Sheldon Adelson has already bought a politician: Israel’s Prime Minister Netanyahu

Newt Gingrich’s South Carolina primary victory has brought onto the spotlight his campaign’s main benefactor, Sheldon Adelson. Relatively to his wealth and the manner in which he has acquired it, Adelson has managed to stay away from the limelight – despite his quoted bragging of being “The world’s richest Jew” (he’s not, btw; but his wealth is currently estimated at >$20B).

Because of this relative obscurity, Adelson’s political exploits in Israel remain unexplored. Robert Scheer might wonder about the details of the “business” transaction between magnate Adelson and candidate Gingrich. For a casino billionnaire, it is amusing to see Adelson put his pocket change ($10M and counting) on such long odds. His bet in the Israeli scene has been much larger – yet far safer and more successful. Well, over there you can apparently buy the entire gambling house. NYT laconically tells us that

Over time, Mr. Adelson made his conservative views felt not only within the committee, but also in Israel. He started a free daily newspaper in 2007, Israel Hayom, that is widely viewed as supportive of Prime Minister Benjamin Netanyahu, a close friend who shares his hawkish outlook.

Can you taste the sugar(coating)? Ah, the wonderful world of NYT, where every story on Israel must present that country in a respectable light – lest angry mobs burn down the house. This is yet another case, where the reality is so much more fun than its sanitized NYT version.

Adelson’s investment in Israel Hayom far exceeds his Gingrich bets. But perhaps “investment” should be understood in the metaphorical sense, because it doesn’t appear there’s a chance to ever make money with a daily-issue sale price of (0). This business article (Hebrew link) estimates that Adelson had lost NIS 250M ($70M) on the paper in 2007-2010. It is now 2012.

Rather than making money off a newspaper, Adelson’s “Israel Hayom” mission has been to reshape Israel’s politics and media, and in this he has succeeded, wreaking damage that is possibly beyond repair.

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The price of daily newspapers in Israel is no chump change: it is well over $1. After adjusting for the lower average salary, you can see that Israelis need to pay 3-5 times or so more per issue compared with Americans. But even at that price, the 3 main dailies – centrist mammoth Yediot, center-right challenger Maariv (both tabloids), and high-brow “NYT clone” Haaretz – have struggled to keep afloat in recent years.

Add to this a free-for-all political culture, with nearly no checks, balances, or awareness of what these strange beasts are – and you’ve got a wide-gaping hole for someone with billions to spare and a crass political agenda.

Competing directly on Maariv’s market niche, Israel Hayom was massively distributed from the get-go – first at train stations, and then at bus stations, supermarkets, malls, etc. etc. – for free. Maariv’s market share plummeted, its #2 position easily captured by Israel Hayom. For the past couple of years the word “bankruptcy” has been hovering over Maariv. In a lame effort to compete, it has slanted its reporting even farther to the right. Because you see, Israel Hayom has never made its leanings secret, to the point that quickly earned it the common nickname “Bibiton” (“Bibi’s Newspaper”). For example, on Independence Day 2008 Israel Hayom published a special issue, whose centerpiece was a lengthy, fawning interview with then-opposition leader Netanyahu. Maariv’s Rogel Alpher, writing about this interview (Hebrew link), claims that in fact it was Netanyahu who had urged his friend Adelson to use his vast pockets and set up a newspaper to fight the rest of Israel’s media – whom he deems hostile to him. As this article reminds us, the vast majority of Israel Hayom readers are scarcely aware of all these machinations – they are just happy to get a shiny full-size newspaper for free every day.

Here’s how Israeli media researchers described the newspaper’s actions during the 2009 election campaign:

A study conducted by Moran Rada showed that while competing newspaper’s coverage of Netanyahu was “not especially fair”, Yisrael Hayom’s coverage was biased in favor of Netanyahu in most editorial decisions, that the paper chooses to play down events that don’t help to promote a positive image for Netanyahu, while on the other hand, touting and inflating events that help promote Netanyahu and the Likud. Oren Persico reached the same conclusion after the 2009 Knesset elections, writing that throughout the campaign, Yisrael HaYom published only one article critical of the Likud, and tens of articles critical of Kadima.

