe. The company was floated in 2021 at a valuation of NIS 1.6 billion, and now has a market cap of NIS 3.3 billion. The investment in Nofar turned Yannay, who was educated in religious Zionist institutions, into a wealthy man, and stimulated his appetite for further ventures. On the agenda are businesses with a high public profile that require a smidgen of innovative thought. Such was the acquisition of a 51% stake in the Hapoel Tel Aviv basketball club a year ago, and the investment in Reshet, 10% with an option for more, also comes into that category.
Why is it happening? Channel 13 has for years suffered from both a financial crisis and an identity crisis. It’s not just the sluggish ratings. It’s also a severe management crisis, with frequent changes in management personnel both at Reshet and at Channel 13 News. The current management now faces a demand by controlling shareholder Len Blavatnik to implement a downsizing program, after he has injected some NIS 100 million into the channel in the past year alone, according to a court deposition. To this was recently added the fiasco of the appointment of Yulia Shamalov-Berkovich as CEO of Channel 13 News, which led to stiff opposition by the employees on the grounds that she lacked relevant journalistic experience, and out of fear of political domination (Shamalov-Berkovich was a member of Knesset for the Kadima party and later joined Likud).
It was precisely the identity crisis and the management shock at Reshet and Channel 13 News that gave Yannay the opening to come in. He has a golden opportunity at a media company dealing with difficult problems.
Yannay should bring some encouragement, and cash, with Blavatnik unwilling to put his hand in his pocket again. According to estimates by industry sources, the investment in the channel is at a valuation of $80-100 million, which would mean that Yannay invested about $8 million (NIS 30 million). There are also higher estimates in the market, which talk of a valuation of $100-120 million, putting Yanay’s investment at NIS 40 million at the top end. That’s a substantial amount of cash, but by itself it won’t avert the need for a streamlining program at the company. And that’s not the only news that the channel’s employees won’t like.
"With 10% Yannay won’t really have influence
During the Shamalov-Berkovich episode, several of the channel’s journalists were hoping that it would be sold to Palo Alto Networks founder Nir Zuk, a person of decidedly left-wing political views, matching the political profile of most of the journalists. "Blavatnik is looking for someone who will carry the burden with him," an industry source told "Globes". "Not many people would be prepared to fill that role, and then Yannay turns up for him. Someone who sells just 10% doesn’t really want to sell the channel."
For his part, Yannay is closer to the right of the political map, and was recently reported by media and journalism magazine "The Seventh Eye" to have made a substantial donation to right-wing website Midah. His spokesperson, Matan Sidi, considered one of the most brilliant professionals in the field, was for years a confidant of and spokesperson for Naftali Bennett, another figure in the religious Zionist camp who lives in Ra’anana, and about whom there are rumors that he is about to return to Israeli politics. Yannay’s associates say that he has never met Bennett or talked to him.
When it comes to politics, there are those who try to play down the connections. "Political involvement is probably a marginal consideration. It doesn’t seem to be the main aim of the decision. With 10% of the shares in the channel, Yannay can’t really exert influence," a senior communications market source says.
Will the shareholder’s appetite grow?
So what is Yannay’s interest? In recent years, the up and coming businessperson has put time and energy into developing new businesses, leveraging the capital he has accumulated and looking to acquire influence, certainly in places where he identifies an opportunity to introduce innovative thinking. The agreement signed with Reshet also reflects Yannay’s belief in synergy between media and sport. Among other things it stipulates that Reshet 13 will broadcast games of the Hapoel Tel Aviv basketball club, which Yannay owns, alongside future cooperation with international sports broadcasting giant DAZN, owned by Blavatnik’s Access Industries.
Furthermore, the assessment in the industry is that the collaboration holds out the possibility of further initiatives in the sports market, among them setting up a new dedicated channel, and there’s no doubt that Yannay sees that too: the huge potential of the connection with Blavatnik, certainly in the sports market. "There’s no doubt that the decision has great business significance. For a businessperson who lives in Israel and whose center of activity is here, controlling a slice of a television channel is worth a great deal of money," industry sources say.
The current structure of the holdings in Channel 13 is as follows: Blavatnik’s Access Industries holds 52%; Discovery holds 21%; Nadav Topolski holds 13.5%; Udi Angel holds 8%; and the Strauss family holds 5.5%. Now, after Yannay buys 10%, the other shareholders will be diluted accordingly.
Yannay is seen on the market as someone who, when the time comes, will be able to inject cash as necessary, and who will then demand a greater stake in the company. Although now, with 10%, Yannay can’t really introduce genuine change at the channel, if his stake grows, he could initiate moves in the media market through Reshet.
Published by Globes, Israel business news - en.globes.co.il - on September 15, 2024.
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