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Expert: amNewYork may be part of Newsday deal

By Garett Sloane | gsloane@am-ny.com

8:58 PM EDT, April 22, 2008

Rupert Murdoch's News Corp. is reportedly poised to buy Newsday from Tribune Co., a deal that could have considerable implications for amNewYork.

The deal is reportedly worth about $580 million. amNewYork, a Tribune subsidiary, is closely tied to Newsday, financially and operationally. It even prints on the same presses on Long Island, where Newsday is the dominant newspaper.

"I suspect [amNewYork will] be part of the deal," said John Morton, a veteran newspaper analyst, who was commenting on the close ties between Newsday and amNewYork.

He also warned that the deal is far from certain: "This is all very much in flux," he said.

amNewYork publisher, Terry Jimenez, who is also the chief financial officer of Newsday Media Group, a Tribune subsidiary, could not comment on reports of the pending deal or whether amNewYork would be part of the sale.

But he did speak of a bright future for New York's first free daily, which began publication in October 2003. "I firmly believe there is a lot of future growth ahead of us," Jimenez said.

Tribune chief executive Sam Zell has indicated there have been several potential suitors for Newsday. Zell took Tribune private last year with the intent of keeping the company intact. But the deal left the Chicago-based company $13 billion in debt, and the continued erosion of the newspaper business model along with the company's overall decline in revenue have prompted Zell to examine the sale of some properties.

The Wall Street Journal, which was purchased by Murdoch last December, cautioned in a report that details remained to be worked out and the deal could still evaporate.

Newsday reported yesterday that Murdoch has reached out to Nassau and Suffolk counties' chief executives to establish good relations, and hopes to have a deal in two weeks. A source told Newsday that final details may not be in place for up to four weeks. Calls to the corporate offices of Tribune and News Corp. were not returned.

Any deal would surely face close regulatory scrutiny since Murdoch's News Corp. already owns the New York Post, the Journal and WNYW Ch. 5 and WWOR Ch. 9. However, amNewYork would not likely weigh heavily in that debate.

"Everything that operates within the market is a factor considered by the anti-trust division," Morton said. "But the bigger concerns are the TV stations and major dailies."

If amNewYork were sold, it could feel the mark of any new owner.

A change in ownership can sap the "unique charm" of a publication, according to Carl Sessions Stepp, the senior contributing editor of the American Journalism Review.

"In one way new ownership brings stability, but you lose a lot of diversity and independence," he said.

Exact financial figures for amNewYork are not available, but the publisher said he is optimistic about revenue projections for 2008.

If amNewYork's business model is deemed sound, then there would be no cause for a shakeup, Morton said.

"I think your [amNewYork's] market is different enough from the Post and certainly Newsday," he said. "It would make sense to continue it."