**4.4 After 1990: Interdependence in the multi-channel period**

At the beginning of the 1990s the global communication revolution reached Israel, and the long lasting monopoly of the Public Channel was finally broken. The change began with the successful ingress of cable television in 1990. Most Israeli television viewers were for the first time given a chance to choose between various channels. The revolution continued in 1993, when, for the first time, a general commercial channel, Channel 2, joined the television

(Whannel 1992). This reciprocity was articulated by Yoash Alroii, the manager of Channel 1's sports department between 1980 and 2002: "We helped in turning Maccabi into the national team, and they turned us into the people's television." (Maariv, April 28, 2004) Miki Berkovitz, Maccabi's most famous player at the time, agrees: "Chanel 1 built itself through Maccabi, and the reputation of Maccabi was built in Chanel 1. . . . The games turned into no less than the national anthem." (Ynet, April 13, 2007). This is a classic example of symbiotic

As discussed earlier, symbiotic interdependence often leads to the creation of trust and introduces an emotional dimension into the relationship. This pattern is illustrated by a dramatic incident, described in 'Haaretz' newspaper (July 22, 2003). In December 1982, prior to one of Maccabi's matches in the European league, the team released a press announcement stating that Olsy Perry, one of the team's American players, had the flu and would not be able to attend the game. Nevertheless, a reporter from Channel 1 took a television crew with him to Perry's home. They were surprised to find the player in bed after an apparent drug overdose. However, Channel 1 managers decided to conceal the exclusive scoop. Instead of revealing the true occurrences of that evening the channel

The Perry incident was not exclusive. Dan Shilon, who was the first broadcaster of Maccabi's European matches, described in an interview how Channel 1 played a role in the team's success on the court. Shilon recalls the first broadcast of a game between Maccabi

Liege had a player named Steven Hirst, who shot remarkably from a certain spot on the court. At the day of the game Tal Brody [Maccabi's former superstar] came to us and asked that we put a spot directly above this point. We agreed, and even changed the spot's position during half time. Poor Hirst could barely score. (Maariv, April 28, 2004) In conclusion, during the 1970s and 1980s both Channel 1 and Maccabi Tel-Aviv enjoyed cooperation, which issued them both with a substantial composite rent. However, the interdependence in those years was by no means symmetric. During its monopolistic years Channel 1 enjoyed considerable structural advantages, allowing it to hold the upper hand in the alliance. The channel used its monopoly to almost completely avoid payments for broadcasting franchise. The matches received very high ratings (they were often the most highly watched program in the channel's weekly schedule) and helped the Channel to acquire legitimacy. Still, the Channel did not feel committed to compensate the team financially (as was already customary in other countries). Maccabi on its part realized that there were no alternatives. In the absence of a real competitive leverage it had no choice but to allow the broadcastings free of charge. And so, during the years of its monopoly, Channel 1 obtained an exploitive rent side by side with the composite rent it shared with the team.

At the beginning of the 1990s the global communication revolution reached Israel, and the long lasting monopoly of the Public Channel was finally broken. The change began with the successful ingress of cable television in 1990. Most Israeli television viewers were for the first time given a chance to choose between various channels. The revolution continued in 1993, when, for the first time, a general commercial channel, Channel 2, joined the television

interdependence, where both sides enjoy the alliance and profit from it.

preferred to cooperate with the team's cover-up story.

and the Belgian team Liege on November 24, 1970:

**4.4 After 1990: Interdependence in the multi-channel period** 

market. Within a short time, the ratings of the new lively Channel 2 far surpassed those of the old and jaded Channel 1 (Zuckerman 1999). During the following years, the Israeli television market continued to widen. Many additional cable channels, satellite broadcasts and a new general commercial channel (Channel 10) joined the competition.

The communication revolution has marked a new era in the broadcasting of sports events in Israel. In 1990 Channel 1 was the sole customer for the product of sports competitions in a market of many suppliers. With the launching of cable television, the television market opened to competition. One of the cables' pivotal channels was the Sports Channel, which soon demanded quality sports material. The launching of the Sports Channel brought both a quantitative (much more sport was now broadcast) and a qualitative (the broadcastings became much more professional) revolution to Israeli televised sports. Channel 1 found itself competing for contents that up to now had been free or almost free of charge, if only it chose to broadcast them. One by one it lost the broadcasting franchises of the central sports events: the Major soccer and basketball leagues, European soccer leagues, and the America basketball league (the NBA). One of the main assets to which Channel 1 chose to cling at all costs was the European matches of Maccabi Tel-Aviv's Basketball Club.

