The proposed $580 million sale of Newsday to media tycoon Rupert Murdoch, creating a joint venture with his New York Post, could place more financial pressure on New York's other newspapers, according to analyst John Morton.
Combining Newsday with Murdoch's New York Post would allow for significant one-time cost-savings in production and administration, and probably attract more advertising dollars, said Morton, whose Silver Springs, Md. firm has kept track of the newspaper field for many years.
"The Post lack suburban circulation coverage and Newsday lacks coverage in the city, so he [Murdoch] can sell advertising to those looking to reach both audiences," said Morton.
"This deal gives the Post a significant advantage over the Daily News" said Morton. "It's not a good day for the Daily News."
Daily News owner Mort Zuckerman was one of those rumored to be interested in buying Newsday, according to recent news reports, along with Cablevision and the owners of the New York Observer.
Morton said the joint venture with Newsday could play a lesser role in Murdoch's current readership battle between his recently purchased and revamped Wall Street Journal against The New York Times. He said the Times draws a comparably small portion of its advertising and circulation from the audiences who read Newsday and the New York Post.
--Thomas Maier