Cablevision (CVC) Systems Corp. accused New York Daily News Publisher Mort Zuckerman of “a campaign of intimidation and extortion” to bring about a merger of his newspaper with Cablevision’s Newsday.

The accusations follow a Daily News story yesterday claiming the National Basketball Association’s New York Knicks knew about the severity of point guard Jeremy Lin’s knee injury and hid it to ensure the sale of playoff tickets.

Zuckerman’s paper ran the story to “provoke” Cablevision after “repeated overtures” to merge the Daily News with Newsday were rejected by Cablevision Chief Executive Officer James Dolan, according to the statement. Dolan also is chairman of Madison Square Garden Co., which owns the Knicks.

“Mr. Zuckerman’s attempts to parlay this into a favorable arrangement for himself could not be more misguided,” Dolan said in the statement.

Cablevision said Zuckerman made his merger proposal at a March 6 lunch with Dolan at New York’s Four Seasons restaurant and quoted Zuckerman as saying “the bad press would end if we became joint owners.”

Zuckerman was traveling and unavailable to comment yesterday on the Cablevision statement, according to Clare Probert, his executive assistant. Zuckerman also is chairman of real estate investment trust Boston Properties Inc. (BXP)

Cable Operator

Cablevision owns 97.2 percent of Newsday Holdings LCC, which operates the New York-area daily newspaper, according to company filings. The Bethpage, New York-based company is the fifth-largest U.S. cable system operator.

Newsday, based in Melville, New York, posted operating losses of $31.7 million in 2011 and $12.6 million in both 2010 and 2009, according to company filings.

The Daily News article about Lin is “completely inaccurate,” Madison Square Garden said in the statement.

“The suggestion that the timing of Jeremy Lin’s injury report is in any way connected to a longstanding Knicks playoff ticket deadline is a malicious attack,” Madison Square Garden said.

Colin Myler, editor in chief of the Daily News, said in a statement yesterday that there has been “no more supportive a newspaper than the Daily News about Lin’s superb performances with the Knicks. As always, we will continue to report in a fair and independent editorial manner.”

To contact the reporter on this story: Alex Sherman in New York at asherman6@bloomberg.net

To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net