Tribune Co.’s sale of Newsday to Cablevision allows Tribune and its new chairman, Sam Zell, to put $600 million in expected cash proceeds toward its roughly $13 billion debt. This buys Tribune Co. more time to implement plans to turn around the business.
Tribune is also working on the sale of its Chicago Cubs baseball team, writes the Wall Street Journal.
Having snared Newsday from Tribune Co., Cablevision broadly outlined plans to make the paper more profitable by boosting circulation and giving advertisers more effective ways to reach audiences.
The company plans to better market the newspaper to households in the areas it serves, and offer advertisers a selection among media outlets.
Cablevision’s chief, James Dolan, acknowledged yesterday that he is not a “newspaper man,” but says his company’s purchase of the newspaper will help bolster its long-term outlook. “We weren’t looking to purchase it and then cut costs,” he is quoted as saying in Newsday. “We were looking to build a business.”
Cablevision beat out a $580 million offer from both New York Post owner News Corp. and New York Daily News owner Mort Zuckerman. Both companies had hoped to cut costs by combining operations.
The company faces an uphill battle proving to investors that a purchase of a newspaper is not a losing venture, saysJessica Reif Cohen, an analyst at Merrill Lynch, in a note to investors.
Other observers, like Kevin Kamen, chief executive of media appraisal firm Kamen & Co., predicts Cablevision will be able to boost circulation by about 100,000, because it serves so many more households in Long Island and New York City than Newsday. Increased circ would lead to increased advertising rates.
Cablevision is also close to an agreement to buy the Sundance Channel in a cash and stock deal valued at nearly $500 million, according to people close to the situation.