Yaron Zelekha, News 13 (Wikipedia, freepik)
“Network management presented employees with a manipulative snapshot of the company’s financial data. Its revenues and cash flow do not justify or explain the dramatic cut in the news company, which will cause irreparable damage to it. If the move comes to fruition, there is a threat of creating a news 12 monopoly in the telecommunications industry, with the other two players in the market competing for crumbs only, “says Professor Yaron Zelicha, who last week joined News 13’s fight in cuts that the network would put on the company.
Zelekha wrote a special opinion on the state of the network for the workers ‘committee and the journalists’ organization, based on data provided to him by the channel’s management last week, according to the Labor Court’s directive. In the light of this, a labor dispute between the employees and the management over an expected cut of 35% in the news company budget, despite a collective agreement signed between the employees and the management and is valid until this July.
Question marks about data reporting
According to Zelekha, the data transmitted by a network to employees reveals tapping and tapping. The figures are inconsistent with the way in which accepted accounting rules define cash flow reporting, and not for the Labor Court to intervene to clarify them. The fact that the network refused to disclose data on its expenses also raises questions.
Two assumptions based on the cut-off network plan, in Zelekh’s view, represent low-risk, low-probability scenarios, in his view: the first is that no more cash flow will occur from shareholders, and the second is that the channel will not receive a state guarantee loan like other major businesses hit during the crisis.
Zelekha doubts the network’s cutbacks, including downloading news programs like Five With Yaakov Elon, which have a relatively low production cost. In addition, Zelekha mentions that News 13 has recently reduced about 12% of its budget, cleared the studios in the Rose House, integrated control personnel in a networking studio at the soldier’s level, and cut a temporary cut in the wages of workers earning over NIS 10,000 a month.
pit? What pit?
Zelichka also claims that the deficit data and loss forecasts presented by a dramatic and inflated network. Responding to the channel’s claim of a significant drop in its revenue, Zelekha states that the picture obtained from comparing the first quarter of 2020 to the same period last year is very different from the huge “pit” presented to the committee by the network, and does not justify cutting the proposed volume or similar.
He claims that given the recovery in the economy and the advertising market, the company’s outlook for a dramatic fall in revenues by the end of the year seems excessive – and in any case, there is no justification to cut a 35% of the company’s budget already, which will cause irreparable damage.
He also adds that the cut in the news company budget will severely hamper the market share of the central edition, thus negatively affecting network revenue itself. The company’s management’s expectation of continuing similar ratings figures in the post-cut era, he says, is a dream in Aspemia, because at the end of the cut, News 13 will compete for viewing crumbs in front of 11 here, while the market will create a news 12 monopoly.
Zelekha states that the network is not exempt from investing NIS 67 million a year in the news company, by law. However, despite its claims that its revenues in 2020 are not expected to exceed the “floor” set by the law of NIS 426 million. “I was amazed by this claim, which is not backed by the past data provided by the Network and the perceived trend in the advertising market,” he writes, but due to the confidentiality agreement signed by Zelekha, he is not allowed to specify the exact amounts.
For the solution
The solutions offered by Zichita to a network situation include a recommendation to consider changing the channel’s economic model, whereby instead of purchasing expensive entertainment content, whose return on investment is possible as a result of high ratings and prosperity in the advertising market, the possibility of being based on news production products that are cheap will be explored. Significantly.
He argues that, even if such a model leads to some impairment in ratings and advertising revenue, it is expected to yield dramatic savings in spending, making investment in Channel 13 less risky for shareholders.
Zelekha criticizes the existing strategy, in which the channel makes a living from both entertainment and news concurrently, in a way that increases its expenses on the one hand, emphasizing management’s duplication, and, on the other, reduces its chances of separating from Channel 12 and creating a business identity that expresses the merger with “News 10.
In conclusion, Zelekha writes: “I am convinced that if management can see the workers’ committee as part of a recovery process and not just an input, then Channel 13 and its prospects of well being in its current format will be better. I recommend that Network develop a joint streamlining plan with the committee, based on transparency and partnership, as opposed to unilateral “landings”. As the economic adviser of the workers, I would be happy to make myself available to them as much as needed to achieve it. ”
Network 13 commented: “Despite their trendy presentation, Network 13 does not conduct media dialogue but directly with the news company.”
