UPDATE 4-Cablevision may make joint bid for Newsday-source

(Adds comment from Rep. Peter King)

By Jui Chakravorty Das and Robert MacMillan

NEW YORK, April 29 (Reuters) - Cablevision Systems Corp (CVC.N: Quote, Profile, Research) may make a joint bid for Long Island newspaper Newsday that would match or top rival offers of about $580 million from media titans Rupert Murdoch and Mortimer Zuckerman, a source familiar with the matter said on Tuesday.

Cablevision is considering a bid with Jared Kushner, owner of the New York Observer newspaper, the source said, speaking on condition of anonymity. Kushner approached Cablevision a couple of weeks ago about making a joint bid to buy Newsday from Tribune Co, the source said.

Newsday is for sale at a time when newspapers are commanding low prices because of shrinking advertising sales and declining profits. Still, it has provoked a bidding war between News Corp (NWSa.N: Quote, Profile, Research) chief Murdoch and New York Daily News owner Zuckerman, who want to give advertisers a way to reach wealthy residents on Long Island and to cut their printing costs.

Cablevision, which previously had decided to steer clear of buying the newspaper, could soon make a decision about whether to bid for it, the source said.

Cablevision and Kushner have not ironed out details of how their offer would be structured, according to the source.

Separately, Cablevision, based on Long Island, is also close to buying the Sundance channel, the venture of CBS Corp (CBS.N: Quote, Profile, Research), NBC Universal and Sundance founder Robert Redford, for about $400 million to $500 million, a source briefed on the matter said.

A spokesman for Cablevision, which is controlled by the Dolan family, declined to comment.