Will the Tribune Company sell Newsday?

By Carol Eisenberg

March 20, 2008 at 6:23pm

Tribune Company owner Sam Zell may be entertaining bids for Newsday, the company’s Long Island paper, amid mounting financial pressures.

Citing an unnamed newspaper industry insider, Crain’s New York Business reported today that News Corp. owner Rupert Murdoch “is believed to have set his sights on Newsday.” Murdoch was reportedly interested in a joint operating agreement between Newsday and his New York Post last year. But the idea went nowhere when Sam Zell took Tribune private in a deal worth $8.2 billion.

Others expressing interest in buying the tabloid are said to include Mortimer B. Zuckerman, the real-estate developer and publisher who owns the New York Daily News, and James Dolan, whose family controls Cablevision, the cable television operator, the New York Times reported.

Talk of the possible sale of Newsday surfaced today as Tribune reported a fourth-quarter loss of $79 million. The company acknowledged it may have to sell assets as it struggles past a highly-leveraged December deal that took the company private.

The dismal results come three months after chairman and CEO Zell, a real estate mogul with no experience in the newspaper business, led a buyout of the struggling company, which owns the Los Angeles Times, the Chicago Tribune and the Baltimore Sun, among other newspapers, local television stations and the Chicago Cubs baseball team.

At the time, Zell said he planned to sell the Cubs and related assets, but wanted to keep most of the rest of the company intact. He also said that additional downsizing was not the answer to historic changes in the newspaper industry. But in the three months since, he has cut jobs, citing falling advertising revenue and a tanking economy.

Tribune said today it has “begun a strategic review of certain Tribune assets to determine whether capital can be more effectively redeployed into our core operations or toward reducing our outstanding leverage.”

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