Cablevision To Buy Newsday !

Cablevision, the fifth largest cable operator in the United States, on Monday will acquire Newsday, a Long Island newspaper, for $650 million through an arrangement with the Tribune Company.

Cablevision, which has 3 million subscribers in the New York area, expects Newsday, with a weekday circulation of 387,000, to exploit print/TV/online synergies in advertising, content, and customer relationship.

Cablevision will pay $632 million for a 97 percent stake in a new company that will own Newsday. The paper’s current owner Tribune Company, which will receive $18 million in the deal, will own the remaining 3 percent.

“Adding Newsday’s superb assets to Cablevision’s portfolio presents a multitude of opportunities to provide consumers with additional quality content,” James Dolan, CEO of Cablevision said in a statement.

Cablevision owns The New York Knicks, the New York Rangers, Madison Square Garden, and Radio City Music Hall among other entertainment assets.

Newsday’s assets include the newspaper, Newsday.com, and amNewYork, a free New York City daily publication with an average weekday circulation of 335,000.

Cablevision announced last Friday that it will spend $300 million on a Wi-Fi network in its coverage area and will offer its customers free Internet access outside the home.

Some of the potential synergies between Cablevision and Newsday could involve Newsday ad insertions on cable TV, and making Newsday’s content available to the TV audience.

Cablevision will not be the first cable operator to own a major newspaper. Cox Enterprises, which owns a large cable company, also owns the Atlanta Journal-Constitution and 15 other daily newspapers.

It was reported last month that Rupert Murdoch, CEO of News Corp., made a bid of $580 million for Newsday. The bid was matched by New York Daily News owner Mort Zuckerman.

Cablevision subsequently bid a reported $680 million and Mr. Murdoch dropped out of the bidding.