[KukkoDrukko]

Murdoch continues to try to build on his empire. Apparently part of Newsday's attraction is its healthy P&L which will be used to offset the Post's annualized $50MM worth of losses.

So much for the additional checks and balances brought to bear by an independent 4th estate. I wonder if and when the anti-trust regulators will step up and say enough is enough.

http://www.washingtonpost.com/wp-dyn...200024_pf.html



Tribune near plan to sell Newsday to News Corp
Reuters
Tuesday, April 22, 2008; 1:29 AM

NEW YORK (Reuters) - Tribune Co (TXA.N) has reached agreement in principle to sell Newsday to News Corp (NWSa.N) for about $580 million in what would be a joint venture, according to a source familiar with the matter.

Under the terms of a deal, Newsday would be part of a joint venture with News Corp's New York Post and other News Corp assets, according to a report in the Wall Street Journal. News Corp would own most of the company and Tribune would keep a stake of less than 5 percent.

Selling the paper would be key to Tribune Chief Executive and Chicago real estate magnate Sam Zell's plans to help slash debt at the company, which he took private in an $8.2 billion buyout last year.

The Newsday deal is expected to wipe out as much as $50 million in annual losses that News Corp now incurs on the Post, with the combined Newsday-Post operation earning roughly $50 million, one person familiar with the situation said, according to the Journal.

Regulatory issues could slow the sale, particularly media ownership issues that could restrict the number of properties that News Corp and Chief Executive Rupert Murdoch could own in the New York Area.

An announcement of a deal could be some time away, one person said.

Other parties who have expressed interest in Newsday include Mortimer Zuckerman, who owns New York Post rival the New York daily News, as well as Cablevision Systems Corp (CVC.N), the Journal reported. Reuters previously reported that Zuckerman bid on Newsday, according to a source.

The pending agreement was fashioned largely by Murdoch, Zell and a senior banker, the Journal reported, adding Murdoch and Zell met directly several times during negotiations, according to people familiar with the situation.

The structure of the deal is in part designed to meet Tribune's demand that it be as tax efficient as possible, with Tribune getting cash from the deal by guaranteeing debt raised by the joint venture, the Journal reported.

In addition to its stake, Tribune will receive $540-$560 million in cash, people familiar with the situation said, according to the Journal.

As part of the agreement, News Corp wouldn't be able to unwind the joint venture for at least 11 years, the Journal said.

Several Tribune officials declined to comment. A News Corp spokesman could not immediately be reached.

(Reporting by Robert Macmillan, Editing by Ian Geoghegan)

© 2008 Reuters
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[DoctoBuntonTen]

This, media consolidation, is a pretty big deal at least to me. If it does not stop what ever objectivity left (admittedly little) in the mainstream media will simply disappear. The news and media's editorial perspective will be dominated by a single entity diversity of opinion will disappear.

Congress is attempting to enact stronger legislation against this, but GWB is is expected to veto any bill that comes before him in that vain

http://www.nytimes.com/2008/04/23/bu...ership.html?hp
With Possible Newsday Deal, Murdoch Takes on F.C.C. Media Rule

By STEPHEN LABATON
WASHINGTON — As he nears completion of a deal to acquire Newsday from the Tribune Company, Rupert Murdoch appears likely to pose the first significant challenge to the media ownership rule that the Federal Communications Commission recently adopted.

Even without Newsday, Mr. Murdoch was in the process of seeking waivers to continue to control two newspapers (The Wall Street Journal and The New York Post) and two television stations (WNYW and WWOR) in the New York area.

With those waiver requests pending at the F.C.C., the Newsday deal means that Mr. Murdoch must now apply for a waiver to own the two television stations and three newspapers in the same market.

The new rule, approved by a deeply divided commission in December, permits a company to own just one paper and one television station in the same city in the top 20 markets so long as there are at least eight other independent sources of news and the station is not in the top four. (The stations controlled by News Corporation are the fourth- and sixth-largest in the New York market.)

The architect of the rule, Kevin J. Martin, the chairman of the commission, has made clear that there is a strong presumption against granting waivers.

The Newsday deal also becomes public as Congress takes up a measure that would restore the old ownership rule, which generally restricted a company from owning both a newspaper and a television station in the same city, unless the F.C.C. granted a waiver.

On Thursday, the Senate Commerce Committee is expected to approve the bill, which is sponsored by Senator Byron L. Dorgan, Democrat of North Dakota. Industry lobbyists say that the measure has a good chance of passing the House and the Senate this year, although President Bush has threatened to veto it.

