Murdoch Drops Bid, Cablevision Wins ‘Newsday’

After Rupert Murdoch’s News Corp. yanked its $580 million bid for Newsday on Saturday (via MediaPost and the Wall Street Journal), Cablevision announced Monday that it has reached an agreement to buy the Long Island paper for $650 million.

Cablevision will own about 97 percent of the paper, while Tribune Co. will retail about 3 percent, as well as its real estate assets, writes Newsday. 

“The possibilities are unlimited as these two Long Island media properties join forces to create new ways of delivering exceptional editorial content, with deep knowledge of and commitment to Long Island and New York,” said Newsday publisher Tim Knight.

Sam Zell, Tribune chief executive, added, in a statement: “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 local brand - I expect them to grow and flourish as a result of this new partnership.” 

Analysts had expected News Corp. to win the newspaper; they have been, for the most part, critical of Cablevision’s plans. 

Newsday is one of the region’s most profitable newspapers. It earned nearly $90 million last year, on sales of $500 million. The New York Post reportedly loses about $50 million a year. The Daily News is said to be marginally profitable.

The purchase is expected to be completed late this summer.

In late April, Murdoch was said to have signed an agreement in principal with Tribune Co. to purchase Newsday for about $580 million in what would have been a joint venture. Analysts felt that acquisition of Newsday would help make the New York Post profitable, but Murdoch reportedly worried that antitrust issues would hold up a sale.