A number of factors drove the continuance of the relationship between the two sides. Maccabi Tel-Aviv on its part saw Channel 1 as a home. The team's managers viewed the alliance between the "national team" and the "national channel" as natural. Moreover, the team has always won great respect from Channel 1. The broadcasters and commentators of the games identified with the team, supported it avowedly, and refrained almost completely from criticism. The channel also considered the team's scheduling preferences, and the games were mostly scheduled for prime time broadcast slots. Furthermore, the long years of symbiotic interdependence between the two organizations facilitated the evolution of emotional relations. Still, the main consideration behind the team's decision to maintain the relation was by now a financial one. In an interview with the Israeli journal 'Status', in 1992, Shimon Mizrahi, Maccabi's chairmen, stated that the team had agreed to grant Channel 1 a broadcasting franchise for one year only, in order to retain a maneuvering potential when additional channels were launched (this was just before Channel 2 was launched). In an increasingly competitive television market Channel 1 was forced to substantially raise its compensations in order to retain the broadcasting franchise.

Despite its growing financial stringency Channel 1 was willing to increase the payments in order to maintain an asset that it viewed as a national symbol. With the emergence of the new commercial channels, Channel 1 faced growing difficulties in determining its place and duties in a multi-channel environment (Zuckerman 1999). Its managers saw the broadcasting of Maccabi Tel-Aviv's European matches as a symbol for the duties the channel should now fulfill. This perception is well articulated in the response of Channel 1's speaker, Yuval Ganur, to criticisms over the channel's massive payments to the team:

Maccabi Tel-Aviv is Israel's most successful team. Therefore, its natural home is Channel 1. There is nothing we can do about the insane sums we have to pay for the broadcastings. (Ynet, July 10, 2001; emphasis mine)

The criticism over the large payments Channel 1 transferred to Maccabi grew stronger at the beginning of the new millennium. Following a decade during which Maccabi Tel-Aviv did not enjoy a remarkable success in the premier European league, the team improved and

Symbiosis and Exploitation in Sports-Media Interrelations:

Josef Bar'el, Channel 1's general manager, replied to the critics:

emphasis mine)

1." (Ynet, April 13, 2007)

agreements." (Haaretz, September 28, 2005)

The Israeli Case of Maccabi Tel-Aviv Basketball Club and the Public Channel 351

Recognizing the failure of the alliance, Channel 10 and Maccabi untied the pact after only one year. Channel 1 was delighted to jump on the wagon, and in July 2003 it regained the yearly broadcasting franchise for Maccabi's European matches, this time for only three million dollars. This lower payment (less than half of what the channel had paid only two years earlier) was largely driven by the deep economic recession of those years. However, the new agreement still drew wide public criticism. To put things in perspective, the channel's entire budget for dramas and documentaries during that year was less than two million dollars. The critics claimed that a bankrupting public channel should not fund a professional team, and that the money could have been better spent (Haaretz, July 31, 2003).

There are only two worthy sports events: The Israeli premier soccer league and Maccabi Tel-Aviv in Europe. Every Israeli household is entitled to watch these events free of charge. It was a fatal mistake on the part of Channel 1 to give up these broadcasts. . . . Beyond the public importance of Maccabi's games, I personally have a nostalgic relation to the team. I played there in my youth and the team for me is *a symbol of Zionism; a national symbo*l. This is why I think the acquisition is necessary. (Haaretz, July 28, 2003;

Bar'el's statement was later echoed by other members of Channel 1's board of directors (many of whom were political nominations and avowed Maccabi's fans). The words visualize the channel's perception of the team's matches as an event of special importance. In these games lies the nation's spirit; broadcasting them on the national channel is the way to sustain this spirit and the channel's national relevance. The team itself is of course more than happy to play along with the national terminology. Maccabi's managers often present its success as a national mission, which must be supported by the public. In reply to the growing criticism over the Public Channel's high payments they stated that "agreements must be met. No one forced Channel 1, or anyone else for that matter, to sign these

