Ha’aretz interviews Asper on the future of the Jerusalem Post

March 14, 2005

[Note by Tom Gross]

This is an update to the dispatches: The struggle for control of "The Jerusalem Post heats up" (February 1, 2005), and Jerusalem Post co-owners now go to court in two continents (February 14, 2005).

Many European and north American journalists on this email list have expressed interest in this matter. I therefore attach a further article on the future of the Jerusalem Post, which carries the thoughts of CanWest controlling shareholder Leonard Asper.

Previous articles on this issue on this email list have come from the Canadian press and from the Israeli business daily Globes. This is the first time that rival paper Ha'aretz has carried a relatively long article on the sale of the Jerusalem Post. I attach extracts first for those who don't have time to read the piece in full.

 



EXTRACTS

"It was a mistake to do business with Eli Azur" (By Hadar Horesh, Ha'aretz, March 7, 2005)

"I have no intention of making changes in The Jerusalem Post. The paper as it is now is a good newspaper," says Leonard Asper, in an exclusive interview with Ha'aretz. Asper, 40, is the controlling shareholder in the Canadian media giant CanWest Global Communications Corp. In 2000, CanWest acquired most of the Hollinger International newspaper network. Last year, CanWest also purchased the Jerusalem Post from Hollinger, but a legal battle over control of the newspaper erupted between Asper and his partner in the acquisition of the paper, businessman Eli Azur, the head of Mirkaei Tikshoret.

It is not clear what exactly transpired between Asper and Azur during the last few months of 2004. Asper says that he was sure that he was about to buy The Jerusalem Post from Hollinger, in equal partnership with Azur, a young and energetic Israeli businessman who came with references from well-known banks. The partnership appeared surprising: Azur, a veteran of commercial street fights on the margins of the media world, was making his first foray into big business's major leagues.

But in the end, Azur wound up with total ownership of The Jerusalem Post, while Asper went to court alleging that Azur had violated the agreement to work toward joint acquisition. Asper's associates suspect that Azur had discovered the newspaper's great business potential, particularly the value of its real estate assets, and decided to get out of the agreement. Azur's associates say that Asper has far-reaching plans to change the paper's editorial policy and replace the editor. Asper believes that a public battle will help him get back in the deal, while Azur prefers to have his say in court.

... CanWest was founded by his late father, Israel (Izzy) Asper, a tax attorney who began to acquire television stations in 1974, first in his home town of Winnipeg, Manitoba, then all over Canada. Later, the Asper empire spread to television and radio stations in Australia and New Zealand as well. In the 1990s, CanWest tried to get into the South American market, acquiring a television station in Chile, but then pulled out and sold its businesses there.

The company bid for one of the [Israeli] Channel 2 franchises in 1994 but didn't win. Ten years later, businessman Yossi Maiman tried to interest the Aspers in investing in [Israeli news] Channel 10, to replace his partners who had abandoned the company.

... Although the sale of the Post for $13.2 million is not among the largest transactions that have been carried out recently in Israel, it is still more than five times as much as tycoon Haim Saban invested in Channel 2. The amount is similar to the sum that Arnon Milchan plans to invest in Channel 10 shares.

... Asper says he was loath to bring the transaction to the courts. He has ambitious plans for the Jerusalem Post. "It has to be a strong international brand name, like Apple and Coca-Cola, through which we will be able to present the facts about Israel and to fight anti-Semitism and anti-Israel propaganda," he says.

He rejects the idea that it would be a propaganda tool: "We are only planning to bring the precise and objective facts to public attention, against the false propaganda of those who are anti-Israel."

... A strong pro-Israel line dominates the opinion pages of the media outlets controlled by the Asper family, and occasionally the family funds the production of films and investigations designed to support Israeli public relations. Asper media produced a film that was screened here on Channel 1 and was designed to refute allegations made in the pro-Palestinian film "Jenin, Jenin."

