Cablevision submits $650 mil bid for Newsday

Offer tops rivals Murdoch, Zuckerman

NEW YORK -- Cablevision Systems Corp. has made a $650 million bid for Tribune Co's Newsday newspaper, topping rival offers from media titans Rupert Murdoch and Mortimer Zuckerman, a source briefed on the matter said on Friday.

Murdoch's News Corp. and Zuckerman's New York Daily News newspaper have made separate offers of $580 million for Newsday, sources have previously told Reuters.

News Corp. plans to stick by its original bid, another source familiar with the talks said on Friday.

Long Island-based Cablevision, owned by the Dolan family, was considering a joint bid with Jared Kushner, owner of the New York Observer newspaper, but decided to go solo just a few days ago, the source said.

The Cablevision offer includes a joint venture that would allow Tribune to keep a small stake in Newsday to avoid capital gains taxes, the source said.

Cablevision and News Corp. declined to comment on the matter. Tribune was not immediately reachable for comment.

Real estate tycoon Sam Zell took Tribune private last year in an $8.2 billion buyout that restructured the publisher as an employee-owned company, saddling it with more than $10 billion of debt.

Newsday is for sale at a time when newspapers are commanding low prices because of shrinking advertising sales and declining profits.

Still, it had provoked a bidding war between Murdoch and Zuckerman, who want to give advertisers a way to reach wealthy residents on Long Island and, at the same time, cut their printing costs.

For Cablevision and the Dolans, a deal would add Newsday to a stable of metro-area properties that include the Madison Square Garden sports and entertainment complex in the heart of Manhattan.

Reuters previously reported that Murdoch's bid was also a joint venture that would leave a small percentage of Newsday in the hands of Tribune in order to defer the tax hit that Tribune would take if it sold the paper.

Murdoch's offer would form a joint venture that would allow him to combine the back-office operations of Newsday and News Corp's money-losing New York Post newspaper, sources have said.