Cablevision Buys Long Island's Newsday

Updated from 2:24 p.m. EDT

Newsday is out of reach for Rupert Murdoch.

Tribune said Monday it will sell the Long Island-based tabloid for $650 million to Cablevision (CVC - Cramer's Take - Stockpickr), the cable TV conglomerate based in the same New York suburb. Cablevision, controlled by the Dolan family, boasts 3.1 million subscribers in the metro area as well as ownership of Madison Square Garden, the NBA's New York Knicks, the NHL's New York Rangers.

Cablevision won a bidding war for Newsday against Murdoch's global media empire, News Corp. (NWS - Cramer's Take - Stockpickr), which owns the New York Post, and Mort Zuckerman, owner of the New York Daily News.

Both rival bidders had hoped to join the 11th largest newspaper in the U.S. with their New York-based tabloids in hopes of gaining the upper-hand in their ongoing metro newspaper war. News Corp. recently acquired The Wall Street Journal in a deal that drew heavy scrutiny from free press advocates, and the company may have faced regulatory problems if it had tried to add another New York newspaper to its portfolio.

In a terrible business climate for the newspaper industry, Cablevision faces scrutiny from its shareholders in the deal, but the company said owning Newsday will allow it to expand its reach to many households on Long Island and better promote its other businesses in local markets. Meanwhile, a deal with Cablevision is an easier sell for Tribune, given widespread criticisms of News Corp.'s editorial practices in the newspaper industry.

"We admire Newsday's strong editorial voice and reputation for quality as well as its leadership in print and online journalism," Cablevision Chairman Charles Dolan said in a statement. "We are committed to maintaining Newsday's journalistic integrity and important position in the marketplace."