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Newspaper Innovation
The latest casualty of foreign capital in Israel's media market: The free paper Israeli. |
For the second time in a year, a joint Israeli-overseas media investment has been in the courts. Both times, Israeli courts have ruled in favor of local owners.
The latest flap is over Israeli -- a free, metro-style paper less than a year old that seemed to be gaining traction with readers and advertisers (judging by more pages and higher-quality ads). Its circulation was reportedly nearing 200,000, and it had begun printing a second edition.
However, according to this Jan. 21 Haaretz story, Israeli's publishers dropped the afternoon edition. They'd run out of money.
As in other countries (such as China and the U.S.) this free paper is distributed by hawkers at train and bus stations. It received a quick and early redesign from it's original "international" look to a more, well, Israeli presentation: lots of large, loud and colorful headlines on the cover.
The business news site Globes reports that Israeli's co-owner Moshe Ben-Tzvi was ruled the paper's owner over his ostensible partner, billionaire and casino owner Sheldon Adelson. Adelson had sued with the claim that Ben-Tzvi had skimmed money from Israeli to cover costs at his two weekly newspapers. Workers from Israeli joined in Adelson's suit.
The ruling in Ben-Tzvi's favor may be pyrrhic. Israeli didn't publish this morning, and was reported to be losing $700,000 per month. Newspaper Innovation speculates that Israeli may reemerge in the same or a different form. I wouldn't bet against a free daily doing well in Israel: Israelis are voracious newspaper readers and news junkies.
It may not be Adelson's last shot at an Israel-based paper, either. Haaretz reported last fall that Adelson was in "advanced" talks to buy Maariv, the struggling "second" tabloid in Israel. According to the article, Maariv reported a second-quarter 2006 loss of about $5 million -- compared to a slender profit of less than $100,000 in the previous year's second quarter. I don't put a great deal of faith in this report, however. Israeli media are notorious for over-writing and under-reporting business transactions.
This all sounds a bit familiar. Last year, CBC reported that CanWest Global Communications Corp. -- one of Canada's largest media companies -- lost its fight with a onetime Israeli partner over ownership of the Jerusalem Post.
That story didn't even mention the travails of disgraced media barons Conrad Black and Robert Maxwell, both of whom had troubles in the Israeli media business.
The moral: Israel may be too rough even for the hardest-edged media moguls.
UPDATE: Newspaper Innovation reports: "The free daily Israeli rose from the ashes of a dispute between its
owners only one day (January 22) after it was closed down. As long as
the case is in court, the paper will have only one daily edition and
will be financed by Ben-Zvi’s Hirsch Media."
