Egypt's broadcast industry found itself in crisis again this week after the private TV station Al-Hayat laid off 30 employees following a financial downturn. Over the last three months the network failed to pay hundreds of its employees and most of its operational costs. In response, workers staged a three-week protest, closing the network's main building and preventing its most popular evening talk show, Al-Hayat Al-Youm, from broadcasting live for one day. The strike ended after the network paid its arrears. The network initially laid off 144 of its employee in January this year in an effort to reduce costs. Al-Hayat, Egypt's biggest private broadcasting company, is owned by Al-Wafd Party leader Sayed Al-Badawi. It has six TV channels and a production house. The significance of the strike lies in that it came just a few days before the holy month of Ramadan, considered the most important season for the broadcast industry in Egypt. Al-Hayat bought nine drama series for at least LE30 million, according to a senior official at the network. The administration also paid LE100 million for broadcasting rights to the Egyptian football league. It is now unable to collect enough money from commercials to cover the cost of operations that were spent in less than a year. The commercial rights of Al-Hayat are owned by Promo Media advertising agency. The company, which is the biggest in the Egyptian market, faces several lawsuits from other clients, including Al-Ahram establishment and the daily Al-Masry Al-Youm. In March, Promo Media also lost the commercial rights to the networks TEN TV and ONTV after failing to earn enough revenues to cover their costs. “The main reason behind the crisis is that Promo Media is not able to pay commercial revenues on a regular basis,” said Mohamed Samir, the head of Al-Hayat network. “So the problem is that we are not able to collect revenue when it's due to cover salaries and operational costs.” Samir said Al-Hayat enjoys financial stability, compared to other competitors in the market, and has enough revenue from commercials to cover its commitments including salaries, operational costs and buying new TV dramas. He denied media reports that Al-Hayat was shopping for buyers and said that the board of directors will consider selling only a small amount of shares. However, a few ex-presenters publicly criticised the network for laying off its employees. “It is not moral and is insensitive to fire people from their jobs after they spent more than eight years serving Al-Hayat,” said Doaa Farouk, who appeared on the Al-Hayat talk show Religion and Life. “The network went through several crises but none of the people who work there complained because they believed that Al-Hayat was their home. But holding up salaries for three months is not easy for anyone,” Farouk said. She added that the board could have limited spending on street commercials to pay salaries instead of firing its employees. Egypt's media scene is currently facing financial hurdles. Some 120 channels are facing off in a commercial market worth only LE3.5 billion. Al-Hayat is not the only private TV network in a financial bind this year. Some networks, including CBC and Al-Nahar, announced a merger in May to avoid shutting down due to lack of revenue. Questions loom over the future of private media in Egypt and the reasons behind some deals, with observers speculating over whether the deals are for purely commercial purposes or political reasons. In May, Egyptian business tycoon Naguib Sawiris announced that he had sold the privately owned ONTV channel, which opened before the January 2011 uprising, to Ahmed Abu Hashima, an Egyptian businessman who also owns the largest share in the private newspaper Al-Youm Al-Sabei. A recent study conducted by economy researcher Mohamed Reda forecast that acquisitions in the media market could shift dramatically. In this analysis, Egyptian businessmen would become the dominant player rather than foreign businessmen and companies. The study added that these acquisitions would aim to create a monopoly in specific sectors, taking advantage of the decline in the market value of companies.
