Deal for Newsday reflects concentration of ownership in US newspaper industry

There were three bids for the newspaper, which was recently put on the block by the Tribune Company. The Tribune went private last year in a massive $8.2 billion deal organized by Samuel Zell, a Chicago-based real estate billionaire. Zells deal left the Tribunewhich owns a number of major television stations, the Los Angeles Times and Newsday in addition to the Chicago Tribune and other papers, and the Chicago Cubs baseball teamwith a massive $12.8 billion in debt. The debt burden, added to by the downturn in the economy, is forcing Zell to sell a number of properties, including the Cubs and their stadium, Wrigley Field. Difficulty in arranging a sale of the Cubs led Zell to put Newsday up for sale.

The first bidder was Rupert Murdoch, multibillionaire owner of News Corporation, which includes the New York Post, Fox television and, since last December, the Dow Jones Company and its flagship Wall Street Journal. Murdoch offered $580 million for Newsday. If this bid had gone through, it would have given the Australian-born media tycoon three daily papers based in New York, in addition to two television stations. Zell was reportedly friendly to Murdochs bid, which was announced in late April as a tentative deal for the newspaper. Murdochs rivals complained, however, and his offer was also complicated by the need for a regulatory waiver from the Federal Communications Commission, even though the FCC last December adopted looser standards on media cross-ownership of television and newspapers in the same city.

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