US: Tribune close to selling Newsday to News Corp
Posted by Carolyn Lo on April 23, 2008 at 11:45 AM
A source reveals that Tribune Co. is very close to selling Long Island based Newsday to Rupert Murdoch's News Corp for about $580 million.
The terms state that "Newsday would be part of a joint venture with News Corp's money-losing New York Post, allowing the two publications to combine back office operations", the source said. The Wall Street Journal said the deal "is expected to wipe out as much as $50 million in annual losses that News Corp now incurs on the Post."
News Corp would own most of the company, while Tribune would retain a very small part but would receive "anywhere between $500 million and $600 million", under News Corp's terms.
Selling Newsday would help Tribune chief executive Sam Zell cut debt at the company, which is over $10 billion.
"The combined operation would be profitable," newspaper analyst John Morton said. "There would be some administrative and production cost savings but the real goal would be to combine the advertising appeal and sell that jointly for advertisers that want both Long Island and New York City coverage."
Analysts said "a combined operation would also place News Corp's New York Post in a much stronger position against [the New York Daily News]."
Mortimer Zuckerman, owner of the Post's newspaper rival, the Daily News, is reportedly planning to submit a new, formal bid by the end of the week for Newsday.
Because the U.S. government restricts the number of papers that media companies can own in markets where they also own television stations, the deal could be hindered with Murdoch owning The Wall Street Journal and Fox affiliate WNYW-TV, in addition to the Post.
Source: Reuters
The terms state that "Newsday would be part of a joint venture with News Corp's money-losing New York Post, allowing the two publications to combine back office operations", the source said. The Wall Street Journal said the deal "is expected to wipe out as much as $50 million in annual losses that News Corp now incurs on the Post."
News Corp would own most of the company, while Tribune would retain a very small part but would receive "anywhere between $500 million and $600 million", under News Corp's terms.
Selling Newsday would help Tribune chief executive Sam Zell cut debt at the company, which is over $10 billion.
"The combined operation would be profitable," newspaper analyst John Morton said. "There would be some administrative and production cost savings but the real goal would be to combine the advertising appeal and sell that jointly for advertisers that want both Long Island and New York City coverage."
Analysts said "a combined operation would also place News Corp's New York Post in a much stronger position against [the New York Daily News]."
Mortimer Zuckerman, owner of the Post's newspaper rival, the Daily News, is reportedly planning to submit a new, formal bid by the end of the week for Newsday.
Because the U.S. government restricts the number of papers that media companies can own in markets where they also own television stations, the deal could be hindered with Murdoch owning The Wall Street Journal and Fox affiliate WNYW-TV, in addition to the Post.
Source: Reuters
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