Adelson blamed as Israeli paper fades

JERUSALEM - Throughout much of Israel's history, the Maariv daily was known as the "country's paper," the newspaper with the highest circulation and a cornerstone of Israeli media. Now it is on its last legs - the victim, some say, of a Jewish-American billionaire who is a leading donor to Republican presidential candidate Mitt Romney.

Casino mogul Sheldon Adelson, also a friend of Prime Minister Benjamin Netanyahu, launched his free Israel Hayom - Israel Today - daily five years ago. The tabloid has gobbled up market share since then. Handed out by ubiquitous distributors clad in red overalls at busy intersections, it has become the most read newspaper in Israel.

The 64-year-old Maariv has suffered in the fallout. The newspaper was sold this month by its cash-strapped owner to a rival publisher. Most of its 2,000 employees are facing likely dismissals.

The iconic newspaper has been hemorrhaging money for years, and its downfall is linked to the struggles facing print media around the globe, with the emergence of online news sources and a drop in subscribers and ad revenue rendering the traditional newspaper economic model untenable.

But against the backdrop of a perceived anti-media blitz by the hard-line government, Maariv staffers believe their final blow was delivered by Israel Hayom. Adelson's paper recently passed Yediot Ahronot as the top-read daily in Israel, leaving Maariv in third place, according to a survey by TGI, a leading Israeli polling company.

Besides its flattering coverage of Netanyahu and questionable political agenda, critics charge that its cheap ads and deep pockets are running everyone else out of business.

"We can't compete with a machine that prints money and hands out papers for free," said Avi Ashkenazi, Maariv's veteran crime correspondent. "We are the first ones to enter the slaughterhouse, but we likely won't be the last. It's only a matter of time."

Israel Hayom's success has raised questions about whether a wealthy foreigner has bought power and influence on behalf of the prime minister. Adelson has contributed $30 million to super PACs backing GOP candidates and has attended Romney fundraisers.

Israel Hayom contends its economic model is simply more effective. "(We) won't apologize for our success; the readers prefer us and we thank them," the paper said in a statement.

Maariv's loss would leave Israel, a country of nearly 8 million people, with three national Hebrew newspapers: Adelson's Israel Hayom, Yediot and Haaretz, a small paper popular with Israel's dovish elite. A number of smaller niche publications, including the English-language Jerusalem Post, also exist.

Netanyahu told the Israeli economic paper Globes that Maariv's plight was because of the "dramatic technological changes that are affecting the written press" all over the world. He said he has no intention of getting involved.