Rupert Murdoch, whose News Corp. last week seemed to have the inside track to acquire the Long Island newspaper Newsday, has decided not to raise his bid to match a reported $650-million offer from Cablevision Systems Corp., according to a person familiar with the situation.
Even so, Tribune Co.'s informal auction of its third-largest newspaper has been surprisingly spirited, considering that newspapers have been suffering through one of the worst advertising recessions in history. Bids have come from "three viable competitors," each of which would structure its offer to avoid triggering a large capital-gains tax bill for Tribune, said another person acquainted with the bidding. Tribune could decide among the offers as early as next week, that person said.
Besides Cablevision, the Long Island cable-TV company, and News Corp., owner of the Wall Street Journal and the New York Post, a bid has come from Mortimer Zuckerman, owner of the New York Daily News.
After Zuckerman matched Murdoch's $580-million bid last week, Newsday reported that Cablevision topped them both late Thursday with an offer valued at $650 million.
Murdoch's refusal to pay more was first reported by the Associated Press.
Chicago-based Tribune also owns the Los Angeles Times, KTLA-TV Channel 5, the Chicago Tribune, the Chicago Cubs baseball team and other newspapers and TV stations around the country.
The company is struggling under debt incurred in December's $8.2-billion buyout, led by Chicago real estate tycoon Sam Zell. Tribune hopes to get at least $550 million in cash from the Newsday sale and use it to retire debt.
Owning Newsday could tip the scales in the costly tabloid war between Murdoch's Post and Zuckerman's Daily News by allowing the new owner to spread printing, distribution and back-office costs over a larger circulation base.
For Cablevision, the attraction apparently is the chance to dominate the Long Island suburbs in both print and TV advertising and perhaps to combine the news-gathering forces of Newsday and Cablevision's News 12 regional news channel.