Cablevision looks to acquire Newsday as News Corp withdraws bid

12 May 2008

Mumbai: Cablevision looks like the lucky suitor in the bid for Newsday, with Rupert Murdoch's News Corporation having pulled out its bid.

Sources indicate that the Tribune Company, which owns Newsday, is likely to accept Cablevision's $650-million bid. Sam Zell took control of Chicago-based Tribune in 2007, and is now downsizing jobs and selling assets to pay off debt in the face of its print advertising and circulation declining. It has $1.85 billion in debt that matures at the end of 2009. Amongst other assets reported to be on the block are its Chicago Cubs baseball team, and the Cub's home stadium, the Wrigley Field.

News Corporation withdrew its $580 million bid over the weekend. Murdoch had said a week ago that he would not raise his bid beyond the $580 million. Murdoch already owns The New York Post, and The Wall Street Journal.

The other remaining bidder is The Daily News' Mortimer Zuckerman, who though reported to be interested in the acquisition, is also seen to be at peace with Cablevision acquiring it, since Murdoch is now out of the race. Sources had indicated that Zuckerman was interested in Newsday, but with his fear of Murdoch acquiring it dispelled, may opt out.

Long Island's Newsday has been on the block since March this year, with Zell trying to sell it to raise much needed cash. It makes an attractive target as it is 11th-largest in circulation amongst American dailies.

Cablevision's offer was not actually excessively higher than that of News Corp or The Daily News, as the $70-million excess was a bid for the real estate occupied by Newsday. Murdoch and Zuckerman were content to let the real estate remain with the Tribune Company, but sources say that even then, Cablevision effectively outbid the duo by around $40 million.