Azur says that one reason for the dispute is Asper's desire to give the newspaper an extreme right-wing orientation. Asper denies this, saying that he is not opposed to a critical press. "The role of the press is to transmit information and to open people's eyes. The job of the journalist is to present the facts in an objective manner, and not to camouflage his opinions as fact. There is room for criticism and for expressing opinions, but within the context designed for this purpose - the editorial page," he says...

 


FULL ARTICLE

"IT WAS A MISTAKE TO DO BUSINESS WITH ELI AZUR"

"It was a mistake to do business with Eli Azur"
By Hadar Horesh
Ha'aretz
March 7, 2005

www.haaretz.com/hasen/spages/548663.html

"I have no intention of making changes in The Jerusalem Post. The paper as it is now is a good newspaper, and I like it very much," says Leonard Asper, in an exclusive interview with Haaretz. Asper, 40, is the controlling shareholder in the Canadian media giant CanWest Global Communications Corp. In 2000, CanWest acquired most of the Hollinger International newspaper network. Last year, CanWest also purchased the Jerusalem Post from Hollinger, but a legal battle over control of the newspaper erupted between Asper and his partner in the acquisition of the paper, businessman Eli Azur, the head of Mirkaei Tikshoret.

It is not clear what exactly transpired between Asper and Azur during the last few months of 2004. Asper says that he was sure that he was about to buy The Jerusalem Post from Hollinger, in equal partnership with Azur, a young and energetic Israeli businessman who came with references from well-known banks. The partnership appeared surprising: Azur, a veteran of commercial street fights on the margins of the media world, was making his first foray into big business's major leagues.

But in the end, Azur wound up with total ownership of The Jerusalem Post, while Asper went to court alleging that Azur had violated the agreement to work toward joint acquisition. Asper's associates suspect that Azur had discovered the newspaper's great business potential, particularly the value of its real estate assets, and decided to get out of the agreement. Azur's associates say that Asper has far-reaching plans to change the paper's editorial policy and replace the editor. Asper believes that a public battle will help him get back in the deal, while Azur prefers to have his say in court.

Asper speaks little Hebrew, "bar mitzvah Hebrew," as he puts it. His favorite sport is Canada's national sport, ice hockey, and he dreams of establishing a team in Israel. He knows all about the fine skating rink in Metula, and is a proud fan of the Israeli bobsled team.

CanWest was founded by his late father, Israel (Izzy) Asper, a tax attorney who began to acquire television stations in 1974, first in his home town of Winnipeg, Manitoba, then all over Canada. Later, the Asper empire spread to television and radio stations in Australia and New Zealand as well. In the 1990s, CanWest tried to get into the South American market, acquiring a television station in Chile, but then pulled out and sold its businesses there.

The company bid for one of the Channel 2 franchises in 1994 but didn't win. Ten years later, businessman Yossi Maiman tried to interest the Aspers in investing in Channel 10, to replace his partners who had abandoned the company. "The business plan didn't suit us," said Asper over the weekend. The Aspers aren't participating either in the race of foreign businessmen to invest in Channel 2 on the eve of the tender that is taking place now. "We were focused on The Jerusalem Post deal," says Asper.

Although the sale of the Post for $13.2 million is not among the largest transactions that have been carried out recently in Israel, it is still more than five times as much as tycoon Haim Saban invested in Channel 2. The amount is similar to the sum that Arnon Milchan plans to invest in Channel 10 shares.

"People I knew in Canada introduced us," says Asper of Azur, "and told me that he's all right. It was a mistake to do business with him. He can decide that he doesn't want the partnership with us, but that doesn't give him the right to kick us out of the transaction. Now I'm told that it's his usual business behavior, to quarrel with partners."

Their future relationship is being discussed in court. The partnership agreement was not implemented. Azur acquired The Jerusalem Post on his own, an investment of $13.2 million, which was funded by a loan from Bank Leumi. CanWest sued Azur in New York, saying that according to the agreement between them, any dispute would be adjudicated in an American court. Azur is suing CanWest in the Jerusalem District Court for damages.

