Posted by: Jon Fine on May 12, 2008
Here is the one thing you need to know about the Cablevision deal for Newsday.
This publicly traded company was up against two moguls, who each owned a nearby newspaper. Both Mort Zuckerman’s and Rupert Murdoch’s respective stewardships of the New York Daily News and the New York Post have been less about business than about ego. Both had every incentive to bid ultra-high to knock out costs at their newspapers, and, possibly, knock the other guy out of the game entirely.
Cablevision outbid both, and by a pretty sizable margin.
Cablevision’s buying 97% of Newsday in a deal valued at $650 million, despite skidding profit and the long litany of ills affecting the newspaper business. (Zuckerman and Murdoch stayed around $580 million.)
Apparently Cablevision senses opportunity in bundling Newsday subscriptions with subscriptions to its Long Island-based cable systems. They may also entertain fantasies of squeezing some advantage—you can tell I’m desperately trying not to employ the word “synergy”—from its local news operations at cable channel News12, and those of Newsday itself. But if someone can point out to me one example, anywhere, of something extra being gained from bouncing stories and staff back and forth from local TV and print operations, well, I'd appreciate it. Because I can’t think of any, and most of the bigger attempts in this space have not worked out.
(For one thing, print folk tend to have faces for radio, not TV.)
Another thing to know: Murdoch apparently wouldn’t budge above $580 million. This, even though the Newsday deal is likely his last, best chance to stop the New York Post from losing tens of millions of dollars each year. (The internal thinking at News Corp, apparently, is that there’s cheaper means of saving money at the Post than laying out $650 million, not that any such means have proven particularly fruitful in the past.)
Thus Cablevision outbid the guy who’s got a history of digging deep to make knockout bids--think MySpace in 2005, and more recently Dow Jones.
No mean feat, that!
Neither is this: Newsday is now on its fourth owner since 2000: Times Mirror, Tribune, Sam Zell, and now Cablevision.