Cablevision buys Newsday after News Corp quits race

by Staff, Brand Republic 12-May-08, 09:05

NEW YORK - Cablevision Systems has won the race to buy New York tabloid Newsday, after Rupert Murdoch's News Corporation dropped out.

A deal is expected to be unveiled later today, in which the paper will sell to Cablevision for $650m.

Sam Zell, chief executive of Tribune, said: "This agreement enables us to maximize the value of Newsday and still retain an interest in this valuable asset.

"The newspaper has a unique circulation base and a tremendously strong brand. I expect them to grow and flourish as a result of this new partnership."

News Corp going cold on its $580m bid came as a surprise, as three days earlier Murdoch had said that he was confident of beating Cablevision.

It is thought that News Corp dropped its bid after weakness was revealed in Tribune's earnings and the ongoing decline of its newspaper business, which is suffering like many US papers.

A spokesman for News Corp would only say that the bid had become "uneconomical''.

It is not thought that regulatory concerns were an overriding problem, despite News Corp already owning the New York Post and two New York-area TV stations. Adding Newsday would have given News Corp coverage in the outer boroughs and Long Island.

The third bidder in the race, Mortimer Zuckerman, owner of the New York Daily News, also bid $580m.

Tribune Company, which also owns the Los Angeles Times and the Chicago Tribune, is keen to make a deal. It is selling-off various assets in an effort to reduce its $8.2bn debts, which it became encumbered with after going private last year when real estate baron Zell took over the company.

It has another $1.85bn in debt that will mature by the end of 2009.

The company also plans to sell its Chicago Cubs baseball team and the Cubs' home stadium, Wrigley Field.

If the deal goes through, it will be the first newspaper that cable firm Cablevision owns. It will also follow a deal that CEO James Dolan signed last week, to buy Robert Redford's Sundance Channel for around $500m.

Cablevision owns channels including the AMC channel, which is behind 'Mad Men', as well as the New York Knicks, the NHL's New York Rangers, and Radio City Music Hall.