Pierre El Daher | Interview in Campaign magazine

Pierre El Daher

Pierre El Daher, the chairman of LBC International, is facing a battle on two fronts against Saudi Prince Al Waleed Bin Talal and Lebanon’s Samir Geagea.

Article by Tina Junday, published in Campaign Magazine, June 2013

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Being at the centre of two controversial legal battles – one against a Saudi prince, the other a former Lebanese warlord – would be enough to drive most people over the edge. Yet this is exactly the situation facing Pierre El Daher.

Speaking openly about the two cases for the first time, the CEO of LBC International (LBCI) at first glance appears to be taking it all in his stride, sipping water and shrugging his shoulders. “Well, these things happen in life,” he says.

Then the subject of his split from former Saudi business partner Prince Al Waleed Bin Talal crops up. The deterioration of El Daher’s and Al Waleed’s relationship first hit the headlines last April with the liquidation of Lebanese Media Holdings’ Production and Acquisition Company (PAC), but the story goes much deeper. It is a complicated and drawn out saga, with an arbitration case pending in a Paris court. And if that wasn’t enough, the former Lebanese Christian militia leader Samir Geagea has taken El Daher to court in Lebanon claiming ownership of LBCI.

So what went so wrong that it led to the breakdown of El Daher’s and Al Waleed’s partnership, put PAC into administration, caused hundreds of job losses and led to a shift of power at one of Lebanon’s oldest and most independent TV stations?

Until last year El Daher and Al Waleed were business partners at Lebanese Media Holdings (LMH), with Al Waleed owning an 85 per cent stake. When Al Waleed had bought the majority share in 2008, his capital increase was intended to help bolster the success of LBC SAT and its production arm PAC. At the time El Daher, who had been largely responsible for the development of LBC following the imprisonment of Geagea in 1994, assumed the partnership would blossom into a stronger and more refined broadcasting group. But after an impromptu boardroom meeting, the relationship turned sour and left channels and employees being shifted from pillar to post.

According to El Daher, the war of words started when LBC SAT and PAC were moved to Al Waleed’s Rotana Group, with the Choueiri Group dropped from media sales duties and sales shifting in-house to Rotana Media Services (RMS).

“The main point of issue was the revenues,” says El Daher. “The prince insisted on moving LBC SAT to RMS. I told him this would be suicidal. I disapproved. We had a board meeting and I said no, but he owns 85 per cent of the Lebanese Media Holdings. He wanted to make the move because he wanted them all under one group – under RMS. When the prince had taken on the majority share I thought it was a great idea. I thought it would take the channels to the next level. The capital increase was for major improvement to production but he made the decision to move LBC SAT after ousting the Choueiri Group in December 2008 and by 2009 the results were disastrous. Our revenue went down by 50 per cent.

“In January 2012 he had decided to stop our partnership. He said there were many reasons but the main reason was because he was losing money, which was because of the decision to get rid of Choueiri. When that happened revenues dropped. I didn’t think it was a good decision to get rid of them. There was no exchange of words after that, just letters through our lawyers. I said ‘that’s fine, if you want to get out then get out’.”

Both remain at loggerheads, with the Paris arbitration case now pending. It could take years before any kind of conclusion is reached. LBCI’s claims in the arbitration case include a request that “the Rotana Group pay PAC the outstanding monies owed to PAC Ltd under the Cooperation and Service Agreement dated 30 September 2009 but which the Rotana group had refused to pay, making PAC unable to meet its obligations under the Cooperation and Service Agreement. LBCI’s claims also included ownership and broadcast rights over certain LBC marks and the entitlement over equipment and library components”.

Speaking about the case, El Daher said: “I’m quite happy about how things are going. I’m not worried about this. I’ve seen how things are moving in court.”

At the heart of the case is the liquidation of PAC and the loss of 397 jobs, with employees blaming both El Daher and Al Waleed. When the closure of PAC was first announced in Beirut last spring, a statement by LMH said that it was ending operations of the company due to losses sustained after the refusal of LBCI to pay it its dues.

