Media Ownership as Political Investment: The Case of Israel Hayom∗ Guy Grossman† Yotam Margalit‡ Tamar Mitts§ January 30, 2020 Preliminary draft - not for wide circulation Abstract Can the ultra-rich shape electoral results by controlling media outlets that openly propagate their political interests? How consumers discount slanted media coverage is a question gaining urgency as a growing number of billionaires mix ownership of major media outlets with business interests and political agendas. We study this question in the context of Israel, where billionaire Sheldon Adelson launched in 2007 Israel Hayom, a right-leaning newspaper. Handed out for free, it soon became the most widely read newspaper nationally. Utilizing local media exposure data since the launch, our analysis indicates that the newspaper exerted significant electoral influence, primarily benefiting Netanyahu and his Likud party. This shift helped bring about a sea-change in the right’s dominance of national politics. Our results highlight the immense impact the ultra-rich can exert in shaping politics through media ownership. ∗We thank Brit Levanon, Shir Raviv and Eran Rubinstein for excellent research assistance. We received helpful feedback from participants at seminars and workshops in University of Zurich and Stanford University. †Department of Political Science, University of Pennsylvania, and EGAP. Email:
[email protected] ‡Department of Political Science, Tel-Aviv University. Email:
[email protected] §School of International and Public Affairs, Columbia University. Email:
[email protected] 1 1 Introduction Political equality, as embodied in the dictum ‘one person, one vote’, is continuously challenged by the influence of money on politics. Rising economic inequality, together with the reliance of political campaigns on unprecedented levels of private contributions, have meant that the rich exert far greater political influence than citizens with lesser means.