Can Cablevision Turn a Triple Play into a Newsday Home Run?

It's easy to get lost in the current era of Big Man in Town Journalism. Zell. Singleton, Murdoch. Tierney. Harte. So much of the recent drama in newspaper ownership change has been driven by personality, as keep-it-in-road, rationale profit-seeking companies turn up their noses at the prospects of buying newspaper companies. It takes an outsized ego, an outsized wallet (your own maybe, but preferably someone else's) and a perhaps outlandish optimism to grab onto the horns of the bull and take off for a wild ride.

One current installment of that drama is playing out in Long Island, home of once-proud Newsday, a paper that innovated ahead of its day and then saw its fortunes cascade through the Times Mirror and Tribune funhouses. As Sam Zell stares down his first balloon debt payment, Newsday's hit the block, and an unusually crowded one it is. Isn't it great to see a bidding war for a newspaper company? It is highly enjoyable, if unique to market circumstance. With Murdoch's Post and Mort Zuckerman's New York Daily News in lethal competition, both have a hard time imagining the other getting Newsday and using it as cudgel in the war.

The weapon for each in that case is, of course, cost reduction -- a relentless streaming of cost in all departments -- ad, circ, production and printing and finance, not to speak of how newsroom synergies might be achieved. It's the other bidder in this case -- currently the high one -- that I think paints a more interesting picture of what the local "press" may become.

Cablevision has offered $70 million more than either Mort or Rupert, currently at $650 million, $150 million above its original offer. With Rupert and Sam increasingly better buddies (formally on AP board and informally, we can only guess), I would have put my money on that deal (and agree with Alan Mutter's notion of a potential Murdoch/Zell endgame, here). But $70 million is quite a differential, and for now, Rupert is saying he isn't going up. Further the potential of FCC review of his increasingly entangling NYC-area cross-ownership (the Post, WWOR-TV and WNYW-TV, Dow Jones and Newsday) would at least slow down and bring uncertainty to the deal. Sam Zell's bankers don't like uncertainty.

So that may leave us with a new attempt at....synergy. In fact, it could turn the emergent idea of Triple Play -- TV cable service, Internet service, local phone service -- into a Home Run, adding "newspaper" to the diamond.

In this new synergistic interpretation, we'd observe what new owners would see as complementary in combining Cable News -- including News12 Interactive.com (its cringe-worthy tagline -- "only in cable  not on phone company tv or anywhere else"; you need a password to get in unless you are a local cable subscriber) -- with Newsday. It's been done before you say, and you're right. In fact, Cablevision and Newsday themselves jointly produced a one-hour cable news program years ago. But it was too early and didn't pencil out. It's been done elsewhere as well, with mixed results.

What's changing now, I think, is that the time is coming back around to do it right and to make it pay. Is it a "TV-centric" time, as someone close to the Dolan family, who control Cablevision, said? TV-centric misses the point. It's more video-forward than TV-centric. News video is now here to stay. More than half of the US population has watched video within the last month; already in Britain, that number is now more than 90%. We're getting used to seeing video first, on our time, time-shifted, Apple TV-enabled, and through the Internet. The much-maligned pre-rolls and their children, "in-video" ads, are still highly sought after and fetching $25-35 CPMs, on average. We do like to watch. 

Look at most newspaper sites, and you see dabbling. The AP Online Video Network is so far populated on about 1800 sites, newspaper and broadcast. On too many, though, it's relegated downpage, and seems like an after-thought.

So what happens, in this new, coming age of convergence -- in which easily watchable video marries quick-read text and always-on opinion -- if you combine the resources of a Newsday and a Cablevision, which, too, counts hundreds of journalists in its newsrooms that span from northern New Jersey to southern Connecticut.

There's no doubt that web newsies want the best coverage in one place -- words and pictures. There's no doubt that if some bright-eyed market entrant were to start a news-gathering and ad-selling operation, she'd do it as a single operation, not as separate "TV" and "newspaper" businesses.

That of course is the challenge of synergy. Combining existing staffs and hierarchies, with their skills and skills deficits, is in reality much harder than a white-board exercise. But someone is going to make it work, and Cablevision may be the next to try.

What does synergy mean?

I called Phil Balboni, the man who created New England Cable News, a Cablevision-like operation. Balboni, who has won accolades for his operation, recently left NECN to found Global News Ventures, an international news start-up to watch.

"I think Cablevision and Newsday make a fit here....Video can populate the Newsday website. There is a substantial upside. It stresses the overall proposition that Cablevision has invested in the community."

My sense is that there is lots of potential around putting a strong local newspaper together with local cable news. Balboni ranks those synergies in this order:

1. Joint ad sales.
2. Synergistic news-gathering and production.
3. Monetizing cable-produced news video through Newsday's site.

There is lots for newspaper people to chew over in this kind of deal. Adding the Dolans to the Zells, Singletons, Murdochs and Tierneys brings with it all the same concerns about what Big Man in Town journalism looks like. The Dolans have been true cable innovators in New York and have also been much in the news themselves for years, as they've bought into local sports franchises (Knicks, Rangers, Madison Square Garden) and tried to lead a management buyout of their public company.

For newspeople though -- wondering whether a newspaperman like Murdoch or a swaggering non-news outsider like Zell -- it's just one conundrum on a long list. Who's going to come up with a formula to save a critical mass of journalism jobs and right the sinking ship?