At least on face value the team was right, and the payments for the franchise were all a matter of supply and demand. However, one must remember that both Israeli commercial channels gave up the franchise for the games only one year after they acquired it. This fact raises questions regarding the amount of competition for the broadcasting franchise. Why was Channel 1 willing to still pay such high amounts (about 4 million dollars in 2007)? Part of the answer lied in the channel's perception that in its hectic state of affairs Maccabi's matches were among the few broadcasts that still justify its existence and provide it with legitimacy. This approach was expressed in the words of the channel's temporary chairwoman, Gabriela Shalev: "This is one of the things that may allow us to sustain the public broadcasting; it attracts viewers." (Haaretz, May 9, 2006) Alex Giladi, the vice president of NBC, a leading figure in Israeli sport, and one of the initiators of the relationship between the Public Channel and Maccabi Tel-Aviv agrees. Following the decision of Channel 1 to stop broadcasting the team's European matches in 2007 he claimed that "Maccabi will survive the break, but this may be the beginning of the end for Channel

In conclusion, the end of Channel 1's monopoly in the Israeli television market brought a dramatic change to the interdependence between the channel and Maccabi Tel-Aviv.

regained its position among the European elite. Since 2000 it reached the final stages of the European league (the final four) eight times, and won the European cup three times. Following this success Maccabi demanded a substantial increase in the payments for its broadcasting franchise. Channel 1 complied, and in 2001 the channel and the team reached an agreement promising the team 14 million dollars for two years (Ynet, July 3, 2001). It should be noted that only three years earlier Channel 1 had paid only half a million dollars for the same yearly franchise (Maariv, May 25, 2001). The agreement received intense public criticism. Critics claimed that "these payments are far too large for a public sponsored channel" (Ynet, July 10, 2001). When the criticism grew stronger and reached the parliament, Channel 1 withdrew from the original contract and limited the new one to only one year, in which it paid the team 6.75 million dollars.

Maccabi's chairmen, Shimon Mizrahi, quickly responded: "I'm glad. Next year a third commercial channel is entering the competition [Channel 10], and it will probably wish to acquire some high potential assets. Who knows what I will ask for then" (Maariv, July 27, 2001). In a later interview Mizrahi added: "What are the ratings of Channel 1 anyway? What do they have except for Maccabi Tel-Aviv's broadcasts? After 32 years during which Maccabi marched hand in hand with Channel 1, there should be other ways of doing things" (Ynet, February 13, 2002). Mizrahi's words shed light on the way in which he was the interdependence between the team and Channel 1 in the beginning of the new millennium. In light of the television market's expansion and the team's European success, tradition and reputation, Mizrahi now saw the team's dependence on Channel 1 as quite minor, while the channel's dependence on the team was perceived to be very high. This perceived power of the team vis-à-vis Channel 1 has turned the tables. Instead of Channel 1 enjoying an exploitive rent together with the composite rent it was now the team that enjoys both worlds.

In 2002 another new player entered the picture, the commercial Channel 10. Following a slow start, the channel looked for ways to break into the Israeli television market and bought the franchise for Maccabi's European matches for 4.5 million dollars. Channel 1, suffering from financial difficulties and heavily criticized for its moves, could not compete with the offer, and so, for only the second time in almost 40 years, Maccabi Tel-Aviv's European games were broadcast on another channel. But the broadcasts on Channel 10 were unsuccessful. The ratings were relatively low and Channel 10 did not manage to use the broadcasts as leverage to reach wider audiences (Yediot Ahronot, July 14, 2003). The combination between a less attractive Maccabi team in the 2002-2003 Season and a new and unfamiliar channel in a saturated television market drove the new alliance to failure.

This failure crystallizes the fragile nature of inter-organizational symbiosis. Once the delicate relationship that was built up for decades had been shattered, both sides suffered. Romo and Schwartz (1995) report a very similar chain of events in their study on the migration of manufacturing plants in Long Island, New York. The authors found that core industries, which had the upper hand in the local economy and moved to another place with a better cost structure, discovered following the move that the symbiosis (which in that case took the form of an innovative dynamic) was gone. Even though the new deals significantly reduced supplier costs, they came with a substantial price—the loss of symbiotic rent. Hence, the symbiotic benefits of an alliance coexist with the exploitative practices described above. This complex relationship can not be simplistically characterized as either just symbiosis or only exploitation.

regained its position among the European elite. Since 2000 it reached the final stages of the European league (the final four) eight times, and won the European cup three times. Following this success Maccabi demanded a substantial increase in the payments for its broadcasting franchise. Channel 1 complied, and in 2001 the channel and the team reached an agreement promising the team 14 million dollars for two years (Ynet, July 3, 2001). It should be noted that only three years earlier Channel 1 had paid only half a million dollars for the same yearly franchise (Maariv, May 25, 2001). The agreement received intense public criticism. Critics claimed that "these payments are far too large for a public sponsored channel" (Ynet, July 10, 2001). When the criticism grew stronger and reached the parliament, Channel 1 withdrew from the original contract and limited the new one to only one year, in

