The Antitrust Authority yesterday approved the deal for content group RGE's takeover of Channel 10. Antitrust Authority director David Gilo believes that there is no reason to fear any damage to competition, and approved the deal without any restrictive conditions. At the same time, sources inform "Globes" that implementation of the deal is not a certainty, after the Council for Cable and Satellite Broadcasting notified RGE that becoming the controlling shareholder in Channel 10 , combined with its continued control of all the channels it produces for Hot Telecommunication Systems Ltd. (TASE: HOT.B1) and DBS Satellite Services (1998) Ltd. (YES), created a legal problem.
In response to the announcement by the Council for Cable and Satellite Broadcasting, RGE said that it did not accept the Council's position, and that if the Council continued adhering to it, it would withdraw from the Channel 10 deal.
RGE, which is currently completing its acquisition of 51% of the shares in Channel 10, is owned by Len Blavatnik, Aviv Giladi, and the Recanati family, and is managed by CEO Mudi Friedman. The company produces and operates seven channels on cable and satellite television, including the Children's Channel and five sports channels under the "Sport 5" label.
Under the cable television laws, as soon as a company becomes the controlling shareholder in a broadcast channel, it is not allowed to own more than 10% of the channels shared by cable and satellite television - in other words, the channels that are broadcast on both platforms. This means RGE is not allowed to produce more than three channels broadcast by both Hot and Yes.
According to RGE, its main reason for entering the deal is the synergy with all its content assets, and the acquisition of Channel 10 is only possible under this model. The chairman of the Council for Cable and Satellite Broadcasting is therefore looking for a way of dealing with the legal situation that has emerged in order to avoid scuppering Channel 10's rescue.
Published by Globes [online], Israel business news - www.globes-online.com - on June 25, 2015
© Copyright of Globes Publisher Itonut (1983) Ltd. 2015