Posted on 03/20/2008 2:34:48 PM PDT by abb
Rupert Murdoch may not be done expanding his newspaper empire. The News Corp. chairman, who’s still digesting Dow Jones & Co., is now believed to have set his sights on Newsday.
According to one newspaper industry insider, the company has made a bid for Tribune Co.’s Long Island paper. Newsday also owns amNew York, a daily tabloid handed out free in New York City.
Talk of the bid has surfaced at the same time that Tribune’s new Chief Executive Sam Zell has said that an advertising downturn has forced him to consider selling off company assets. Additionally, Standard & Poor’s Ratings Services lowered its corporate credit rating on the media company to B- from B this week.
In a press release issued Thursday announcing Tribune’s fourth quarter results, Mr. Zell reiterated that the company has “begun a strategic review” of Tribune assets, a sentiment he expressed to Baltimore Sun employees last week.
“Our goal when we started this adventure was to keep all the assets together,” he said to the employees. “We also started with the assumption that print [advertising] would be down two or three percent this year, not 18%.”
Newsday had advertising revenue of $480 million in 2007, down 8% from the prior year, according to TNS Media Intelligence.
Mr. Murdoch has long had an interest in Newsday. A year ago, around the time that Tribune was exploring a sale of the entire company, he tried to establish a joint operating agreement between the Tribune paper and News Corp.’s New York Post. He told analysts and others that the agreement would create “a very, very powerful combination for advertisers” and turn the money-losing Post into a viable business “in five minutes.”
Tribune, however, was not interested in deals involving individual papers and accepted an $8.2 billion buyout offer from Mr. Zell that relied almost entirely on debt.
Mr. Murdoch went on to spend $5.6 billion on Dow Jones. The media baron also purchased community newspaper chains in Brooklyn, Queens and the Bronx to buttress the Post’s reach in the city’s neighborhoods.
Media observers say a deal would make sense for both sides.
“Why wouldn’t Zell sell Newsday, if it could be a de-leveraging event?” said an investment banker who has worked on newspaper deals.
He added, “News Corp. has the New York Post and the Wall Street Journal. It could start to monopolize New York.”
Tribune is currently working on a sale of the Chicago Cubs, the baseball team’s home stadium, Wrigley Field, and a stake in a cable sports channel. In addition to Newsday and the Sun, Tribune’s string of daily newspapers includes the Los Angeles Times and the Chicago Tribune. It also owns television stations, including WPIX in New York.
Citing company policy, a Tribune spokesman declined to comment on a possible News Corp. bid for Newsday.
A News Corp. spokesman said he knew nothing about any bid for Newsday.
Separately, on Thursday, the three-month old PageSix.com, a key News Corp. online brand extension to the Post was shuttered and all 18 employees were let go, with three re-assigned back to the Post.
ping
Hey Rupert want it go for it
Maybe Murdoch will end up with Tribune Co. as well.
And he won’t have to pay very much for it. GraveDigger Zell is over a barrel. The GraveDigger borrowed sackfulls of money to buy out the Chandler Clan and now can’t make the interest payments.
Meanwhile, Rupert’s sitting on piles of cash that needs to go somewhere. I don’t know if you realize it, but Rupert paid for Dow Jones with sofa cushion change.
Here’s how much cash Rupert’s sitting on now:
Cash Flow Statement
Fiscal Year Ended 06/30/07
Net Cash Flow from Operating 4,110.00
Net Cash Flow from Investing -2,076.00
Net Cash Flow from Financing -273.00
Cash or Equivalents at Year Start 5,783.00
Cash or Equivalents at Year End 7,654.00
Net Change in Cash or Equiv 1,871.00
Since that balance sheet was put out, he spent between $4 and $5 billion for Dow Jones. And he didn’t have to finance a thin dime for it. He just wrote a check.
He’s taking dead aim at the Daily News..They fold..and he OWNS the tabloid market in the greater NY area..smart guy..
Here’s the link to NewsCorp.
http://phx.corporate-ir.net/phoenix.zhtml?c=80133&p=irol-fundHighlightsA
http://online.wsj.com/article/SB120605271913453073.html?mod=googlenews_wsj
Tribune Considers Sale of Newsday
By SAM SCHECHNER
March 20, 2008 6:48 p.m.
Tribune Co., facing rapidly worsening ad conditions in the newspaper industry, is contemplating the sale of Long Island newspaper Newsday, according to a person familiar with the situation.
Among companies considering a bid is Cablevision Systems Corp., the Long Island-based cable operator, said people familiar with the situation. Separately, News Corp. is in talks to combine production operations of Newsday with those of its New York Post title, one of the people said. News Corp. also owns The Wall Street Journal. Tribune declined comment.
The talks come three months after Tribune was taken private in an $8.2 billion buyout that left the company struggling under a heavy debt load. The deal also put Chicago real-estate magnate Sam Zell in charge of Tribune, whose properties include the Los Angeles Times, Chicago Tribune and the Baltimore Sun as well as Newsday and a string of television stations.
Mr. Zell had been expected to look for ways to cut costs, although that effort may be intensifying among signs that the newspaper ad market is worsening. In the past week, several newspaper companies have reported sharp declines in February ad revenue. Separately, Tribune reported a fourth-quarter loss of $78 million, with newspaper ad revenue falling 15%.
snip
Yeah, that’s what I’m thinking. Zell took his chances and things are not working out. He’ll likely find a way to carve out some prime real estate and dump the rest.