Maccabi's chairmen, Shimon Mizrahi, quickly responded: "I'm glad. Next year a third commercial channel is entering the competition [Channel 10], and it will probably wish to acquire some high potential assets. Who knows what I will ask for then" (Maariv, July 27, 2001). In a later interview Mizrahi added: "What are the ratings of Channel 1 anyway? What do they have except for Maccabi Tel-Aviv's broadcasts? After 32 years during which Maccabi marched hand in hand with Channel 1, there should be other ways of doing things" (Ynet, February 13, 2002). Mizrahi's words shed light on the way in which he was the interdependence between the team and Channel 1 in the beginning of the new millennium. In light of the television market's expansion and the team's European success, tradition and reputation, Mizrahi now saw the team's dependence on Channel 1 as quite minor, while the channel's dependence on the team was perceived to be very high. This perceived power of the team vis-à-vis Channel 1 has turned the tables. Instead of Channel 1 enjoying an exploitive

rent together with the composite rent it was now the team that enjoys both worlds.

unfamiliar channel in a saturated television market drove the new alliance to failure.

This failure crystallizes the fragile nature of inter-organizational symbiosis. Once the delicate relationship that was built up for decades had been shattered, both sides suffered. Romo and Schwartz (1995) report a very similar chain of events in their study on the migration of manufacturing plants in Long Island, New York. The authors found that core industries, which had the upper hand in the local economy and moved to another place with a better cost structure, discovered following the move that the symbiosis (which in that case took the form of an innovative dynamic) was gone. Even though the new deals significantly reduced supplier costs, they came with a substantial price—the loss of symbiotic rent. Hence, the symbiotic benefits of an alliance coexist with the exploitative practices described above. This complex relationship can not be simplistically characterized

In 2002 another new player entered the picture, the commercial Channel 10. Following a slow start, the channel looked for ways to break into the Israeli television market and bought the franchise for Maccabi's European matches for 4.5 million dollars. Channel 1, suffering from financial difficulties and heavily criticized for its moves, could not compete with the offer, and so, for only the second time in almost 40 years, Maccabi Tel-Aviv's European games were broadcast on another channel. But the broadcasts on Channel 10 were unsuccessful. The ratings were relatively low and Channel 10 did not manage to use the broadcasts as leverage to reach wider audiences (Yediot Ahronot, July 14, 2003). The combination between a less attractive Maccabi team in the 2002-2003 Season and a new and

which it paid the team 6.75 million dollars.

as either just symbiosis or only exploitation.

Recognizing the failure of the alliance, Channel 10 and Maccabi untied the pact after only one year. Channel 1 was delighted to jump on the wagon, and in July 2003 it regained the yearly broadcasting franchise for Maccabi's European matches, this time for only three million dollars. This lower payment (less than half of what the channel had paid only two years earlier) was largely driven by the deep economic recession of those years. However, the new agreement still drew wide public criticism. To put things in perspective, the channel's entire budget for dramas and documentaries during that year was less than two million dollars. The critics claimed that a bankrupting public channel should not fund a professional team, and that the money could have been better spent (Haaretz, July 31, 2003). Josef Bar'el, Channel 1's general manager, replied to the critics:

There are only two worthy sports events: The Israeli premier soccer league and Maccabi Tel-Aviv in Europe. Every Israeli household is entitled to watch these events free of charge. It was a fatal mistake on the part of Channel 1 to give up these broadcasts. . . . Beyond the public importance of Maccabi's games, I personally have a nostalgic relation to the team. I played there in my youth and the team for me is *a symbol of Zionism; a national symbo*l. This is why I think the acquisition is necessary. (Haaretz, July 28, 2003; emphasis mine)

Bar'el's statement was later echoed by other members of Channel 1's board of directors (many of whom were political nominations and avowed Maccabi's fans). The words visualize the channel's perception of the team's matches as an event of special importance. In these games lies the nation's spirit; broadcasting them on the national channel is the way to sustain this spirit and the channel's national relevance. The team itself is of course more than happy to play along with the national terminology. Maccabi's managers often present its success as a national mission, which must be supported by the public. In reply to the growing criticism over the Public Channel's high payments they stated that "agreements must be met. No one forced Channel 1, or anyone else for that matter, to sign these agreements." (Haaretz, September 28, 2005)

