Wiz CEO Assaf Rappaport’s tech group to acquire Israeli broadcaster Reshet 13
Tech-backed Merit Spread Foundation, which will replace a proposed takeover by telecom tycoon Patrick Drahi, plans to invest about $120 million in the struggling broadcaster.
The Merit Spread Foundation, backed by a group of high-tech entrepreneurs led by Wiz co-founder Assaf Rappaport, is acquiring control of TV station Reshet 13 from Len Blavatnik. Access Industries, through which Blavatnik owns the channel, announced the agreement on Friday.
Merit’s entry will replace a group of investors led by businessman Patrick Drahi, whose attempt to acquire control of the network ran into regulatory difficulties.
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A group led by Assaf Rappaport will be acquiring control of Reshet 13 from Len Blavatnik.
(Photo: Omer Hacohen, Eric Piermont/AFP)
Alongside Assaf Rappaport, the high-tech group includes entrepreneurs from Wix, Monday.com, Riskified, and other technology companies. All of the entrepreneurs are transferring their funds as a donation to the Merit Foundation, which was established as a public benefit corporation. The foundation will hold the shares and control of the channel, while the tech entrepreneurs themselves will not have direct or indirect control over the channel.
“They are making an impact investment here,” a statement from the investor group said. “This is not a story about controlling shareholders, and they do not want conflicts of interest or any other kinds of competing interests. They want the channel to serve the entire Israeli public. The investment is being made through the Merit Foundation so that it will not be perceived as Assaf Rappaport’s channel, or anyone else’s channel within the group. The foundation will manage the channel to help ensure diversity in Israeli media.”
The Reshet 13 Press Union welcomed the deal.
“The agreement in principle signed with them today not only ensures the stability of the channel and News 13, but also creates an unprecedented growth engine in technology and management that can return our organization to its rightful place in the television market,” the union’s chairman, Matan Hodorov, wrote to employees.
“This is an unprecedented expression of confidence in us as workers, in Israeli journalism, and in the future that lies ahead. It represents the greatest opportunity in our history after years of crises.”
“Rappaport, who made history as one of Israel’s most successful high-tech entrepreneurs, is now doing something unimaginable again, mobilizing to turn Channel 13 into a successful and prosperous company, one that we employees will be prouder than ever to belong to. We are confident that following Assaf, many outstanding and diverse figures will soon join the channel - investors, managers and journalists from across the Israeli spectrum - who will want to take part in the success story we are building together.”
According to Access, Merit’s investment will help secure the channel’s future and enable expanded investment in content and accelerated digital transformation. Merit is expected to become the controlling shareholder, while Access Industries and Warner Bros. Discovery (WBD) will remain minority shareholders.
“We are delighted with this significant step toward completing the deal,” the high-tech group said in a statement. “The acquisition of Reshet 13 by the Merit Spread Foundation ensures the channel’s future and its full editorial independence. Through Merit, we are providing resources on a scale never before seen in an Israeli television channel, with the aim of leading digital innovation and establishing a unifying, Zionist and Israeli consensus. Israeli citizens deserve an independent, patriotic and strong channel. We are proud to support the Merit Foundation in providing exceptional resources to the channel, ensuring that Reshet 13 will be a home for every Israeli.”
Access Industries President Danny Cohen added: “We are proud of the path that Reshet 13 has taken in recent years and believe that the new partnership will support the channel’s continued development. I would like to thank Len Blavatnik for his unwavering support of Reshet 13 and its people. We wish our partners great success and are confident they will lead the channel into its next phase of growth.”
The agreement with Merit and the group of technology investors comes just a month after Drahi had reached an agreement to enter the channel as an investor. However, that deal was considered problematic due to potential cross-ownership conflicts and competition concerns, as Drahi controls HOT and the international news channel i24.
Regulatory concerns intensified after details of Drahi’s proposed agreement became public. The plan included the possibility of collaborating with i24 to provide current affairs content for the channel, a move that could have replaced content produced by Reshet 13’s news division and potentially required significant cuts to its operations.
Drahi’s proposal also included a plan to provide an $80 million loan to Reshet 13 even before receiving regulatory approval for the investment.
About a week and a half ago, the Israel Competition Authority rejected Reshet’s request to receive the loan from Drahi. The following day, Drahi announced the addition of two investors to his group: American hedge fund manager John Paulson and French media personality Jacques(“Arthur”) Essebag.
With the addition of the new investors, Reshet submitted a revised application to the Competition Authority requesting approval for an 80 million shekel loan, to be provided equally by Drahi, Paulson and Essebag.
However, the Competition Authority rejected that request as well.
Less than a day later, the agreement with the technology-backed Merit group was announced.
The new deal is expected to face significantly fewer regulatory obstacles, as it does not involve cross-ownership in Israeli media markets and brings investors with substantial financial backing into the network.
Rappaport, whose cybersecurity company Wiz completed a $32 billion acquisition by Google this week, is among the most prominent figures backing the initiative.
According to previous reports, the tech investors plan to inject about $120 million into Reshet 13 over the next three years to strengthen its operations and accelerate its digital transformation.
