Cablevision (CVC) is apparently looking at buying Long Island newspaper Newsday with Jared Kushner, a rich youngster who owns the tiny weekly The New York Observer. As far any anyone knows, the Observer has never made a dime.

The word from Reuters is that the bid would be above the $580 million already offered by NY Daily News owner Mort Zuckerman and Rupert Murdoch’s News Corp (NWS), which owns the NY Post.

Cablevision’s board has already shafted its shareholders. The controlling stockholders in CVC, the Dolans, made the rash offer of $36.26 for the company in mid-2007. That was just before cable companies began to report weaker earnings due to increasing competition from phone operators like Verizon (VZ). CVC now sells for $23,

There are no savings for Cablevision if it buys a newspaper. If it makes an offer in partnership with the Observer, the NY-based paper is so tiny that any cost cutting would be meaningless.

The reasons behind the NY Post and NY Daily News offers have some sense to them. By combining with another large daily paper which has overlapping geographic distribution, the chances of taking out tens of millions of dollars in costs a year are excellent.

Putting a cable company with a daily newspaper is like crossing a chicken with a polar bear. It just won’t work out.

Douglas A. McIntyre

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