Asper says he was loath to bring the transaction to the courts. He has ambitious plans for the newspaper. "It has to be a strong international brand name, like Apple and Coca-Cola, through which we will be able to present the facts about Israel and to fight anti-Semitism and anti-Israel propaganda," he says.

He rejects the idea that it would be a propaganda tool: "We are only planning to bring the precise and objective facts to public attention, against the false propaganda of those who are anti-Israel."

An enthusiastic Zionist

The Aspers have always been enthusiastic Zionists. The founder, the elder Asper, was a great fan of Menachem Begin. Asper does not deny his connections with Finance Minister Benjamin Netanyahu, but insists that the family supports the Israeli government of the day, regardless of its political identity. "We support the government and the efforts to bring peace that will make Israel safe and will bring economic prosperity," he says.

A strong pro-Israel line dominates the opinion pages of the media outlets controlled by the family, and occasionally the family funds the production of films and investigations designed to support Israeli public relations. Asper media produced a film that was screened here on Channel 1 and was designed to refute allegations made in the pro-Palestinian film "Jenin, Jenin."

Azur says that one reason for the dispute is Asper's desire to give the newspaper an extreme right-wing orientation. Asper denies this, saying that he is not opposed to a critical press. "The role of the press is to transmit information and to open people's eyes. The job of the journalist is to present the facts in an objective manner, and not to camouflage his opinions as fact. There is room for criticism and for expressing opinions, but within the context designed for this purpose - the editorial page," he says.

He believes in the printed word

The acquisitions of the Hollinger newspaper network and The Jerusalem Post appear contrary to accepted business wisdom that the printed word is in retreat, if not on the verge of extinction. "I believe in the future of the printed word, and primarily if it is seen as inseparable from other means of communication, such as the Internet. The distribution of information will continue and it doesn't matter whether it's in print or via the Internet or through information on the cellular phone. The Jerusalem Post is a very strong news brand name that can reach people by any method. The newspapers will be able to continue to flourish as long as they are focused on the consumer and know how to identify the needs of their audience," says Asper.

He says he sees investment in Israel as a business opportunity, and also a way of strengthening Israel in addition to his charitable activities. The family has long given to educational institutions, and the father, Israel, was on the board of trustees of the Hebrew University of Jerusalem. The family also donates to community centers in Israel's periphery.

Asper says that he will continue to seek investments in Israel, mainly in media. "It may be that we will once again look into an investment in Channel 10. I think that there are good opportunities in the area of infrastructure. The investment in the Trans-Israel Highway was successful, although we were not involved in it, but we may be interested in similar investments in the future."

The legal dispute between Asper and Azur

The dispute between Eli Azur and the Canadian company CanWest broke out in January 2005, when CanWest asked the courts in New York to arbitrate between the company and Azur and to prohibit him from carrying out certain business activities at The Jerusalem Post until the arbitration process has been completed.

CanWest says that Azur ignored an agreement for joint acquisition of the shares of The Jerusalem Post according to which CanWest and Mirkaei Tikshoret, controlled by Azur, were supposed to each hold half of the paper's shares.

Shortly after CanWest turned to the courts in New York, Azur petitioned the Jerusalem District Court with a request for a declarative ruling to the effect that Mirkaei Tikshoret is the sole owner of the newspaper. In his petition, Azur says that CanWest is trying to change the editorial policy of the newspaper. Azur is now working to bring in new partners to the newspaper, and has signed an agreement to sell 31 percent of the shares to Yaakov Bardugo, former director of the Mifal Hapayis national lottery.


Eli Azur replies:

"There has never been an agreement signed between us and CanWest, and CanWest never invested a single dollar in the purchase of The Jerusalem Post. In light of the legal proceedings taking place on the matter, we are not interested in elaborating on our response or in answering other complaints raised by Asper."


All notes and summaries copyright © Tom Gross. All rights reserved.