Cablevision Buys Long Island’s Newsday

Cablevision Systems Corp. is spending $650 million to buy the Long Island newspaper Newsday. It beat out bids by Rupert Murdoch’s News Corp. and a bid from rival New York paper The Daily News. For the money, Cablevision gets 97% control, while Tribune retains a 3% stake and some real estate assets. But is it a good deal?

Newsday publisher Tim Knight said, “The possibilities are unlimited as these two Long Island media companies join forces to create new ways of delivering exceptional editorial content, with deep knowledge of and commitment to Long Island and New York. We will use new approaches to serve our audiences and the advertisers who want to reach them even more effectively in this increasingly digital world.”

Charles Dolan, Cablevision's founder and chairman, said, “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. 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.”

Tom Rosenstiel, director of the Project for Excellence in Journalism, a DC-think tank, explained the business logic behind the move. “Being owned by an Internet service provider company opens up a range of options for a newspaper to generate revenue from people accessing the Internet. Revenue from the Internet service can go to underwrite the content.” For example, Cablevision could offer joint media buys to advertisers. Moreover, Cablevision just bought the Sundance Channel for $496 million.

However, not everyone sees these as wise moves. Craig Moffett, an analyst at Sanford C. Bernstein & Company, told the New York Times, “We’ve seen this movie before. Even if you squint hard enough to justify these deals, it isn't what shareholders signed up for.” And remember, this is the same Cablevision crowd that let Isiah Thomas screw up the New York Knicks basketball team (which Cablevision owns). Time will tell if this is a merger of the old and new media or whether it’s a case of more money than sense.

© Copyright 2008 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent. Produced using Fedora Linux.

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