At least on face value the team was right, and the payments for the franchise were all a matter of supply and demand. However, one must remember that both Israeli commercial channels gave up the franchise for the games only one year after they acquired it. This fact raises questions regarding the amount of competition for the broadcasting franchise. Why was Channel 1 willing to still pay such high amounts (about 4 million dollars in 2007)? Part of the answer lied in the channel's perception that in its hectic state of affairs Maccabi's matches were among the few broadcasts that still justify its existence and provide it with legitimacy. This approach was expressed in the words of the channel's temporary chairwoman, Gabriela Shalev: "This is one of the things that may allow us to sustain the public broadcasting; it attracts viewers." (Haaretz, May 9, 2006) Alex Giladi, the vice president of NBC, a leading figure in Israeli sport, and one of the initiators of the relationship between the Public Channel and Maccabi Tel-Aviv agrees. Following the decision of Channel 1 to stop broadcasting the team's European matches in 2007 he claimed that "Maccabi will survive the break, but this may be the beginning of the end for Channel 1." (Ynet, April 13, 2007)

In conclusion, the end of Channel 1's monopoly in the Israeli television market brought a dramatic change to the interdependence between the channel and Maccabi Tel-Aviv.

Symbiosis and Exploitation in Sports-Media Interrelations:

the sports-media relationship along the years.

expensive sports stadiums, established and funded by taxpayers.

would move to another city.

The Israeli Case of Maccabi Tel-Aviv Basketball Club and the Public Channel 353

NBA, and NHL) and American media. Similarly to previous research (e.g. Wenner 1989; Lever & Wheeler 1993; Koppett 1994; Williams 1994; Weingerten 2003) they talk about the symbiotic dimensions of this relationship and the mutual gains for both sports and media organizations in terms of revenues, popularity, and legitimacy. Yet, Quirk and Fort also notice the changing nature of power relations and exploitation, which have characterized

One prominent example comes from American Football. Until 1962, the National Football League (NFL) was operating under a court injunction, forbidding it from signing a leaguewide national TV contract. The fourteen teams had to separately negotiate and sign their TV contracts, and the TV networks used this to avoid high payments. When a new bill exempting league-wide television contracts from antitrust prosecution passed in 1962, the NFL became the sole negotiator of TV broadcasting rights. Consequently, the total TV income of all NFL teams rose sharply, from \$3.5 million in 1961 to \$16.2 million in 1964. While this initial increase may be explained with the underpayments by TV networks prior to the 1962 bill, broadcasting rights contracts have continued to increase dramatically ever since. By the end of the 1990s, the NFL, a monopoly in its field, has demanded (and received) TV contracts in the sum of more than two billion dollars per year. The national TV networks (CBS, NBC, ABC, Fox), however, all suffer from this monopolistic market. They all report enormous losses on their NFL contracts. The highly competitive environment and the fact that there is only one product to fight for, lead, according to Quirk and Fort, to excessive biddings, which are exploited by the NFL to acquire what I termed here an exploitive rent. Quirk and Fort further examine the relationships between the major leagues and other prominent actors in their environment: fans, unions, players and cities. Once again, they show how these relationships provide the parties involved with a synergetic composite rent. For example, cities which host a successful professional sport franchise acquire reputation and publicity, while also providing their residents with a source of entertainment and local identification. Franchises, on their part, enjoy financial support, devoted fans, and new

However, Quirk and Fort also demonstrate the exploitative dimension of this relationship. They contend that during the years, with ample support from the US government, the major leagues gradually turned into monopolies in their respective fields. With monopoly came enormous power, which the leagues now use to exploit and manipulate smaller cities. These smaller cities often see the sport team as a necessary resource for maintaining local reputation, and are therefore willing to do almost anything to retain the franchise. Under the threat of uprooting to another city and market, the franchises use their monopolistic power to demand conditions that would promise increased revenues, while imposing crushing financial hardships on cities that are already strapped with debt. Most notably, team owners demand that the cities provide publicly financed stadiums and arenas, or else the team

I argue that this combination of symbiosis/exploitation is not unique to the media and sports nexus or to the sports field in general. Rather, it is a common part of organizational interdependencies, which are seldom simplex. Organizational interrelations are often characterized by symbiotic interdependence, where cooperation and trust exist, and both sides share a composite rent. This pattern, however, exists side by side with some degree of

Whereas during the monopolistic era the team depended on the channel completely and was forced to give up any demand for significant compensations, the tables have now turned. In the post-monopolistic era Channel 1's dependence on the team became immense. As a result, the team could demand that the channel compensate it generously, regardless of the channel's grave economic condition and the mild market demand for the games.
