A spectre is haunting the Israeli press. It has reddish hair and expensive suits, owns some of the most luxurious hotels in the world, has influence in the corridors of power and, most importantly, the deepest pockets in town.
In July 2007, Sheldon Adelson made local media barons and journalists tremble when he launched a free week-day Israeli newspaper, Israel Hayom. Adelson is a US-based casino magnate whose fortune in 2008 (before the recession) placed him at the top of the list of wealthiest Jews in the world. He is a well-known philanthropist and donor to Jewish institutions here and abroad and is also known to be a confidante and backer of Prime Minister Benjamin Netanyahu.
Indeed, the owners of the country’s national paid-for newspapers had reason to believe that Adelson was simply using Israel Hayom to help Netanyahu win this year’s elections. And once the elections were over, they hoped, their agony would end too and the 76-year-old billionaire would return to his estate in Las Vegas.
Adelson, it seems, had a different plan in mind: and one that threatens the existence of the paid-for press. Over the course of this year, he has made Israel Hayom the second largest newspaper in Israel in terms of circulation and taken a 25 per cent share of the national newspaper readership. Distributed mainly in train stations, Israel Hayom, according to all accounts, is not yet a profitable business, and Adelson channels millions of dollars into it, which is still just a small slice of his fortune. Its progress could hardly have come at a worse time for Israeli newspapers struggling to survive the economic crisis and dwindling advertising budgets.
But then came another body blow to the old barons when, in November, Adelson launched into the weekend market. Starting with 100,000 copies, the print run grew to 150,000 within two weeks, and then to 250,000 copies after another two weeks. And in addition to distribution at stations, the newspaper is now delivered free to people’s homes.
The barons are trying to fight back. If they don’t, 2010 could well be a dramatic year for newspapers in Israel, because two of them – Maariv and Haaretz – are in danger of closing down. So on 16 December, a group of MPs proposed a law which would bar individuals who do not hold Israeli citizenship from owning a newspaper. The law would also mandate that the controlling interest in a newspaper is held by an Israeli citizen who is a resident of the country. That would effectively put pay to Adelson.
“Owning a newspaper is not like owning a toothpaste factory,” says Daniel Ben Simon, a former Haaretz journalist and now a member of parliament, who is one of the initiators of the new law. “Journalism has a role in a democratic country and letting an outsider, who made his money in casinos, take over this sensitive industry would be a mistake.”
Ben Simon, needless to say, is a member of Labour, and not of Netanyahu’s Likud party. Indeed, the initiative seems less occupied with defending democracy and more with a fear of Adelson.
“The new law is not reasonable,” says Dvorit Shargal, who runs the independent media monitoring blog Velvet Underground. “All newspaper owners have financial and other interests. The real problem might be that the Hebrew reading market is relatively small, and it cannot sustain all these papers.”
While the free paper model has experienced difficulties in many markets (such as London), in Israel it has the potential to create dramatic headlines in 2010. Who will be left standing in 12 months is far from clear.