Mr. Dorgan said in an interview on Tuesday that the measure was intended to prevent the media consolidation reflected by companies like the News Corporation and its recent acquisition of The Wall Street Journal and possibly soon Newsday.

“It’s exactly the kind of consolidation I would hope the commission finds is not in the public interest because the free flow of information in this country is not accommodated by having fewer and fewer voices determine what is out there,” Mr. Dorgan said. “They try to argue that there are all these outlets — the Internet, television, radio, newspapers and so on. It may be more outlets, but it’s the same ventriloquists. You have five or six corporate interests that determine what most Americans see, hear and read.”

Mr. Murdoch managed to control two local television stations through one permanent and one temporary waiver to the old rule. But the renewal of the licenses of both stations, under review since 2006, has been challenged by groups opposed to greater media consolidation.

“He was outside the permissible rules to begin with, and since the broadcast licenses were under review, he’s acquired The Wall Street Journal and now maybe Newsday,” said Andrew Jay Schwartzman, the president of the Media Access Project, an advocacy organization committed to diversity of media voices. Mr. Schwartzman has helped lead the effort against renewal of the New York broadcast licenses controlled by News Corporation.

Gary Ginsberg, a spokesman for News Corporation, declined to comment, as did Mr. Martin.

News Corporation has already joined a group of other broadcasters and newspaper companies in a lawsuit challenging the ownership restrictions as a violation of their First Amendment rights. In the meantime, the company is expected to seek a permanent waiver from the commission to permit it to own the two stations and three newspapers.

Industry lobbyists said that News Corporation would tell the commission that its ownership interests pose no problem because New York is the most diverse media market in the world. It is also expected to tell the commission that consolidation is vital to help the ailing newspaper industry — a variation of the claim made by Mr. Martin in justifying his decision to relax the old ownership rule modestly.

But critics of consolidation said that if the commission permitted the same company to control two television stations and three newspapers in the same market, it would make the rule look virtually meaningless.

“They’re playing double or nothing with these new rules by going after Newsday,” said Gene Kimmelman, a senior lobbyist in Washington for Consumers Union. “We’ll see how serious the chairman really is about applying his new rules.”

It is unclear whether Mr. Martin will still be running the commission when it decides how to proceed. The agency might not complete its review of the renewal of the broadcast licenses and waiver requests before next year, and many officials expect Mr. Martin to leave the agency after the arrival of a new president in January.

The new rule also leaves considerable discretion to the agency about how it should be applied, which could ultimately be helpful to Mr. Murdoch.

“While the F.C.C. did a decent job of trying to make the rules clear, the waiver criteria are flexible enough so that different people can interpret them in different ways,” said Blair Levin, a former top commission official, now an analyst at Stifel Nicolaus.


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[iklostardinn]

Newsday is a shell of the great paper it used to be - its national/international coverage has been gutted, and its local coverage is now lacking. I started reading the local weekly's to find out whats actually going on in my town - haven't looked back. Its still good for sports and the occasional feature piece.

[JakilSong]

^^

Agreed, the paper has suffered under the ownership of the Trib, but it still has a very wide circulation that would now fall under the Murdoch sphere of influence. The combination of the Journal, Post and Newsday provide News Corp with significant share of wallet in NY and represents a further erosion of journalistic and editorial diversity within NY area.

[Agitoligflise]

http://www.nytimes.com/2008/05/13/bu...gewanted=print


May 13, 2008
Cablevision Strikes Deal to Buy Newsday

By TIM ARANGO and RICHARD PÉREZ-PEÑA
Cablevision Systems and the Tribune Company announced a $650 million deal on Monday that will give Cablevision a 97 percent stake in Newsday.

“Newsday is one of the great names in the history of American journalism and it is both an honor and privilege to return Newsday back to Long Island-based ownership after nearly 40 years,” Cablevision’s chairman, Charles F. Dolan, said in a statement.Under the terms of the deal, Cablevision will have 97 percent of the equity in a partnership that owns Newsday and Tribune will have 3 percent. To form the partnership, Tribune will contribute the Newsday assets and Cablevision will contribute new bonds.

The deal, once considered a long shot, was thrust to the front of the line over the weekend when the News Corporation, controlled by Rupert Murdoch, pulled its bid, saying it would not raise its offer to compete with Cablevision.

That left Cablevision with the prevailing offer.But not for the first time, and probably not for the last, Wall Street is wondering just what the Dolans are thinking.

Like many actions taken by the Dolans, the family that controls Cablevision, based on Long Island, and a host of New York properties like Madison Square Garden, the Knicks and the Rangers, their Newsday bid resulted in a collective head scratch.

