Murdoch's crowing about Newsday

NEW YORK (Fortune) -- The financial pages have been full of anonymously sourced stories about Tribune Co.'s pending sale of Newsday. On Wednesday, News Corp. CEO Rupert Murdoch spoke out about the deal. He publicly stated that a) his company was in "pretty advanced talks" with Tribune Co. CEO Sam Zell to acquire the Long Island daily, b) he expected to announce a deal within a week, and c) no, he didn't see any reason to raise News Corp.'s "highly competitively priced bid" of $580 million for the paper.

Oh, Murdoch also took a jab at Cablevision's (CVC, Fortune 500) Charles and James Dolan, who have tried to derail his effort with a last minute $650 million offer for Newsday. "I don't think Cablevision will prevail," he told analysts and reporters during News Corp.'s (NWS, Fortune 500) quarterly earnings conference call. "Just be patient for a couple of days, will you? We're certainly not in the business of getting into an auction here."

It was a brava performance by a guy who clearly believes he's outfoxed his chief rivals for Newsday: the Dolans and New York Daily News owner Mort Zuckerman. Interestingly enough, James Dolan had a chance to counter Murdoch's deal spin during Cablevision's earnings call. He didn't take it. Instead, the Cablevision CEO sounded as if he was fumbling his way through a prepared statement Thursday morning when analysts inquired about his company's interest in Newsday.

"We've certainly seen a lot of reports with regards to Newsday," Dolan told them. "All I can say...is we have nothing to announce with regards to Newsday. We haven't spoken about it before, and we really aren't going to speculate about rumors."

The Cablevision CEO wasn't pleased when his listeners pressed him further about his company's bid. "I think we're pushing the issue too far," Dolan said defensively.

By contrast, Murdoch sounded only too happy to take questions. By all accounts, he has had his eye on Newsday for years. The deal could enable Murdoch to achieve two goals. First, News Corp. could wipe out the estimated $50 million in annual losses at its New York Post by combining the back-office operations of the two tabloids. He could also lure advertisers away from Zuckerman's Sunday Daily News by offering package deals in the Post and Newsday.

As you might expect, some analysts weren't thrilled about News Corp.'s plan to buy another newspaper on the heels of its $5 billion acquisition of Dow Jones, owner of the Wall Street Journal. "It would seem to be an expense way to improve the profitability of the Post," said Jason Holstein of Oppenheimer & Co. "Wouldn't it be more prudent to divest the Post, and keep in mind, this is coming from avid Post reader?"

Murdoch was only too happy to parry with his inquisitor. "If we succeed with this bid," he replied, "it will improve our cash flow by $100 a year."

Holstein: "But wouldn't it be dilutive to like..."

Murdoch: "No, that's not dilutive."

Helfstein: "No, to the long term growth rate of the company. We know [newspapers] do grow slower than your core growth rate."

Murdoch: "I don't think so. We think that this is a great market, and this will give us a very powerful position in there from which to grow."

He also shrugged off speculation that News Corp. could run into trouble with the FCC because it already owns the New York Post and two television stations in the New York region. (The Wall Street Journal isn't a problem because it's a national paper.) "There's no possibility of antitrust," Murdoch assured his listeners. "As far as the FCC, that's something that will be handled when our [television] licenses come up for renewal. We're very confident that we will get through that - even if we have to go to court."

It's not every day you hear the head of a Fortune 500 company blithely talk about taking the federal government to court. Maybe he's just bluffing. Then again, maybe Murdoch is trying to tell his quieter rivals for Newsday that they aren't in his league.