Wall Street is baffled by Cablevision's apparent purchase of Newsday, beating out two passionate newspaper proprietors, both of whom lusted for the Long island newspaper. Mort Zuckerman of the New York Daily News and Rupert Murdoch of the New York Post were willing to pay a cheesy $580 million for the prize, but the Dolan family's Cablevision bid $70 million more. The Dolans, father Charles and son James, are co-emperors of a mixed-media empire, with even less experience in the newspaper business than the current owner, real estate and buyout mogul, Sam Zell. I can explain the deal.
For the last two years, editors, reporters and columnists, myself included, have either jumped or been pushed out the Newsday door in massive economy waves conducted by the previous owners, the Tribune Company, which followed earlier economy waves by the Times Mirror.
As soon as he took command, Sam Zell put what was left of the paper on a starvation diet. Since all the fat and muscle was gone, Zell cut away the bones.
Cablevision can see the value in a Newsday Lite, as opposed to the old kind of newspaper that had a lot of reporters, editors and columnists with lots of stories. It's much cheaper to run than a paper with a lot of editorial people doing nothing but being journalists. Even though half its pages seemed to be filled with cyclone fence and storm window ads, the other half -- under publishers Bill Moyers and Dave Laventhol, editors Tony Insolia, Tony Marro and Howie Schneider -- produced one of the better papers in the nation.
I can understand why Sam Zell wanted to get rid of it. The paper was only turning a profit of $80 million last year on revenues of a half billion. Sheesh! It wasn't enough.
True, the paper still has some good stuff in it. Have you seen its classifieds? Some day they will give a Pulitzer Prize in classified sections and the all-new, unimproved Newsday will finally be recognized for journalistic excellence.
It only made sense for Murdoch, taking one of the suitors at random, to have a joint operating agreement with the Post. Basically, this means combining the trucks, the back office, the classified and all ad staffs, and who knows what else. Murdoch was losing $50 million a year on the Post. That was okay with Rupert; he can afford the loss.
The value of the Post is not the above the line profit, but the profit below the line: Influence peddling. Rupert has a lot more political influence because he owns the Post, even more than the Fox News Channel.
But what's in Newsday for the Dolan family?
In all my 35 years at Newsday as the media critic, I never became a great admirer of Cablevision. Admittedly, on Long Island Cablevision is ubiquitous. With cable, Internet, phone they are kind of everywhere, like crab grass. Their Ch. 12 News is also great on the weather.
Nobody has ever accused father Dolan of being stupid. The same thing cannot be said about his son, James.
Perhaps the most important reason for buying Newsday is to get the paper to stop all the criticism on the sports pages about the way Jim has been running the Knicks into the ground. Not to mention the Rangers and Madison Square Garden.
What you have to understand is Jim Dolan is an egomaniac. When an ego gets as big as Jim's, it causes disabilities in other parts of the body. Kind of like having an oversize heart restricts cardiac activity. Too much of the brain pan gets taken up by the ego enlargement.
With the Cablevision purchase of Newsday, it's one less newspaper to harp on all the mistakes Jim Dolan has made in mismanagement, misfeasance and malfeasance in running the New York market's beloved franchises.
I can see a Cablevision Newsday dealing with the Knicks' latest failures like the Post will not criticize Bill O'Reilly. The only place where you can get real news about O'Reilly is in the Daily News.
Under Co-Emperor James, the Dolan Empire has run numerous assets into the ground, like the embarrassing loss of the Yankee telecasts. The latest debacle is the Dolans' decision to block the redevelopment of Penn Station because they think its bad for the Garden. The plan was to move the Garden to a new sight over the railroad yards. Young Dolan now wants to renovate the existing sports arena, which sits atop the old Penn Station, knocked down in 1964 by real estate vandals to build what has been a carbuncle on the city's landscape.
A better idea would be to knock down the Garden and rebuild the old Pennsylvania Station, faithful to the original McKim, Mead and White version of the Baths of Caracalla in Rome.
While we're at it, I would go so far as saying that Amtrak could do a better job of running the Knicks, the Rangers and even Newsday.
If the Dolan family is serious about the newspaper business they might start with something a little more modest, perhaps buying a paper in Iowa, a weekly.
I may be a false alarmist by suggesting that my old paper will not be improved in the hands of the Dolans. There is always a chance they are buying it only to flip it. In several weeks, I could be writing another screed, explaining this is what happens with a Zell and other high rollers who spend money they don't have and are forced to pay for their grandiosity with a going-out-of-business fire sale.