French-Israeli tycoon Patrick Drahi is reorganizing. In a few short weeks, Drahi will complete a maneuver centered in France, but also having consequences for the local media market, that will make him a significant factor in the French content market. International television network i24news, which broadcasts from the Jaffa coast in Israel, is becoming an arm of the media company founded by Drahi in France, whose other arms includes a series of acquisitions led by Drahi since the end of last year, among them French daily Liberation and weekly magazine L'Express.
The French media have been preparing for Drahi's entry since the beginning of last year. His emergence as a dominant figure in the local communications market has put his competitors at a disadvantage, especially the controlling shareholders in the Le Monde group, who have also been in the midst of an intensive campaign of acquisitions in the print media in recent months. A report recently appeared in the L'Observateur magazine purportedly dealing with events in the editorial offices of i24news and criticizing the human relations there. Drahi's group regarded the report as part of the struggles that he will be part of as a result of his reinvention as a media tycoon.
Sources in Israel and France say that i24news was the appetizer that enticed Drahi into the content and media field. Becoming known to the Israeli public only after acquiring control of Hot Telecommunication Systems Ltd. (TASE: HOT.B1) in 2009, his choice of i24news and Hot Telecommunications was not random. Drahi is taking his initial steps in the field at a time when the print media are shriveling throughout the world. On the one hand, he is acquiring the strongly leftist-socialist Liberation, and on the other hand L'Express, identified with the French conservative right. This ideological division, his associates say, shows that his intentions are purely economic. His critics say that this is Drahi's way of buying influence on politicians in all parts of the French political spectrum.
Creating new opponents
Drahi has more than a few opponents in Israel and France, and as he extends his grip into new areas, in addition to his considerable control in the mobile and infrastructure sectors in France, he is acquiring new ones. These opponents told "Globes" that his main objective, especially in the acquisition of the stagnating Liberation (101,000 copies daily in 2013, and the figure has since dropped) was the same as for many other tycoons showing a sudden interest in the world of media: prestige and ego. Drahi enjoys his frequent meetings with politicians and the doors likely to be opened for him.
Drahi's associates completely reject these statements. Other than the acquisition of L'Express, the economic viability of which is disputed by no one, they say that the pioneering of the prestigious Liberation in the digital field and the publication's website are the main reason for his acquisition. The day is not far off, in fact it will be in the next few weeks, when reports from the pages of Liberation and L'Express will begin appearing on the French-language channel of i24news, and this content sharing will also save money for the editorial offices in Israel.
Global leaders, including French President Francois Hollande, German Chancellor Angela Merkel, and Israeli Prime Minister Benjamin Netanyahu, who marched in Paris in January in protest of the terrorist attacks in France, saw at the side of the street on which the march took place a giant sign promoting the French i24news channel. This took place about the time of Drahi's series of acquisitions, and linked him to French media figure Marc Laufer in the establishment of Mag&NewsCo, a new media group, a subsidiary of Drahi's Altice Media company.
Laufer, whose media holdings over the years have been mainly in the professional business and economic press, invested in the acquisition of Liberation together with Drahi. The presence of a businessman in the mainstream media sector helps Drahi in declaring that he has no intention of failing. Drahi, who also led in triple telecommunications packages, and is a great believer in 360-degree integration, including infrastructure, content, Internet, and mobile, must establish his presence through the television screen. Accordingly, in recent weeks, a quiet process of change in the French-language i24news channel has begun.
The channel, headed by CEO Frank Malul, whom Drahi persuaded to immigrate to Israel in order to manage the international operation, appointed a new money man several week ago - Patrick Cohen. Coming together with him to Israel for a period of only three months was known French-Jewish media figure Paul Amar, who was appointed temporary head of the French desk. Amar was charged with carrying out a thorough reform that would change the broadcasts from Israel to appeal more to a French audience, not necessarily the Jewish audience already accustomed to watching the channel. As part of this reform, his task included developing formats for new programs and hosting suitable for the French viewer.
Besides the saving in personnel resulting from the integration of content from the mainstream French media, the idea behind putting the international Israeli French-language channel under Drahi's new umbrella is to make it possible to purchase cross-platform advertising packages, so that major French advertisers will be able to buy and receive presence on the screen and in the magazine and daily press.
Waiting for news from the Ministry of Communications
The i24news network went on the air on July 17, 2013, broadcasting in English and Arabic, in addition to French. The channel is available to one billion households around the world through cable and satellite television, although the vast majority obviously does not watch the channel. It is admired mainly by members of the European Jewish community, and is gaining ground in African and Middle Eastern countries. Drahi, of course, wants much more than this, and another channel is being mentioned - in Spanish, and even in Farsi, to communicate with the Iranian public.
With all due respect to the peoples of the world who are more or less hostile to us, however, Drahi wants influence in two principal areas: France and Israel. Opinions have recently been heard saying that Drahi is unhappy with the network's financial situation, and that he is urging economic cost-cutting. His associates reject these claims. Sources say that Drahi has invested tens of millions of euros in just a few months in setting up the network, apparently in a rush designed to precede his business moves in France, and is perfectly aware that he has not yet reached the stage where he is going to earn money. It was declared when the network was started that expenses would be covered and the channel would break even within five years, just like any startup. The French connection is designed to constitute the first link in the economic spine that will ensure this.
Drahi's growing power in France will unquestionably be significant for Israel. It signals that the cable television Drahi - the one that believes less in content, and hides from the media - is changing. Were he able, he would do the same thing in Israel - buy newspapers and television channels and enhance his power. In contrast to France, however, Israel's strict and overbearing regulation ties Drahi's hands.
However difficult regulation may be, it has already been proven that things can be changed. Signs of this change were already in the air during the term of outgoing Minister of Communications Gilad Erdan, who followed a clear line in seeking to put the television affairs of i24news in order. He strongly opposed the court ruling that the channel is an Israeli news channel for all intents and purposes, and must therefore meet the same criteria as the Israeli channels - a decision that in effect made it impossible to put the channel on the air in Israel.
The Netanyahu government expressed support for the broadcasting of all the network's content in Israel, and also led a clear trend towards putting more news channels on the air in Israel - even more so with respect to cable or satellite channels. Drahi's channel is the first in line to be part of Hot's broadcasts in Israel.
This, of course, requires a legislative change, and it cannot be ruled out that the next Minister of Communications will be the one to lead such a change, as part of the trend towards weakening the current communications media, Channel 2 News and Channel 10 News. Today, in contrast to the past, there is no intention of silencing them, but of simply opening the market as much as possible in order to allow other voices to be heard, so that no one is overly dominant. If this is done, Drahi's dominance will be guaranteed, through the French connection.
Published by Globes [online], Israel business news - www.globes-online.com - on April 20, 2015
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