““I have been trying to instill a sense of urgency among you all,” Zell said in a “dear partners” e-mail memo to Tribune employees today. He exhorted them to “get together with your colleagues, and fight to improve our performance.”
Zell sent that message to the Trib’s whacked out meditots.
Now Rupert is setting on a ton of cash and is looking for an investment as Ken5050 points out:
“He’s taking dead aim at the Daily News..They fold..and he OWNS the tabloid market in the greater NY area..smart guy..”
Life is good for our side!
“
Come think of it with News corp has most higest rating show AMERICAN IDOL hey some people watch that show
BESIDE Rupert has big internatinoal organization like Sky news and Sydeny Morning Herald too
You are so right Zell borrow ton of jack from Chandlers family to buy LA TIMES
http://www.latimes.com/business/la-fi-tribune21mar21,1,1353277.story
From the Los Angeles Times
MEDIA
Tribune said to be in talks to sell Newsday
News Corp. seeks to buy the Long Island newspaper as its owner tries to pare debt and posts a $78.8-million loss in the fourth quarter.
By Thomas S. Mulligan
Los Angeles Times Staff Writer
March 21, 2008
NEW YORK — At a time when newspapers’ fortunes are tanking, Rupert Murdoch’s News Corp. is stocking up on them. The media giant, which last year bought Dow Jones & Co., parent of the Wall Street Journal, is negotiating with Tribune Co. about adding Long Island-based Newsday to its fold, according to a person familiar with the situation.
snip
Tribune’s bonds have had their ratings cut and have declined precipitously in value, reflecting investors’ view that there is a rising risk of default. At the current rate of deterioration, Tribune probably would violate bank covenants regarding debt-to-cash-flow ratios by early 2009, Standard & Poor’s bond analyst Emile Courtney said.
Tribune, in a regulatory filing Thursday, announced a $78.8-million fourth-quarter loss because of falling advertising revenue, higher interest expenses and a number of one-time charges arising from the buyout. The loss contrasts with profit of $233 million from continuing operations in the year-earlier fourth quarter. For all of 2007, Tribune reported net income from continuing operations of $55 million, compared with $661 million in 2006.
Zell, Tribune’s chief executive, said in a statement accompanying the earnings report that management had “begun a strategic review of certain Tribune assets” to help decide whether to sell properties and put the money into core operations or use it to pare down debt. He did not identify any of the assets being reviewed.
snip
http://www.nytimes.com/2008/03/21/business/media/21paper.html?ref=business
March 21, 2008
Three New York Moguls in Talks to Buy Newsday
By TIM ARANGO and RICHARD PÉREZ-PEÑA
Three of New York’s biggest moguls are in discussions to buy Newsday, the Long Island newspaper, from the Tribune Company, people involved in the sale process said Thursday.
The three interested bidders are Rupert Murdoch, chairman of the News Corporation, owner of The New York Post; Mortimer B. Zuckerman, the real estate developer and publisher who owns The Daily News, The Post’s tabloid rival; and James L. Dolan, whose family controls Cablevision, the cable television operator, these people said.
The sale process, which is described as a soft auction in which investment bankers are approaching a selected number of buyers, involves several possible kinds of deals.
Mr. Murdoch, for example, is considering a deal that would be structured as a joint venture between The Post and Newsday, that would combine the back-office operations of the two papers. None of the people involved in the auction would be identified because of the confidential nature of the talks.
On the seller’s side, Tribune made public its 2007 results Thursday, showing why it is eager to unload assets. The company, which has been controlled by Samuel Zell, the Chicago real estate magnate, since the end of last year, reported a loss of $78.8 million for the fourth quarter, compared with a $239 million profit in the year-earlier quarter. For the full year, it reported a profit of $86.9 million, down from $594 million.
The company’s newspapers, which include The Chicago Tribune, The Los Angeles Times and The Orlando Sentinel, are losing ad revenue even faster than the industry as a whole, in part because of their heavy exposure to the struggling California and Florida real estate markets.
snip
“Five years ago, I might have said a billion,” he said, “but it’s been a rough five years in that business.”
Analysts say that Newsday illustrates the paradox Tribune faces: The best way to raise cash to meet short-term demands is to sell the very same properties the company would want to keep in the long run because they generate healthy profits. ('fire sale')
http://www.nypost.com/seven/03212008/business/news_corp__mulls_alliance_with_newsday_102929.htm
NEWS CORP. MULLS ALLIANCE WITH NEWSDAY
By KEITH J. KELLY
March 21, 2008 — News Corp. is in talks with Sam Zell to explore a possible strategic alliance with Newsday, sources close to the situation said.
snip
http://www.newsday.com/business/ny-bzmurd0321,0,303300.story
Reports: Murdoch among bidders for Newsday
By DANIEL WAGNER | daniel.wagner@newsday.com
8:04 PM EDT, March 20, 2008
Chicago-based Tribune Co., struggling with declining revenues and crunching debt, may be getting ready to sell Newsday, according to media reports.
snip
Good.
Maybe Rupert can help Zell and buy NewsDay.
Mar 20 2008 6:04PM EDT
Breslin on Murdoch Buying ‘Newsday’: Who Cares?
Breslin knows it takes money to buy his booze.
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