By James T. Madore and Mark Harrington | Newsday Staff Writers
- 4:28 PM EDT, April 30, 2008
Cablevision Systems Corp. appears to have joined the bidding for Newsday, offering $650 million for the newspaper, or $70 million more than two other suitors, according to knowledgeable sources.
The cable giant made its interest in owning Newsday known to Sam Zell, chief executive of the paper’s parent Tribune Co. A formal bid is expected in the next few days, according to sources familiar with Zell’s talks with News Corp. chairman Rupert Murdoch.
Few details were known about the Cablevision offer except that it would be a joint venture where Tribune retains a limited ownership of Newsday to reduce capital gains tax, the sources said. They also said it was believed that Cablevision is going solo in its bid rather than partnering with the New York Observer, which had been discussed earlier.
A Cablevision spokesman declined to comment, as did one for the Observer.
The size of Cablevision’s offer got the attention of Zell, who has been enamored with Murdoch. “You cannot ignore a $70 million gain, but my guess is Rupert will top this,” said one source. Murdoch recently awarded Tribune’s San Diego television station an affiliation with his Fox Network.
Murdoch reportedly reached a handshake agreement with Zell for Newsday and its subsidiaries about 10 days ago. But a substantial increase like that expected from Cablevision would force the New York Post owner to revisit his bid. Daily News owner Mort Zuckerman also has a standing $580 million offer for Newsday.
After matching Murdoch’s bid, Zuckerman said his was more attractive because it didn’t face a high hurdle with the Federal Communications Commission.
But a source said yesterday that Zell believes Murdoch could convince regulators that owning Newsday would keep more journalistic voices in the metropolitan area by bolstering his money-losing New York Post.
“Sam has great confidence in Rupert. He thinks he can sway the FCC,” the source said.
One person closely watching the negotiations said he expects Murdoch to top any Cablevision offer.
“Murdoch wants Newsday in the worst way, so I would not be surprised this escalates to a higher number,” said Kevin Kamen, president of media appraisal firm Kamen & Co. Group Services in Baldwin.
Kamen had predicted a “low $600 million” offer from Cablevision in a Newsday story earlier this week. Now, he said, the bidding could reach $675 million or higher.
“This is a horse race now,” said Kamen, adding, “I don’t think we’ve heard the end of Zuckerman” as well.
Spokesmen for News Corp., Zuckerman and Tribune declined comment.