The fate of Newsday isn't decided yet, however. According to a person familiar with the situation who asked not to be named, real estate developer Mortimer Zuckerman, who owns the New York Daily News -- bitter rival to Murdoch's New York Post -- is planning to put in a formal proposal to buy Newsday on Friday.

Long Island-based cable TV provider Cablevision Systems Corp., which owns a local cable news channel, has also been reported to be considering a bid along with Jared Kushner, owner of the New York Observer, a highbrow weekly newspaper in Manhattan. Representatives of both Cablevision and Kushner declined to comment.

The acquisition is being watched particularly closely because -- in addition to the feisty tabloid Post -- News Corp. owns two New York-area TV stations and Dow Jones & Co., parent company of The Wall Street Journal.

For several consumer advocacy groups, the mere prospect of Murdoch getting another New York media outlet is unacceptable.

Susan Lerner, executive director of Common Cause in New York, called the potential acquisition "a step back that will hurt our democracy," and Consumers Union, publisher of Consumer Reports, has also come out against it.

News Corp. spokeswoman Teri Everett declined to comment.

Chairman Kevin Martin of the Federal Communications Commission declined to comment directly on the deal Thursday, saying the commission doesn't have any transaction before it.

"The commission will apply its rules on media ownership as they currently are, including the reforms we made in December, to any of those transactions," Martin said. "I think we'll follow those rules very closely."

Martin said the FCC does not issue a "newspaper license." Media ownership decisions take place at the time of license renewal, he said.

Both stations' licenses apparently expired in June. Martin had no comment on when the agency will act on the applications for renewal.

News Corp. also owns a huge array of media assets around the globe, including the Fox network, Twentieth Century Fox, and newspapers in the United Kingdom and Australia.

From the regulatory point of view, the biggest hurdle would be likely to come from the Federal Communications Commission, which is still considering the renewal of the broadcast licenses of News Corp.'s two New York-area TV stations.

Andrew Jay Schwartzman, head of the Washington-based public interest law firm Media Access Project, already petitioned the FCC to deny the renewal of those licenses last year, and says there is sure to be even greater opposition if Murdoch buys Newsday.

The FCC wouldn't have to sign off on News Corp.'s purchase of Newsday, Schwartzman said, but it could hold up or deny the renewal of the broadcast licenses.

An FCC rule passed last December expanded the conditions under which the same company can own a newspaper and TV station in the same market, but News Corp. would still need a waiver for its TV licenses since it would own both two TV stations and two newspapers all in New York.

Getting a waiver is still possible, although there are several conditions that would have to be met -- conditions that FCC chairman Kevin Martin has said represent a "very high hurdle."

The FCC's new cross-ownership rule is currently being challenged in court, by News Corp. and other media companies on one side who say it didn't go far enough, and by advocacy groups who say it went too far.

The rule is also facing a political challenge. On Thursday a Senate committee passed a bill from Sen. Byron Dorgan, D-N.D., that would overturn it altogether.

Even if the bill eventually gets blocked by a veto from President Bush, there is growing bipartisan support in Congress for measures to curb the further expansion of media ownership, Schwartzman said. That could present "greater political barriers to obtaining relief from the FCC," he said.

On the antitrust front, Murdoch's ownership of Newsday would be less likely to present significant regulatory hurdles, even though it operates in an adjacent area to the New York Post, said Eleanor Fox, a law professor at New York University and expert in antitrust law.

"Antitrust is generally not concerned with media concentration when there are a lot of players in the market," Fox said. "Antitrust used to be concerned about diversity and point of view, but that hasn't been true since the Reagan administration in 1980s."

Of greater concern to antitrust regulators at the Department of Justice would be whether a business combination would be likely to result in higher prices, in this case for either advertisers or consumers who buy the papers, Fox said.

Copyright 2008 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

tf.TFN-Europe_newsdesk@thomsonreuters.com ejb/jlw

COPYRIGHT

Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.

MMMM

--At its regular quarterly meeting in February, the Committee met alone with Marcus Brauchli, who assured us that no issues of editorial independence or integrity had arisen in the wake of the News Corp. acquisition of Dow Jones in December.

--Each member of the Committee received a telephone call from Rupert Murdoch, chairman of News Corp., on Monday April 21 alerting us to the fact that Brauchli had resigned and reached an "amicable" agreement with News Corp. He asked us to join a conference call at noon the next day.