The Newsday bid had the backing of both Charles Dolan, who founded the company, and his son James L. Dolan, the chief executive — even if the two still have an uneasy relationship. Three years ago, father and son fought publicly over the fate of an expensive satellite project called Voom, a favored venture of the elder Mr. Dolan; when it lost millions, his son shut it down.

About two weeks ago, both Dolans flew to Chicago to meet with Sam Zell, the chief executive of Tribune, and Cablevision’s bankers and lawyers were in Chicago over the weekend finishing the final deal points.

Both Dolans have attended meetings about Newsday, but the tension between the two has been obvious, said one person present who was granted anonymity because of the confidential nature of the discussions that led to the deal. The family has been a lightning rod for public criticism — not least of all because of the soap opera that has been the Knicks — and the father is known to laugh off the words of critics, while the younger Mr. Dolan is more thin-skinned.

The Newsday bid came amid a flurry of deal activity from Cablevision after an unsuccessful bid by the Dolan family last fall to take the company private in a $10.6 billion deal. Most analysts question the rationale for buying Newsday and had hoped Cablevision’s quest would fail.

But when it comes to the Dolans, the only thing that is predictable about them is that they are unpredictable.

“We’ve seen this movie before,” said Craig E. Moffett, an analyst at Sanford C. Bernstein & Company. “Jimmy made the comment the other day that their shareholders pay him to grow the company. Maybe he believes that, I don’t know. Shareholders pay him to increase shareholder value. Even if you squint hard enough to justify these deals, it isn’t what shareholders signed up for.”

Last week, the company spent $496 million in stock and cash to acquire the Sundance Channel, a deal that was tepidly accepted by most investors and analysts.

The price, Mr. Moffett said, “was less bad than we expected.” Previously, the company flirted with taking a large stake in AEG Live, the concert promoter owned by the billionaire Philip F. Anschutz. That deal fell through, to the relief of many investors, who just wish the company would use its cash to buy back shares.

“It’s always a fun parlor game to figure out the Dolan family’s motivations,” said David C. Joyce, an analyst at Miller Tabak & Company.

Cablevision’s Newsday bid had a touch of audacity to it, coming as it did after offers from two dyed-in-the-ink newspapermen: Mr. Murdoch, whose News Corporation owns The New York Post, and Mortimer B. Zuckerman, owner of The Daily News. Both Mr. Murdoch and Mr. Zuckerman bid $580 million, or $70 million less than Cablevision.

“If you look at The Post and Zuckerman’s bid, there are real synergies there,” Jill A. Greenthal, a senior adviser at the private equity firm the Blackstone Group, said last week at a forum on the media in New York City. “If you look at Cablevision’s bid, he really wants to own a Long Island newspaper, which I’m not sure I understand.”

An executive of another business who has worked closely with the Dolans said their interest in Newsday could not be entirely economic “because there’s not a business rationale to spend what they’re willing to spend.” This person spoke anonymously to avoid alienating the Dolans for future business.

But even if the prospective deal has an element of vanity to it, Cablevision could make the following argument. It has roughly three million cable subscribers in Long Island, New York, New Jersey and Connecticut, while Newsday has about 300,000 subscribers. Cablevision’s customer relationships could help it sell more subscriptions, while overlapping ad sales forces at the two companies could result in cost savings. And Cablevision owns a 24-hour local news channel in Long Island, which could use the news gathering capacity of Newsday — and in theory cut costs.

“To be fair, those synergies probably do exist,” Mr. Moffett said. “But it ends there, and it’s far from sufficient that it would support owning Newsday at that price.”

The Cablevision empire is a strange dichotomy: one side is a cable company that is regarded as one of the best run in the country, while the other side includes Madison Square Garden, the Knicks and the Rangers — and all the publicity and drama that go with owning pro sports franchises in New York City.

Mr. Moffett, talking about the cable portion of Cablevision’s recent quarterly earnings — which make up about 75 percent of the company’s revenue — said, “It was another in the line of an amazing string of quarters.”

As a sign of the strength of the cable side, Mr. Moffett noted that Cablevision recently passed Verizon Communications as the largest provider of fixed-line phone service on Long Island.

“In four years, they went from not having phone service to being bigger than the phone company,” he said.

A cynical theory for the Dolans’ recent deal-making is making the rounds of Wall Street. Under this line of thinking, the family is so angered that shareholders killed the buyout that the Dolans now consider the company their own private fief.

“That’s ridiculous,” Mr. Moffett said. “No one’s going to say, ‘I’m going to light up some of my billions just to spite shareholders.’ ”


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