Cable’s paper

If I were Rupert Murdoch, I think I might just let the Dolans of Cablevision have Newsday. For they’ll likely run it into the ground. Like Brian Tierney, who had the misfortune of winning the Philadelphia Inquirer, they’re ill-prepared to manage the rapidly declining fortunes of a newspaper (see the post about accelerating circulation declines and the post about local advertising I’ll soon write above). Unlike Murdoch and the Daily News, they have no real opportunities for synergy and savings. Oh, yes, they have cable channels News12 LI, NJ, and NY but they are bargain-basement operations that could have reinvented local TV but instead come off like parodies. (I worked with them on the New Jersey launch when I worked at the Star-Ledger’s parent company.) The opportunities for cross-media ad sales are slight. They have a terrible reputation in the market for their customer service. They haven’t been able to agree with their board on more than one offer to take their company private; it’s almost as if they hope that a newspaper would be dead weight sufficient to lower the price of the empire so they could finally buy it.

Here’s the irony: As with the Wall Street Journal, which was better off with Murdoch’s willingness to invest than the Bancroft family’s unwillingness, so would Newsday appear to be better off in his hands than in those of the alternatives. On On the Media this morning, Brooke Gladstone asked Jack Shaffer whether Murdoch is the last salvation of the American newspaper industry. Jack pshawed the thought. I’m not so sure.

: Lauren Rich Fine, former analyst, says she’d buy a newspaper if the price were low enough. I think all you may be buying are shutdown costs. Remember when Tribune unloaded its strikebound Daily News on Robert Maxwell (I was Sunday editor at the time), they paid him $60 million to take it off their hands. And newspapers have only continued to slide since then.

  • tom coscarelli

    Jeff:

    My favorite newspaper metric:

    While Lee paid $1.46 billion for the Pulitzer papers, he pointed out, the stock market value today of the entire chain (which includes 55 daily papers) is only $515 million. That half-billion bucks represents a stunning 63% decline in Lee’s stock value over the course of a year.

    http://www.thedailypage.com/daily/article.php?article=19482

    (And this was in Jan.)

  • tim

    In fairness, Lee also added $1.5 billion in long-term debt, so the drop in enterprise value hasn’t been nearly so dramatic. I’d hate to own any unsecured debt of theirs, though. Like with Tribune, the junior debt holders aren’t going to get paid.