--Murdoch and other News Corp. officials, as well as Brauchli and Brauchli's lawyers, participated in the call. All members of the Committee participated.

--We questioned the officials and Brauchli about the circumstances of the resignation. Although our charter does not directly envision a process for dealing with a resignation, Committee members expressed the view that learning of the Brauchli matter after the fact failed to meet the letter and the spirit of the agreement.

--We then asked the News Corp. representatives to leave the room and questioned Brauchli separately. His answers were consistent with what had been said before. He said he had been approached two weeks earlier and told that News Corp. wanted to make a change in the managing editor. Brauchli said he felt that the owners should be able to choose their own managing editor; that it would be best if he left without acrimony; and that his action was not the result of any problem with editorial interference or attempts to impose an ideological viewpoint. He insisted that News Corp. has been "scrupulous" about the integrity of the paper. He said that if that had not been the case, he would have notified us.

--The committee has not been made aware of any issues of editorial independence or integrity either before or since the telephone conference.

--After News Corp. officials rejoined the meeting, the Committee expressed the view that it should have been notified before the Brauchli departure. The News Corp. officials pledged to keep the committee thoroughly informed during the process of hiring a new managing editor.

The Committee met subsequently and decided that there was no practical way to "unresign" Brauchli and start the process over. Under the agreement, the committee has the duty and responsibility to approve or disapprove such actions. The Committee intends to exercise fully its role in the approval of a successor managing editor and to take the steps necessary to prevent a repeat of the process it has just been through. The Committee will be meeting directly with Wall Street Journal Publisher Robert Thomson and News Corp. officials in the near future to discuss these and other matters.

SOURCE: The Special Committee

The Special Committee
Thomas J. Bray, Chairman
248-840-7115
248-646-3648

Gary Davey will re-join News Corporation as Chief Operating Officer, News Corp Stations Europe, reporting to Tom Mockridge. Previously Davey served as Chief Executive of Star TV, News Corp's Pan-Asian business, and prior to that he was deputy managing director at British Sky Broadcasting Plc in the UK. He began his career at The Adelaide News in South Australia and has played a number of roles in the development of News Corporation businesses.

Steve Tomsic has been appointed Chief Financial Officer, News Corp Stations Europe. Tomsic has worked for the past two years at Sky Italia and prior to that at Foxtel, the Australian pay-TV platform partially owned by News Corporation.

Marc Heller will become Senior Vice President Strategy & Corporate Development, European Television. Heller has been based in Paris working on mergers and acquisitions for News Corporation. He worked in a similar role at Vivendi and was also a senior executive at Telepiu', one of the predecessor companies to SKY Italia.

Tom Mockridge, Chief Executive, European Television, said:

"These executives bring exceptional experience from around News Corporation to our European television businesses. We have assembled a high caliber management team and I look forward to working with them."

News Corporation (NYSE: NWS, NWS.A; ASX: NWS, NWSLV) had total assets as of March 31, 2008 of approximately US$62 billion and total annual revenues of approximately US$32 billion. News Corporation is a diversified entertainment company with operations in eight industry segments: filmed entertainment; television; cable network programming; direct broadcast satellite television; magazines and inserts; newspapers and information services; book publishing; and other. The activities of News Corporation are conducted principally in the United States, Continental Europe, the United Kingdom, Australia, Asia and the Pacific Basin.

SOURCE: News Corporation

News Corporation
Daisy Dunlop, +44 20 7782 6019

These roles report to Tom Mockridge, Chief Executive, European Television.

Gary Davey served as Chief Executive of Star TV, News Corp s Pan-Asian business, and prior to that he was deputy managing director at British Sky Broadcasting Plc in the UK. He began his career at The Adelaide News in South Australia and has played a number of roles in the development of News Corp. businesses.

Steve Tomsic has worked for the past two years at Sky Italia and prior to that at Foxtel, the Australian pay-TV platform partially owned by News Corp.

Marc Heller has been based in Paris working on mergers and acquisitions for News Corp. He worked in a similar role at Vivendi and was also a senior executive at Telepiu , one of the predecessor companies to SKY Italia.

Mockridge said, These executives bring exceptional experience from around News Corp. to our European television businesses. We have assembled a high caliber management team and I look forward to working with them.

News Corp. is a diversified entertainment company with operations in filmed entertainment; television; cable network programming; direct broadcast satellite television; magazines and inserts; newspapers and information services; and book publishing.

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