Recall that Kadima won 28 seats in the 2009 elections (out of 120), vs. Bibi’s Likud’s 27. Had the margin in Kadima’s favor been a couple of seats larger, we’d be talking today about PM Livni and her centrist coalition, rather than PM Bibi and his far-right wingnut circus. The Occupation would have probably been intact; but relations between US and Israeli governments would surely have been far smoother than they are now. And almost as likely, we could have avoided some signature Bibi moves such as the deadly takeover of the Gaza flotilla (his predecessor allowed a smaller flotilla through in 2008) and the ensuing ugly propaganda battle and souring relations with Turkey.

With mainstream Israel deeply under the spell of short-attention-span media consumption, I’d like to hear someone arguing that NIS >250M of free campaigning posing as a “legitimate newspaper”, had made no difference in the 2009 elections and in bolstering Bibi’s position since then. Well, actually, that’s exactly what I’ve heard from Israelis when I raised the point, as recently as last week. No one likes to think they’ve been manipulated and suckered.

Well… sorry to break it to you: a large sector of mainstream Israelis are among the most volatile sucker voter populations on the planet. For example, in 2003 Israelis catapulted the anti-religious Shinui party to 3rd place with 15 seats. By the next election (2006) the party was wiped out (yes, 0 seats) due to corruption and dysfunction. Half as many “protest voters” then turned around and chose an obscure party advocating retirees’ rights, awarding it 7 seats. Within months that party, as well, has turned out to be a cruel hoax, and by 2009 it had evaporated.

In view of this volatility, the size of “sucker votes” up for grabs, and the closeness of the 2009 elections – it is highly likely that using his “Bibiton” as a propaganda vehicle, Adelson has essentially bought the present government of Israel – lock, stock and barrell.

No anti-trust investigation has been launched against what appears to be Israel Hayom‘s flagrant violation of predatory pricing laws in the newspaper market. One reason is that apparently, Israel has no predatory-pricing law. After the devastating impact both on competing newspapers and on the political map became evident, there were several attempts by non-Likud politicians to pass such a law; the attempts failed. Meanwhile, according to its Wikipedia entry, Israel Hayom has now surpassed Yediot. Starting in summer 2010 – a mere 3 years after its launch! – this free-propaganda Adelson gamble posing as a newspaper has the #1 spot in weekday market share. In 2011 it has further cemented its position: it now publishes a lengthy Friday edition (Israel’s analogue to the Sunday papers), which is already running second to Yediot. If recent trends continue, it will take over the #1 weekend spot pretty soon.

And Adelson, bless him, is not the type to use this immense clout in a refined manner. In 2011, when Israeli TV channel 10 aired an unflattering story about him, he forced the anchors to go on air and issue a humiliating apology written by his cronies – prompting the head of Channel 10 news to resign in protest.

It was not enough for Adelson. When this financially struggling channel requested additional time for debt payments, the government committee surprisingly denied it – and Channel 10 was about to shut down last month. Legal authorities intervened and gave Channel 10 a lifeline of the type that has kept it afloat till now, but the story is not over. Similarly, the story is far from over for Adelson’s thuggish meddling in Israeli politics, and for mainstream Israelis’ frightening blindness to it.

I end with the funniest (or saddest) part.

Israel Hayom has no printing presses. So who prints their papers? Haaretz – yes, that would be the champion of liberal-progressive values, both through its daily and through its rabble-rousing economic tabloid “The Marker”. According to the Hebrew article linked in the intro (posted by “The Marker”s competitor, of course), the Israel Hayom payments make up some 15%-20% of the Haaretz-The-Marker group’s revenue stream.

Recently, Haaretz protested loudly when PM Netanyahu made snide remarks about their being “adversaries to Israel” or something like that. You worry about the right-wing’s chilling effect on Israel’s media freedom? Well, how about stopping those Israel Hayom presses for a while?

I’d hate to be in Haaretz’s position, having to decide between going under (Haaretz was fairly close to that in the mid-2000’s), and serving the interests of those trampling upon what you hold most dearly. But sometimes one does need to walk the walk. It might be that this Israel Hayom deal has made Haaretz owners more amenable to a second shocking deal, in which 20% of the paper was sold to right-wing Russian oil oligarch Leonid Nevzlin. Such a sale would have been unimaginable a few years ago.

Well, Haaretz might find itself dumped by the wayside anyway – in recent months Israel Hayom started publishing some of its volume in the presses of defeated rival Maariv.

(this is an updated and expanded version of a Daily Kos post)