Cablevision Systems, the New York-area cable provider has agreed to buy Newsdaynewspaper from the Tribune group in a transaction valued at $650 million, to expand local advertising on Long Island.
Cablevision will pay Tribune $612 million for a 97 per cent stake in
Newsday, plus an additional $18 million in prepaid rent for some facilities, the companies said in a statement today.
Tribune will keep a remaining 3 per cent stake worth $20 million. The sale helps Sam Zell pay down the $13 billion in debt he acquired through his takeover of Chicago-based Tribune last year.
The purchase price topped bids of $580 million each by Rupert Murdoch's News Corp and Mortimer Zuckerman, owner of the
New York Daily News. News Corp dropped its bid on May 10th, saying a purchase was no longer economical.
Cablevision said last week that it wouldn't rule out more acquisitions beyond cable after announcing plans to build a high-speed wireless network and purchase the Sundance Channel for independent films.
The New York-based company also owns Madison Square Garden and the New York Knicks basketball team.
Cablevision, led by Chairman Charles Dolan and his son, Chief Executive James Dolan, said in today's statement that they will use Newsday to generate "substantial operating cash flow" as they expand in local advertising and subscription businesses.