‘Newsday’ Sale Could Raise Big Antitrust Issues, Economist Says

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By: Mark Fitzgerald

The widely reported deal to sell Tribune Co.’s Newsday to Rupert Murdoch’s News Corp. may be tripped up on antitrust concerns, the well-known media economist Robert G. Picard warned Tuesday.

“These are not small publishers desperately trying to find a way to survive in challenging times,” Picard, editor of the Journal of Media Business Studies, said. “They are asking to do something far beyond what others have asked to do.”

The sheer size of the deal raises a number of antitrust concerns, he said.

If the reported $580 million sale of Newsday goes through it combines the fifth-biggest daily in the nation, the New York Post, with the tenth-largest. News Corp. also publishes other community papers in the market, and owns two television stations that serve New York. News Corp. also recently bought The Wall Street Journal, an acquisition that the federal antitrust division did not oppose.

“They’re going to have to inform, and ask permission, of the federal government because the deal is so big,” Picard said. Advertisers are certain to argue that the sale would raise their costs, he added.

And it’s an open question of whether they can get clearance from the Federal Communications Commission — Picard said he doesn’t think they can — or, if they opt for a joint operating agreement (JOA), from, ultimately, the U.S. attorney general.

“You know how long (a JOA) can take,” he added. “I’m not sure they can get it done before the Bush administration leaves office.”

The deal could also be challenged under New York state law, something the New York Daily News undoubtedly would consider, Picard said.

Opposition to the possible Newsday sale formed quickly among “media democracy” groups that have been active in the fight against loosening regulations against same-market ownership of broadcast and newspaper.

“This sale should not be permitted under any circumstances,” S. Derek Turner, research director the group Free Press, said in a statement.

Calling the reported sale “a backroom deal between Rupert Murdoch and Sam Zell,” Turner said it would be “a clear violation of even the severely weakened FCC limits on how much media one company can own in one market.”

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