Tribune Co.’s bid to unload Newsday appears to be turning into a fight between Rupe vs. Mort.
Just as it looked like Rupert Murdoch’s News Corp. was closing in on a $580 million deal last week with Tribune to buy the majority of Newsday, New York Daily News owner Mortimer Zuckerman is understood to have submitted a rival bid for the Long Island newspaper.
Zuckerman’s bid is said to match the $580 million pricetag that News Corp. has offered for the paper, according to the Wall Street Journal. Zuckerman’s offer hinges on the uncertainty about whether News Corp. can quickly close a deal with Tribune, while a Zuckerman buyout of Newsday would be unlikely to draw federal regulatory scrutiny.
Murdoch’s bid to grab still more Gotham media real estate would undoubtedly command the attention of antitrust legal eagles at the Justice Dept. and at the Federal Communications Commission.
Tribune is eager to cut a tax-friendly deal involving Newsday to help the company whittle down the more than $10 billion in debt with which it was left after going private late last year through a complex employee-ownership transaction led by real estate mogul Sam Zell.
Reps for Zuckerman and Tribune declined comment Sunday. Industry observers expect Tribune to move quickly this week in settling the fate of Newsday.
News Corp. and Zuckerman are going after Newsday for similar strategic reasons, namely to consolidate administrative and back-office functions and better amortize operating expenditures for News Corp.’s New York Post and Zuckerman’s Daily News, respectively. Newsday is also attractive to both moguls because the paper’s core, affluent Long Island readership base does not overlap all that much with the Post’s or Daily News’ Gotham-centric readership.
The complication to News Corp.’s bid comes because it faces pending license renewals for its two New York TV stations, WNYW and WWOR. With News Corp.’s Gotham portfolio now comprising those two VHF stations, the Post as well as the Wall Street Journal, the FCC and Justice Dept. could conceivably take steps to force some divestitures if the conglom aims to bring Newsday into the fold as well.
The election-year mood among solons on both sides of the aisle in Washington is already running decidedly against Big Media and further relaxation of the FCC’s media ownership rules. To wit, the influential Senate Commerce Committee took the first step last week toward undoing the FCC’s vote in December to relax the longstanding rule that banned a single entity from owning a newspaper and TV station in the same market (Daily Variety, April 25).
News Corp. has been allowed to own the New York Post and its TV stations under a longstanding waiver from the FCC. The changes to the newspaper-station ban that the FCC approved in December provided some relief for Murdoch with regard to his purchase of the Journal, as well as for Tribune, which had waged a long legal fight against the cross-ownership ban. (Tribune owns Newsday and WPIX-TV New York and the L.A. Times and KTLA-TV Los Angeles.)
But the FCC’s December policy shift immediately brought legal challenges from media watchdog orgs. Thursday’s action by the Senate Commerce Committee indicates that lawmakers are also taking a dim view of the FCC’s move.