By JAMES BERNSTEIN // Back in 1995, Mark H. Willes, chairman and chief executive of Times Mirror Co., then the owner of Newsday, flew in from L.A. to visit the Pulitzer Prize-winning, but money-losing, New York edition.
Most heartening to the editorial staff, Willes was sporting the same button they all wore that day, “New York Newsday: Too Smart to Die.”
Tour completed, Willes hopped back on his corporate jet for the trip home, then announced the immediate closing of the New York edition, which had lost over $100 million in 10 years.
Smart, apparently, only goes so far.
It’s with similar hopes, and the same trepidation, that current Newsday staffers face the news that its corporate parent, Cablevision, has agreed to be acquired by Altice Group, the multi-national cable and telecom company, for $17.7 billion.
True, the talk has been pleasant so far. French billionaire Patrick Drahi, Altice’s founder, said in a statement Thursday that his firm was proud to be entrusted with the ownership of Cablevision and that it looked forward “to continuing the pioneering path they have paved for us.”
And, according to The New York Times, Drahi insisted on keeping Newsday as part of the deal.
But Drahi’s reputation is one of telecom titan and cost cutter, not as the savior of circulation-bleeding daily newspapers.
“It’s not a very logical asset for a European company,” conceded Rick Edmonds, a media analyst for Poynter in Florida.
Indeed, the journalistic “synergies” touted when Cablevision bought the newspaper in 2008 never came about, Edmonds said. And, he added, there is little precedence for successful cable-print partnerships. The only other major U.S. cable company that owns a newspaper – the Atlanta Journal-Constitution – is Cox Communications, which found its fortunes in print first, telecom later.
Drahi has instead built his media empire around 20 acquisitions of lagging cable and mobile companies, often at bargain-basement prices, in France, Belgium, Israel, Portugal, the Dominican Republic and, beginning earlier this year, the United States. Forbes has estimated his net worth at about $15 billion.
So no surprise, Edmonds suggested, if Drahi decides to eventually seek a buyer for Newsday.
Other analysts said the paper may become an online-only publication, finally sidestepping the cost of its print operation in Melville and the expensive delivery system needed to get the paper to sales points across the Island’s suburban sprawl.
That’s a scenario that appears to better fit the 52-year-old Moroccan-born Drahi’s reputation as an aggressive controller of expense. On Thursday, in fact, he announced a plan to pare $900 million from Cablevision spending.
“There’s been a lot of cost-cutting,” Stephanie Baghdassarian, a telecom analyst in Paris said about Altice. “They focus on that because cable is such a competitive market.”
In the Newsday newsroom on Thursday, there was a sort of fatalism about the announced deal, according to one veteran reporter who asked that his name not be used. A lot has changed since 1995, but, in this regard, maybe not so much.
“We never know what’s coming down the pike until it hits us,” the reporter said. “There’s nothing we can do but wait for the rain to fall.”
Full disclosure: Bernstein is a former Newsday business reporter.