It's time to widen the Dolan Discount.

Cablevision owns lucrative, well-managed cable systems in the metropolitan New York region. But its stock is often said to trade at a lower price than it should because of the noncable activities and antics of the company's controlling shareholder, the Dolan family.

The Dolans' latest fancy is the Long Island newspaper Newsday. Cablevision has won the bidding for the paper owned by Sam Zell with a $650 million offer.

"This agreement enables us to maximize the value of Newsday and still retain an interest in this valuable asset," Zell said. Newsday was one of the papers acquired when Zell bought out the  Tribune Co. late last year.

Cablevision will hold 97 percent of the Newsday Media Group, which also includes the free paper AM New York, with the Tribune Co. holding 3 percent. The path toward a deal was cleared after Rupert Murdoch withdrew from the bidding on Friday, saying that it had "become uneconomical."

And that is the big question about this deal. There will certainly be talk about finding synergies in Long Island content, but is the price worth buying a delivery system headed for extinction? In 1999, Newsday had a circulation of 574,000. Today it is 380,000 and falling. And its content has suffered from round after round of cutbacks imposed by the Tribune Co.

To pay for this deal, Cablevision is issuing debt of $650 million. Last week, Cablevision agreed to acquire the Sundance Channel for $496 million.

It's hard to see how these deals improve the value of the company's cable operations. And they are limiting Cablevision's ability to do meaningful deals in the near future.

"We've seen this movie before," Craig Moffett, an analyst at Sanford C. Bernstein & Company, told the New York Times. "Even if you squint hard enough to justify these deals, it isn't what shareholders signed up for."

And if this is a movie, it could be filed under "comedy." There was the satellite project Voom, promoted by Chuck Dolan, but shot down by his son, James. Then there has been the theater of the absurd known as the New York Knicks under Isiah Thomas, whose former, disastrous stewardship is estimated to have cost $187 million.

Indeed some cynics have even suggested only partly in jest that the Dolans are trying to hurt the value of the stock on purpose in order to try again to take the company private. In October, shareholders rejected a $36.26-per-share buyout offer from the Dolans as too low. Since then, however, the stock has fallen to under $25.

Cablevision, however, contends that with Newsday, "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," including pooling its news gathering resources and marketing the newspaper through Cablevision.

And analysts see value in the Cablevision franchise. On Friday, Richard Greenfield, an analyst with Pali Research, raised his rating on the company to "neutral" from "sell," reports Barron's Tech Trader Daily blog.

Cablevision's first-quarter results show "the power of its incredibly high video, data, and voice penetration levels to reduce churn and mitigate marketing cost increases, despite rising competition," he said.

But there are still the Dolans, he notes, who "continue to emphasize their desire to focus on growth strategies—which we essentially view as the Dolans investing in 'passion' projects rather than driving CVC shareholder value."