The owner of the New York Daily News offered $580 million to acquire Newsday from Tribune Co., matching a bid earlier in the week by Rupert Murdoch’s News Corp, The Associated Press was told.
A person familiar with the situation, who asked not to be identified because of the confidential nature of the offer, confirmed that real estate developer Mortimer Zuckerman offered $580 million to buy the Long Island daily late Friday.
The source said the deal involved a “significant amount of cash and other considerations,” but would not provide further specifics.
Zuckerman’s Daily News is the rival tabloid to Murdoch’s New York Post.
News Corp., which also owns The Wall Street Journal, offered $580 million for Newsday in a surprise move earlier this week. Reports had characterized the deal as being near completion.
Spokesmen from Tribune and News Corp. each declined any comment.
Tribune’s new chief executive, Sam Zell, confirmed on a conference call last week that he was considering selling Newsday, a reversal of his original plan to keep Tribune’s core businesses largely intact.
Zell said he had been approached by several suitors for what is one of Tribune’s largest papers and was considering a sale amid a rapid decline in revenues in the past several months.
Tribune added a heavy load of $8.2 billion in debt as part of a going-private transaction that Zell orchestrated and closed last December.
For Murdoch, gaining Newsday would allow News Corp. to cut the persistent losses at the Post by combining back-office and production operations.
The Post and Daily News circulate mainly in the New York City area, while Newsday is read mostly in neighboring Long Island. That would offer either bidder the potential of selling advertisers a broad reach of readers in a single ad buy.
It is widely thought that any News Corp. deal would be met with scrutiny by regulators and consumer groups concerned that Murdoch’s company would be getting too much control over the New York media market, where News Corp. also owns two local television stations.
Andrew Jay Schwartzman, president of the nonprofit advocacy group Media Access Project, said a News Corp. deal would face “vociferous opposition” from citizens’ groups and others “concerned about preserving diversity in the marketplace of ideas.”
He said his group would find Zuckerman’s ownership of Newsday “much more attractive.” Not only would it prevent Murdoch from increasing his hold in the area, it would “break up the existing newspaper-broadcast combination that Tribune has.” The company owns CW11 WPIX in New York.
Zuckerman would face the same Department of Justice antitrust review as News Corp., but Schwartzman said it is unlikely either offer would face tough scrutiny.