Rivals Interested in Newsday
Friday, March 21, 2008
The troubled Tribune Co. has received sudden interest from a number of rivals interested in buying the media giant's New York area newspaper, Newsday, according to a source close to the situation.
Rupert Murdoch's News Corp., which owns the New York Post; the Dolans, who own Cablevision and the New York Knicks; and Mortimer B. Zuckerman, owner of the New York Daily News, have all expressed interest, according to the source, who spoke on condition of anonymity because the talks are private.
Sam Zell, the Tribune Chairman and chief executive, said yesterday, in conjunction with the company's 2007 earnings report, that Tribune will consider selling some assets. The company, which owns the Chicago Tribune, Los Angeles Times, Baltimore Sun, several television stations and the Chicago Cubs in addition to Newsday, said yesterday that it swung to a loss of $78.8 million in the fourth quarter. It was hurt by the flight of advertisers, with newspaper ad sales down 15 percent.
The declining ad revenue also diminished the value of the Tribune papers, forcing the company to take write-downs on its 2007 report.
The company posted a profit of $239.1 million in the last quarter of 2006. Fourth-quarter revenue fell 12 percent, to $1.27 billion. For 2007, profit fell more than 85 percent from 2006, to $86.9 million. Revenue fell 7 percent, to $381 million.
Zell took over Tribune last year, turning it from a public company to a private one owned by its employees.
Murdoch had expressed interest in buying a stake in Tribune last year, when a boardroom revolt forced the company onto the block. Murdoch, who owns the Wall Street Journal in addition to the money-losing New York Post, would like to use Newsday's production and printing facilities on Long Island to lower costs at his Gotham papers.
But such a purchase, or one that combines Newsday with Zuckerman's Daily News, could raise antitrust issues.
Zell's move saddled Tribune with $13 billion in debt. The company has counted on strong cash flow to pay it down, but 2007 cash flow fell short of hopes. Zell has said that Tribune will sell the Cubs; the venerable franchise is expected to fetch at least $600 million.
Entertainment mogul David Geffen said last year that he was interested in buying the Los Angeles Times, which could bring Tribune up to $1 billion. But the Times provides Tribune with the bulk of its profit. Also, there could be a heavy tax burden associated with selling Tribune piece by piece.
Tribune declined to comment.