Cablevision wins Newsday, plans growth
Newsday may be able to expand its audience, thanks to a $650 million agreement between Cablevision Systems Corp. and Tribune Co. that has given Cablevision a 97% stake in the Long Island daily.
The deal, which should be completed by the end of July, includes Newsday, Newsday.com, free New York City daily AmNY, weekly shoppers from the Star Community Publishing Group and lifestyle magazines by Island Publications. Cablevision should be able to efficiently market Newsday subscriptions with its direct reach into hundreds of thousands of Long Island homes and plans to push Newsday Media Group's online assets to its 2.3 million high-speed Internet subscribers. In another marketing perk, Cablevision can use calls for new cable connections to identify new movers in Long Island.
“Adding Newsday Media Group's superb assets to Cablevision's portfolio presents a multitude of opportunities: to provide consumers with additional quality content on multiple platforms; expand advertising opportunities for both entities; and attract a larger audience than either company could on its own,” James Dolan, president and CEO of Cablevision, said in a statement.
“The newspaper has a unique circulation base and a tremendously strong local brand — I expect them to grow and flourish as a result of this new partnership," added Sam Zell, CEO and chairman of Tribune Co.
The benefits, of course, work both ways. Cablevision can leverage Newsday outlets — particularly AmNY — to promote its live sports and entertainment assets, which include Radio City Music Hall, Madison Square Garden, and the New York Rangers, Knicks and Liberty. As of September 30, 2007, Newsday had an average weekday paid circulation of 387,503, and AmNY currently boasts an average weekday circulation of 335,000. Newsday Interactive, a suite of Web sites including Newsday.com and ExploreLI.com reported 3.2 million unique visitors in March.
Adding print products and new sites to Cablevision's media portfolio should help both companies in the eyes of advertisers, who will be able to select specific channels for their messages. Executives also expect classified sales to benefit, noting synergies between Cablevision's Optimum Homes and Optimum Autos interactive television classified services and Newsday's Star shopper editions.
Banc of America Securities LLC served as lead financial advisor to Cablevision in the deal, and Merrill Lynch & Co. also provided financial advice. Tribune received financial advisory services from Citi.