For a business supposedly on the edge of extinction, newspapers attract an odd assortment of newcomers eager to get in on the game. Real Estate billionaire Sam Zell bought Tribune last year, marking fresh blood coming into the newspaper and broadcasting biz. Now, as Zell sells off some chunks of Tribune to to pay down debt, it would appear another new player is poised to enter the game.
According to this story, NYC based Cablevision has beat out Rupert Murdoch for the Daily News. Unlike the Murdoch deal, this would not implicate any FCC rules and should not raise too many hackles on the antitrust side. Arguably it has an impact on the local advertising market, but hardly enough to make a difference. Besides, I’m not sure if there is any evidence that the newspaper advertising market and the cable advertising market are related.
What is more interesting is “why does Cablevision want Newsday at all? And should I care?” Cablevision has in the past tried to break out of its main business as a cable operator and dabbler in cable programming and owner of various sports venues and franchises. At various points, it has tried to launch a satellite service and was a bidder in the last two major FCC spectrum auctions (coming away empty handed both times). Is this a toe in the water to go into the newspaper business or a more limited foray?
It is interesting to note that a few years ago, Cablevision was sued by the Jets over an alleged effort to block the Jets from building a sports stadium that would compete with those owned by Cablevision. Among the charges, the Jets claimed that Cablevision routinely gave its own front group free advertising time on its cable systems to drum up support against the Jets’ stadium effort, while refusing to sell advertising time to the Jets for pro-stadium advertising. Owning Newsday will certainly give Cablevision a bit more political clout in its backyard should it find itself wanting to lobby local government again. While I don’t think that’s the primary reason for Cablevision buying Newsday, it does make for an attractive bonus from Cablevision’s perspective.
Unfortunately, I think only DOJ or the FTC will examine the acquisition. It doesn’t trigger either FCC rules or local franchise review. But this sort of impact on the diversity of news sources and the ability to leverage ownership of different media assets for political gain falls outside antitrust review — even in an administration that cares about antitrust. So for better or for worse, barring some new bidder emerging, I expect the deal to sail through easily.
Stay tuned . . . .