April 29, 2008 / 2:17 PM / 11 years ago

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 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 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), 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.

TABLOID DOMINANCE

Murdoch, whose company also owns the money-losing New York Post, has long battled Zuckerman for dominance of the New York tabloid market.

Murdoch’s offer would form a joint venture that would allow him to combine the back-office operations of Newsday and the Post. Tribune would retain a small percentage of the paper to defer a tax hit if it sold Newsday outright.

Cablevision and the Dolans would be adding the newspaper to a stable of metro-area properties that include the Madison Square Garden sports and entertainment complex in the heart of Manhattan.

Newsday was not expected to come up for sale when real estate tycoon Sam Zell took Tribune private last year in an $8.2 billion buyout. He eventually put it on the block to help pay down billions of dollars in debt from the deal as Tribune revenue shrinks.

Newsday reported on Tuesday that Murdoch had engaged former Republican New York Sen. Alfonse D’Amato to help smooth the way for a deal by making introductory phone calls to Nassau County Executive Thomas Suozzi and Republican Congressman Peter King.

D’Amato’s lobby group, Park Strategies Washington Group LLC, is listed as a lobbyist for News Corp, Newsday reported.

King confirmed that Murdoch called him more than a week ago and said that he would appreciate “any assistance I could give him” locally or in Washington.

“I think it would be a tremendous step in the right direction,” King told Reuters. “He has the financial ability to really keep Newsday afloat, really make it a dynamic paper.”

King said he was not choosing one group over another, but added that he has not spoken with the Dolans or Zuckerman.

Suozzi did not return an e-mail message seeking comment. A News Corp spokeswoman declined to comment.

NBC Universal is majority-owned by General Electric Co(GE.N) while France’s Vivendi (VIV.PA) holds a stake.

Cablevision closed down 12 cents at $23.08 on the New York Stock Exchange on Tuesday. (Additional reporting by Yinka Adegoke, editing by Dave Zimmerman, Gerald E. McCormick and Toni Reinhold)

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