Mumbai: Cablevision looks like the lucky suitor in the bid for Newsday, with Rupert Murdoch's News Corporation having pulled out its bid.

Sources indicate that the Tribune Company, which owns Newsday, is likely to accept Cablevision's $650-million bid. Sam Zell took control of Chicago-based Tribune in 2007, and is now downsizing jobs and selling assets to pay off debt in the face of its print advertising and circulation declining. It has $1.85 billion in debt that matures at the end of 2009. Amongst other assets reported to be on the block are its Chicago Cubs baseball team, and the Cub's home stadium, the Wrigley Field.

News Corporation withdrew its $580 million bid over the weekend. Murdoch had said a week ago that he would not raise his bid beyond the $580 million. Murdoch already owns The New York Post, and The Wall Street Journal.

The other remaining bidder is The Daily News' Mortimer Zuckerman, who though reported to be interested in the acquisition, is also seen to be at peace with Cablevision acquiring it, since Murdoch is now out of the race. Sources had indicated that Zuckerman was interested in Newsday, but with his fear of Murdoch acquiring it dispelled, may opt out.

Long Island's Newsday has been on the block since March this year, with Zell trying to sell it to raise much needed cash. It makes an attractive target as it is 11th-largest in circulation amongst American dailies.

Cablevision's offer was not actually excessively higher than that of News Corp or The Daily News, as the $70-million excess was a bid for the real estate occupied by Newsday. Murdoch and Zuckerman were content to let the real estate remain with the Tribune Company, but sources say that even then, Cablevision effectively outbid the duo by around $40 million.

Had News Corp succeeded in acquiring Newsday, it would have dominated the New York region. Also, after consolidation and by offering combined advertising deals could have made The Post profitable as well, and a more formidable competitor to its arch rival, The Daily News. However, it would have also rubbed federal regulators the wrong way, since News Corp also owns two television stations in the New York area. Presently the rules do now allow owning a television station and a newspaper in the same market.

Cablevision is controlled by the Dolan family. Newsday would be its first newspaper acquisition, and is a major cable television provider. As such has no economies of scale to look forward to in terms of merging its operations with existing newspaper businesses. Industry sources predict that Cablevision will need to sink in a fair amount of money in upgrading Newsday's printing plant. However, likely synergies do exist with the Newsday acquisition, as the Dolan family could bundle advertising sales and subscriptions, and leverage the print and digital operations to cross promote each other.

Cablevision also provides Internet and telephone services. Amongst other brands it owns are Madison Square Garden, Radio City Music Hall, the New York Knicks and the New York Rangers.

In 2007, Samuel Zell acquired Tribune in an $8.2 billion deal.

Now as chairman and chief executive, Zell has set about to recover the company from $12.8 billion in debt. From the start, Zell has been seeking to exit two of Tribune assets, the Chicago Cubs and Wrigley Field. He plans to keep core businesses of newspapers and television stations. However, with newspaper advertising revenue plummeting across the industry, and the Cubs deal taking longer than expected, Zell does not have too many options but to sell additional assets to meet Tribune's debt obligations, including the balloon payments that become due in December 2008 and mid-2009.

Newsday had generated over $80 million in profits in 2007, on revenues of around $500 million. Moreover, it sufferred from operational inefficiencies, specially in printing, delivery and circulation, which lead bidders to rethink their bids given significant opportunities to improve the newspaper's financial performance. That seemed to revive Cablevision's interest, who after having once exited the bid process, re-entered with what promises to be the winning bid.