“The failure of LBCI to pay for programing produced by PAC and the ensuing disputes with the head of LBCI and former-head of PAC and Rotana TV, Mr Pierre Daher, have resulted in the inability of PAC to pay the salaries of its employees and continue to sustain the ongoing costs of production and operations,” said the statement.

“Despite its prime location, diversified production facilities, multiple studios and talented production staff, the PAC production facility has sustained significant losses for some time, many of which stem from actions and decisions taken by the previous management team.”

In November last year former PAC employees held a protest in Beirut, demanding that they receive all compensation due to them following the closure. Addressing El Daher, the employees, who blamed him for not informing them about the company’s decision in advance, accused him of “throwing more than 150 families in the streets”.

A further protest in December last year was cancelled after a settlement was reached with LBCI. “The former employees have not been paid for a year. And suppliers are waiting in line too,” says El Daher. “I told them [the workers] it was not my issue anymore.”

It is also claimed that Rotana TV owes a total of $44 million to workers who were laid off and suppliers left out of pocket. The Rotana Group declined to comment when contacted by Campaign.

“I feel sorry for them and what they are having to go through. These are employees who we worked closely with for 20 years or more. We have rehired 250 of those workers with LBC International. Others are based in other companies and found new jobs and about 50 are without work right now.” And then there’s Geagea, who was released from prison in 2005 after serving 11 years for crimes committed during the country’s civil war. He has initiated proceedings claiming ownership of LBCI.

LBC was originally launched by the Lebanese Forces in August 1985 and Geagea alleges that El Daher breached his management responsibility of LBC during Geagea’s 11 years of incarceration. Since Geagea’s release the Lebanese Forces have claimed the company still belongs to them, although no conclusion is in sight.

El Daher says: “He [Geagea] wants to be part of the political scene and wanted more time on the channel – I said LBC couldn’t be a mouthpiece for him. When I refused there was a question of whether he owned the channel. I contest this and I said let’s go to court. It’s politically driven. I am amazed by politicians making false allegations. Samir Geagea is one of them. He said in an interview that the case could take three years. It’s been five years just to debate about the issue. The judge will decide whether to take it to trial.”

With all this going on, what lies ahead for LBCI? Does it even have a future?

“We have built our own studios separate from PAC rehired 250 staff. We are doing programmes in partnership with other TV channels, MBC in Dubai, CBC and Al Hayat. I’m going to continue with LBCI – I’m quite happy with what we’re doing.” He says the channel is “doing very well at the moment” but won’t reveal its revenue. “We are not a public company, it’s private but we’re doing well.”

El Daher also remains tightlipped about his business plan with shareholders, which won’t be revealed until the end of the year. “There will be major changes. The internet will be playing a completely different role compared to what it was like in 2008.”

1985 The Lebanese Broadcasting Corporation (LBC) is launched on 23 August by the Lebanese Forces militia

1990 Lebanese Civil War ends

1992 El Daher founds LBC International (LBCI)

1994 Samir Geagea, who was leader of the Lebanese Forces, is jailed for crimes committed during the Lebanese Civil War

1996 LBC SAT is launched and LBCI goes global, covering the Arab world, Europe, America and Australia

2005 Geagea is released and takes El Daher to court claiming ownership of LBCI

2007 El Daher launches the Production and Acquisition Company (PAC)

2008 Prince Al Waleed bin Talal becomes the largest shareholder, winning majority shares in PAC and LBC SAT

2010 Rupert Murdoch also becomes a shareholder of PAC and LBC SAT

2012 The business partnership between El Daher and Al Waleed ends. PAC is liquidated and 397 staff are laid off. The majority are re-hired by LBCI but 45 dismissed workers are still unemployed with most still fighting for severance pay

2013 LBCI and the Rotana Group are set to battle it out in a Paris court of arbitration. A decision is yet to be made on whether a trial will be fixed over Geagea’s legal dispute with El Daher regarding ownership of LBCI

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