Newsday Coulda Been a Contender

Sam Zell may sell the New York area paper. But it missed its big chance years ago

Jon Fine

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Tim Bower

A long time ago—around 20 years, to be more precise—a newspaper named Newsday was feeling its oats. It had a lock on the booming New York suburbs of Long Island. It was owned by the indulgent Times Mirror chain. It had done what was pretty unthinkable for a suburban newspaper: expanded into the nearby metro, in 1985, with New York Newsday. A consultancy's study on that edition's prospects, according to former executives there, concluded that its tabloid competition in New York, the Daily News and the New York Post, both had unsteady holds on the market. The News, whacked by labor woes and years of mismanagement by then-owner Tribune Co., attained the neat trick of being unprofitable while being the largest daily in America; Tribune had tried, and failed, to find someone to take the paper off its hands for free. The Post was owned by an Aussie upstart named Rupert Murdoch; while the study assumed he'd underwrite losses in New York as long as he was able, it's worth recalling his empire was far smaller and less secure than it is today. Much of the city, as improbable as it sounds today, could have been Newsday's.

Newsday's New York City play came when newspapers could afford to be ambitious. (In the '80s and '90s, the Times Mirror flagship Los Angeles Times pursued multiple attempts at national and regional expansion.) But no coup de grâce came, even as the News and the Post reeled through years of urban soap operas, near-death experiences, and multiple owners. Times Mirror's appetite for investment was significant; previous reports say that New York Newsday lost around $100 million in aggregate over its life span, which averages out to roughly $10 million a year.

But hell, for a long time, if Murdoch lost $10 million in a year on his Post—or more recently the Times of London, the parent unit of which lost a vertigo-inducing $90 million in 2005—well, that was a better-than-average performance. Observers are left to ponder what might have been had Times Mirror spent more aggressively when the News was tottering—or had the stomach to stare down regulators and tough out certain local uproar by buying either the News or the Post when either could have been had for a song.

Once none of that happened, the Newsday narrative arced sharply downward. Times Mirror closed New York Newsday in 1995 and was itself sold to Tribune in 2000. Tribune got sold to Sam Zell last year; Zell now mulls selling Newsday. Among the suitors: Daily News owner Mort Zuckerman and Murdoch. Now, it was never certain that a full-on New York invasion by Newsday would have succeeded, and I type the following sentence with trepidation, since most media companies need to be dissuaded from wanton ambition, not encouraged in it. But Newsday's experience proves that the opportunities you eye, but ignore, can one day end up eyeing you. From a much different perspective.

It's just three months after his extremely leveraged deal for Tribune closed, and Sam Zell is hitting heavy weather. This time last year, newspaper execs at the nation's largest dailies were stunned at revenue declines of around 8% or so; this year they're stunned by declines twice as bad. Hence the situation with Newsday (for which I wrote a freelance column between 1995 and 1998). The things that made it golden in the '80s and '90s—that it owned an affluent market moated on three sides by the Atlantic Ocean and Long Island Sound, and that it was near New York but not of it culturally—now make it the Tribune paper likeliest to command an ego premium. The last reliable X Factor for an American newspaper is at play. "The best place to be in America with a newspaper is to have one that Rupert Murdoch wants," observers a mordant senior industry executive.