Cablevision to Investors: Sorry We Bought That (Really Expensive) Newspaper Last Year
Last week, we saw News Corp. (NWS) go through this exercise when it wrote off half the value of the $5.7 billion it spent on Dow Jones and The Wall Street Journal. Now it’s Cablevision’s (CVC) turn: The Long Island-based cable company is taking a charge of up to $450 million for its hometown newspaper, Newsday, which it bought from Tribune for $650 million last summer.
That’s a write-off of up to 70 percent of the purchase price. News Corp. had also wanted Newsday–in part so it could consolidate its back-end operations with those of its New York Post–but bailed out after the price climbed above its $580 million bid. (News Corp. is the owner of this Web site.)
Boilerplate “sorry about that” language from Cablevision’s SEC filing: “These impairment charges reflect the continuing deterioration of values in the newspaper industry and the greater than anticipated economic downturn and its current and anticipated impact on the newspaper publishing group’s advertising business.”
Not included in the filing: “We probably should have realized something was up when Rupert Murdoch dropped out of the bidding. If Rupe says a paper’s too expensive, he’s probably on to something.”