Tel Aviv 2019

Deposit crisis officially solved: Israel will host Eurovision 2019

After several weeks of a situation in standstill, and with an escalation of words yesterday, the “deposit crisis” is finally solved. IPBC will take a loan to pay the EBU, and the Government shall guarantee it should the contest be cancelled for external reasons.

What is the deposit crisis?

If Israel wants to host Eurovision, the public broadcaster IPBC (Israeli Public Broadcasting Corporation) must pay a guarantee deposit to the EBU (European Broadcasting Union, which organizes the contest). This deposit serves two purposes : it shows that the broadcaster is able to finance the hosting, and should the hosting in Israel be cancelled – whatever the reason –, it would fund the hosting elsewhere. However, if all goes well, the deposit should be sent back to the IPBC after the contest.

This year, the EBU asked for a 12 million euros deposit (50 million New Israeli Shekels). The IPBC considers it cannot pay those 12 million without cutting into production and staff (up to 200 redundancies). Being a public broadcaster, it asked for extra funding from the Government, which has been refusing it, considering any extra funding would be seen as political meddling, and that the annual budget (178m euros) was set by the law. Yet, the IPBC repeats that the budget was decided in 2017, and could not take into account the extra-cost of a Eurovision victory.

The situation has remained at a standstill for weeks, forcing the EBU to extend the deadline to pay the deposit, from August 1st to August 14th, today. Yesterday, extra pressure was put on both sides. The Government not only stood its ground by refusing to give extra fund, but also threatened to shut down the IPBC should the corporation refuse to pay the deposit (and thus lose hosting rights). The same day, the EBU issued a statement after questions from fellow Eurovision website ESCToday, publicly assuring that “there are always contingency plans in place”, should Israel give up on hosting.

The resolution

Today, Israeli newspaper Haaretz revealed that the situation could have found a resolution. Later, this afternoon, Walla! and The Jerusalem Post revealed the deal was officially signed, which was confirmed by the IPBC.

The IPBC will pay the 12m euros with a bank loan, that it will need to repay later. This solution was not originally favoured, as taking a external financial loan would possibly create an important deficit in the broadcaster’s budget.

The Government will guarantee the loan. Indeed, should the contest be cancelled for external reasons (such as a war, a natural catastrophe, etc.), the deposit will be lost, as the EBU would use it for the back-up contest. But the loan would still have to paid back. In this situation, the Government would hand over 12m euros to the IPBC to help them pay back. But if all goes well, the broadcaster will be give its money back after the contest, and then repay the loan on its own.

Israel 2019 it is, then.

What do you think? Is this the best resolution? Was it much ado about nothing? Tell us more in the comments below or on social media at @escxtra !

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