Would 'Newsday' Sale Get Regulators' OK?

Both Rupert Murdoch and Mort Zuckerman want to take Newsday off Tribune Co.'s hands, but either would face "enormous regulatory hurdles," says David Carr in The New York Times.

That may prove to be an overstatement, however. In actuality, the hurdles appear only mildly enormous for Murdoch, owner of the New York Post and The Wall Street Journal, and less enormous still for Zuckerman, owner of the New York Daily News. (Cablevision chief James Dolan doesn't own a New York newspaper, and would thus face a much smoother path.)

An acquisition of Newsday could be blocked by the Justice Department or Federal Trade Commission on antitrust grounds, or by the Federal Communications Commission, which regulates media ownership concentration in the broadcasting business.

An antitrust analysis is "based on economics," says D. Daniel Sokol, visiting associate professor at the University of Missouri School of Law. "It depends on the market share of the combined papers and possible effects post-merger of the combined firm."

"Market share" in this case refers primarily to local advertising. And since the Daily News carries more advertising than the Post, Zuckerman could, hypothetically, face somewhat greater scrutiny from the F.T.C. or DoJ. (The Journal is regarded as a national newspaper, one reason Murdoch was able to buy it without government hassle.)

But antitrust experts note that the Bush Administration has shown little desire to oppose mergers. And since Newsday's geographic base is in Long Island rather than the city proper, the case could be made that it's not really competitive with the Post or News for local advertising.

That leaves the F.C.C., which only regulates newspaper ownership insofar as it overlaps with ownership of TV or radio stations. Zuckerman owns no TV stations in New York, but Murdoch does: WNYW and WWOR, a situation that already required him to obtain a waiver from the F.C.C. rules. For him to add a second local newspaper to this package would be unprecedented, says Marvin Ammori, general counsel for FreePress.net, which opposes media consolidation.

That said, the revised ownership limits adopted by the F.C.C. in December and published last month do lay out some conditions under which the "negative presumption" against such combinations can be reversed. One is in the case of a failing newspaper; that doesn't apply here, as Newsday is reportedly one of the more profitable parts of Tribune Co. But other conditions -- such as pledges to maintain separate and indepdendent news operations and to increase the amount of local news coverage -- could allow Murdoch a way to satisfy the F.C.C. that, by buying Newsday, he wouldn't be decreasing local media diversity.

The bottom line, says Ammori: "An F.C.C. that wants to grant a waiver probably will. The conditions it sets are so fuzzy, and the information required to meet them is all controlled by the newspaper and the broadcast company that are trying to merge."

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