"Newsday is one of the great names in the history of American journalism, and it is both an honor and privilege to return Newsday back to Long Island-based ownership after nearly 40 years," Cablevision Chairman Charles F. Dolan said in a statement. "We admire Newsday's strong editorial voice and reputation for quality as well as its leadership in print and online journalism. We are committed to maintaining Newsday's journalistic integrity and important position in the marketplace."
Weighed down by debt
Tribune, strapped with $13 billion in debt from its going-private transaction late last year, has looked to shed assets in an attempt to lessen that burden. The company is also currently shopping the Chicago Cubs baseball team. But, in Newsday, it also unloads a property that had been an enormous headache for the Chicago media conglomerate.
When it acquired Newsday in 2000 as part of its larger acquisition of Times Mirror Co., Tribune touted Newsday as the New York print hub of the only media company with television and newspaper holdings in the nation's three largest markets, a combination it hoped would lead to a windfall of cross-media ad sales.
But Newsday -- a dominant force on Long Island that a succession of owners have tried to shoehorn into a major player in the cutthroat New York City newspaper market -- never quite fit the bill as a New York City property.
In 2004, the paper became embroiled in a circulation-pumping scandal that revealed it had artificially boosted its circulation figures by upward of 100,000 daily readers. Lawsuits and arrests ensued.
And, as at most newspapers, circulation and advertising revenue have been falling steadily.
"This agreement enables us to maximize the value of Newsday and still retain an interest in this valuable asset," Tribune Chairman-CEO Sam Zell said in a statement. "The newspaper has a unique circulation base and a tremendously strong local brand -- I expect them to grow and flourish as a result of this new partnership."
Deal includes amNew York
In addition to Long Island's dominant newspaper and its related websites, Cablevision also acquires amNewYork, a free daily New York City tabloid, and a variety of targeted lifestyle and shopper publications.
But Wall Street was apparently not enthusiastic about the cable behemoth acquiring exposure to the struggling newspaper industry. Its shares were down 2.6% in morning trading following the announcement of the deal. Both Mr. Murdoch, whose News Corp. owns the New York Post, and New York Daily News owner Mort Zuckerman reportedly offered $580 million for Newsday and its affiliated properties.