By Ambrose Clancy
Friday, May 16, 2008
Cablevision’s James Dolan is about to become the king of Long Island media, and advertisers are planning on paying more to the monarch as a result.
The Bethpage-based cable operator’s deal to acquire Newsday for $650 million gives Dolan new toys to add to his platform of television, entertainment and Internet advertising opportunities. After the deal, print classifieds, newspaper display ads and special magazines will all fall under Dolan control, so everywhere a business turns to advertise, it will run into Cablevision.
“There’s no question ad rates in both Newsday and on Cablevision will rise substantially,” said Kevin Kamen, owner ofBaldwin’s Kamen & Co. Group Services, a media appraiser and broker that specializes in print & digital media sales. The lack of competition could lead Cablevision to up its rates as early as 12 months from now. Currently, for display ads, an average full-page Sunday ad in Newsday running in Nassau, Suffolk and Queens costs about $30,000. During the week, the same ad costs about $27,000.
A three-line classified auto ad costs $158 and runs for two weeks in the paper and online. A real estate ad with the same package comes to $828.
Cablevision also could raise rates to pay off debt from the deal.
Bob Papper, chair of the Department of Journalism, Media Studies and Public Relations at Hofstra University in Hempstead, said when one newspaper acquires another it cuts expenses by consolidating operations such as circulation and printing.
“Cablevision can’t do that,” Papper said, since the telecommunications company doesn’t have its own circulation and printing arm.
While raising prices during a down economy is considered a losing proposition, Cablevision could get away with doing so because of all its extra services.
For example, Cablevision offers advertisers a chance to cut out ad agencies.
Both Newsday and Cablevision have in-house advertising agencies that compete against independent agencies, saidEd Brennan, a partner at Rockville Centre-based advertising agency Harrison Leifer DiMarco.
“They offer, particularly to retailers, advertising and creative services so the client doesn’t need an agency,” Brennan said.
One consolidated advertising agency handling both Newsday and Cablevision could hurt local agencies, which are already struggling due to a soft local economy, Brennan said. He added that one of the key advantages of going with an independent agency is that it can negotiate favorable rates for the client.
Cablevision also offers extensive online classified advertising possibilities, such as selling cars on Optimum Auto and homes on its Optimum Homes platform. All of that could be a boon to Newsday’s Pennysaver if Cablevision leverages its classified platform to put Pennysaver ads online.
That could be bad news for Pennysaver competitor Stan Henry, who runs The Neighbor Newspapers.
“Online is here,” Henry said. “The world is going to change.”
As for Cablevision’s newfound editorial empire, Papper is cautious. He said it might not be a good idea to converge Newsday and News 12 Long Island, its television network.
Papper cited a deal in Florida, in which Media General, a communications company based in Richmond, Va., merged The Tampa Tribune with the local NBC affiliate, WFLA-TV. The parent company put everyone in the same building.
“There were visions of super-journalists going out to write a story, then do a TV story and then file it online,” Papper said. “But the parties are not playing well together.”
Asking people to change core cultures and acquire new skill sets overnight hasn’t worked in Tampa. Eight years later, the grand vision is “still very much a work in progress,” Papper said.
Ambrose Clancy can be reached at email@example.com.