Israeli Regulator Approves Sale of Channel 13 to Merit Fund Backed by Waze Founders

Israel's Second Authority for Television and Radio has approved the sale of controlling interest in Channel 13 to the Merit Fund, a public benefit company, funded by Waze founders Assaf Rappaport and Ynon Costica. This decision concludes a prolonged and complex business and media saga, which notably included an unprecedented government decision to disregard a Supreme Court ruling on the matter.

Channel 13 CEO Idan Alrum stated that the approval marks a historic milestone, signaling a transition from struggle to growth and innovation. He emphasized the new ownership's commitment to accelerating development plans and providing viewers with a higher quality, more relevant, and diverse viewing alternative, with a focus on content, digital platforms, and journalistic endeavors.

The Second Authority's council conducted a thorough review of the deal, examining ownership structure, funding sources, and the buyers' ability to maintain the channel's operations while safeguarding public interest and independence. As part of the approval, the council mandated transparency regarding funding, conditions for future donors, and strengthened the channel's independence by broadening decision-making circles within Merit.

The Merit Fund will provide guarantees for investments in local content creation and establish a significant financial cushion. The deal's financiers are set to inject $120 million into the channel over three years through Merit. Council Chairman Mordechai Mordechai affirmed that the approval prioritized the public interest and the broadcaster's independence.

The sale to Merit follows the collapse of a previous deal with businessman Patrick Drahi due to cross-ownership restrictions. The government had attempted to facilitate the Drahi deal and later to thwart the Merit deal, including passing legislation to remove cross-ownership limitations, though its implementation was frozen by the Supreme Court. Controversial appointments to the Second Authority council, perceived as politically motivated, led to legal challenges and a Supreme Court order preventing the council from convening. This created a regulatory vacuum, temporarily granting powers to the previous council, but a subsequent wave of resignations from that body effectively neutralized it.

Despite government attempts to disregard Supreme Court rulings concerning the council's composition and decisions, the regulatory approval from the Second Authority is sufficient to finalize the deal. Channel 13 management considers the transaction complete, with Merit now holding controlling interest and the ability to appoint directors. The channel views this as the end of its survival phase and the beginning of an era focused on expansion and development, with the new ownership promising significant investment in content, digital platforms, and investigative journalism.

Merit expressed its belief in the importance of free, independent, and quality Israeli media, aiming to make Channel 13 the leading, boldest, and most innovative media entity in Israel. The Journalists' Union at Channel 13 welcomed the deal, expressing hope for a new era of growth and confidence that the new owners will prioritize the channel's employees and professional advancement.