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Well, who is the true king of Israel's cable television industry? Mark Schneider of United Pan-European Communications (Nasdaq:UPCOY, ASE:UPC), perhaps? No. He may have ruled supreme a year and a half ago, when his pan-European cable company was trading at a value of $20 billion, but his star has faded.

Then, UPC ¿ which owns half of the Israeli cable company Tevel ¿ was a role model around the world. Today, with its shrunken market cap of $150 million, it's just a matter of time before it reschedules its debt in order to stave off the wolf. A month ago, the ousted king quit, anyway.

Okay, how about John C. Malone, the chairman of Liberty Media Corporation (NYSE:LMC)? Nope. His cable crown dates from the 1980s, when he developed America's cable industry. Though given his remarkable foresight in selling his biggest cable company, TCI, to AT&T at the height of the euphoria for a huge $5,000 per subscriber, he's still a king, just not of cable TV. Of timely exits, maybe.

Freed of foreign competition, let's look closer to home. Leon Recanati? Eliezer Fishman? Arnon Mozes? Shmuel Dankner? Each is a huge Israeli cable baron by his own right. They rule Israel's three cable companies, Matav (Nasdaq:MATV), Tevel and Golden Channels, which are about to merge to create a single cable mammoth.

But before we crown any of these men, let's look at their companies' finances. Let's see who exactly forked over the fertilizer needed to keep the hungry industry in clover over the past two years.

A moment of napkin math. How much do they owe?
Here are the figures. As of June 30, Tevel boasted negative equity of NIS 282 million. Its short-term loans totaled NIS 1.6 billion and its long-term loans another NIS 1.1 billion. Nor is that all. Notes to the company's financial statement show that it will need another $110 million in external financing over the coming three years.

There is a "major bank" that agreed to lend Tevel the money, subject to a long list of conditions, including liens and milestones, and that the cable company's shareholders also kick in a $50 million loan and put up their shares in the company as collateral.

In short, by year-end 2003, Tevel's debt to its shareholders and mainly to the banks will total NIS 3 billion.

As of the end of June, Matav's equity stood at NIS 250 million, its short-term net commitments at NIS 450 million and its long-term debt at NIS 350 million. The company's total debt to the banks is about NIS 800 million, not including debts of affiliates Bezeq and Partner Communications (Nasdaq, TASE: PTNR, LSE:PCCD).

Golden Channels hasn't published its financial statement yet. Market sources believe its debt to the banks is the smallest of the trio, about half a billion shekels. But add on top the NIS 800 million the Fishman-Mozes group borrowed in order to buy 35% of the company in November 1999. This debt is supposed to be repaid using dividends from Golden Channels' cash flow, when it turns positive again.

Who's the Man?
Based on Tevel's assessment that it will need $160 million more to finance its operations over the next three years, we may assume that Matav and Golden Channels will each need a few hundred million shekels.

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To be conservative, let's assume that the two together need NIS 600 million from the banks. Let us also assume that like Tevel, both will be required to jump through hoops to get the money, including sticking to a rigid business plan approved by the banks.

Now all we have to do is add the numbers, which brings us to an impressive NIS 5.5 billion to NIS 6 billion. That's the rough amount the bank establishment has provided or committed to provide to Israel's cable TV companies.

Now we know who the real king of the cable TV industry is. He's the man who finances the industry today. He's the man who lays down the law to the cable companies, setting their operational criteria and investments.

He doesn't sit on the boards of any of the cable companies, but he's the one who approves the cable companies' budgets, business plans and strategies. He pulls the strings at that "big bank" that Tevel coyly mentioned in its financial statement. Granted, he doesn't finance the cable industry on his lonesome, but he put up the most and the banking establishment generally bows to his analyses, views and demands.

Read it and weep
The Man is Ehud Shapira, deputy chief executive at Bank Leumi and the strongest man at the bank after chief executive Galia Maor. He rules the business and credit divisions. He's the man who led the banking consortium that agreed to lend the cable companies NIS 5.5 billion.

True, he wasn't invited to the meeting the cable leaders held on Sunday with the antitrust commissioner, nor did he attend it. Yet assessments that the cable companies won't turn cash-flow positive for the coming two years make the hand controlling the purse strings the most powerful force in the cable industry.

The cable companies' mountainous debt and climbing losses could cause anybody reading their financial statement to lose hair. But in a rare interview Shapira granted a month ago, he stated that most of their losses are due to one-time charges. "The cable industry's debt doesn't worry us," Shapira said, partly because he believes the companies' situation will sharply improve under the amended Telecommunications Law passed in July. Nor does he believe that the cable companies' sole rival in multichannel broadcasting, the YES satellite company, poses real competition.

Shapira, a consummate professional highly esteemed in the local banking world, must know whereof he speaks. One wonders however what YES's creditors feel when hearing Shapira's opinion.

Granted, YES's debt to the banks isn't in the same league. Within a couple of years it should climb to about NIS 1.5 billion. But unlike the cable companies, YES is a young company. The most optimistic estimates give YES less than half the subscribers of the merged cable company, and unlike the cable companies, it will never see revenues from Internet or phone service.

But YES's bankers apparently aren't losing any hair either. One of YES's key bankers is none other than Bank Leumi.

Whenever you read about the cable-satellite wars or learned analyses of the future of multichannel television and regulation, remember this: The power that is at both the merged cable company to be, and at the YES satellite broadcaster, is Bank Leumi. And the king of cable isn't Mark Schneider or even Eliezer Fishman, it's Bank Leumi's Dr Ehud Shapira.