Rupert Murdoch's News Corp. is about to buy Newsday for close to $580 million, and pull off a neat trick in the process: bringing profitability to Murdoch's other, cash-bleeding tabloid, the New York Post. By combining the Post and Newsday into a joint business venture, Murdoch stands to "wipe out as much as $50 million in annual losses News Corp. now incurs on the Post, with the combined Newsday-Post operation earning roughly $50 million," according to a Wall Street Journal source. The sale price represents a significant premium over the $350 million to $400 million price put forward by one newspaper analyst. The whole transaction is dependent on regulator approval, which is no sure thing. Assuming the deal goes through, it will be interesting to see how Newsday's headlines, front page and overall tone evolve, since the joint venture is not limited to back-end business operations but includes editorial resources as well. [WSJ]

Since when is Newsday so hot? The paper consistently publishes the most boring front page of any of the Gotham tabloids, but the publication is clearly stirring the passions of corporate tycoons. Rupert Murdoch's interest emerged yesterday; now it's clear that the News Corp. CEO and Post owner must queue with other suitors interested in winning Newsday from money-hemorrhaging Tribune Company. Daily News owner Mort Zuckerman wants the paper for largely the same reason as Murdoch, which is to merge business-side offices and cut costs enough to drive the remaining, unaffiliated tabloid out of business. Long Island cable operator Cablevision Systems Corp. is bidding, perhaps so it can cross-sell ads from its cable system and local news channel into Newsday. It's not clear that the other two bidders are as serious as Murdoch, or can afford to be, but broker Citigroup is apparently planning a "soft auction." Newspaper analyst John Morton estimates Newsday could fetch $350 million to $400 million, down about half from its value five years ago. Kind of sad for what Morton described, in the Times' retelling, as "probably one of Tribune's more lucrative papers." [Times, WSJ]

New York has long been an anomaly among American cities: the metropolitan area supports four competing daily newspapers, the New York Times, the Post, Daily News and, in Long Island, Newsday. Maybe not for much longer. Crains, the business newspaper, claims Rupert Murdoch's News Corporation may have approached the owners of Newsday, Sam Zell's Tribune Company, with a bid. That the Australian media mogul would make such a bid is less a sign of confidence in the newspaper industry, and more an indication of the decline in print advertising, which has put pressure on all newspaper groups. It's only since the latest horrific numbers came out that Newsday's erratic owner, Sam Zell, has indicated Tribune may be willing to sell. (The conglomerate lost $78m in the fourth quarter.)