Cablevision Buys Newsday for $650M

May 13, 2008

Cablevision Systems and Tribune Company inked a definitive agreement to form a new partnership through which Cablevision will acquire approximately 97% of Newsday Media Group (“Newsday”). Newsday was valued at $632 million in the transaction, and Tribune Company will also receive $18 million at closing as prepaid rent under certain leases of property used in the business, bringing the total transaction value to $650 million.

Newsday is one of the nation's largest daily newspapers, serving Long Island and New York City. In addition to the newspaper and Newsday.com, Newsday Media Group includes amNewYork, the fast-growing free daily in New York City with an average weekday circulation of 335,000, plus the Star Community Publishing Group of weekly shoppers and Island Publications' portfolio of lifestyle magazines.

Cablevision Chairman Charles F. Dolan said: “Newsday is one of the great names in the history of American journalism and it is both an honor and privilege to return Newsday back to Long Island-based ownership after nearly 40 years. We admire Newsday’s strong editorial voice and reputation for quality as well as its leadership in print and online journalism. We are committed to maintaining Newsday’s journalistic integrity and important position in the marketplace.”

Tribune Chairman and CEO Sam Zell said: “This agreement enables us to maximize the value of Newsday and still retain an interest in this valuable asset. 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.”

Cablevision President and CEO James L. Dolan continued: “Both Cablevision and Newsday are in the content, customer relationship and advertising business and we see this as a wonderful fit. 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. We strongly believe Newsday Media Group and Cablevision share the same consumer-focused values, and we look forward to building on our mutual history in the New York area with these wonderful assets under the same umbrella.”

For Cablevision, the Newsday partnership adds a complementary print and online media group with diverse, quality local content in the New York area. The combined company will gain significant opportunities in its advertising-based businesses and subscription-based businesses, while also adding to its content portfolio and enhancing its commitment to the local community. These opportunities include:

Under the terms of the transaction, Cablevision will have approximately 97% and Tribune will have approximately 3% of the equity in a partnership that owns Newsday. To form the new partnership, Tribune will contribute the Newsday assets, and Cablevision will contribute newly issued parent company bonds with a fair market value of $650 million on the contribution date. Bank of America has provided a firm commitment to provide $650 million of senior debt financing, guaranteed by CSC Holdings, Inc., to the new partnership. Of that amount, Tribune will receive $612 million in cash, an equity stake in the partnership valued at $20 million and another $18 million in prepaid rent under leases for certain facilities used in the business. In addition, Cablevision will provide additional funds to pay certain transaction costs.

Cablevision Chief Executive James Dolan indicated that the Newsday businesses will report to Cablevision Chief Operating Officer Thomas Rutledge.