With purchase of Newsday, Murdoch has NYT surrounded

It appears that News Corp (NYSE: NWS) will buy the largest newspaper on Long Island, Newsday, from The Tribune Co., increasing pressure on The New York Times Co. (NYSE: NYT) in its home market. News Corp already owns The New York Post. Recent press reports indicate that News Corp is adding more political and international content to The Wall Street Journal to better compete with the Times.

According to The Wall Street Journal, the price for Newsday could be about $580 million, and final details of the purchase or lack of government approval could still kill the deal.

Tribune needs to make the sale to cover debt it took on in its LBO.

The news is especially bad for The New York Times Co. While the Post does not take much advertising from the Times, it does have a circulation of over 600,000 in New York City. Newsday has a daily circulation of about 400,000 in the well-to-do area of Long Island, just east of New York.

The New York Times is already in enough trouble. It posted a loss last quarter, and in March advertising revenue fell about 11%. The firm's stock trades at $20, but many observers believe that it it were not the target of investors who hope to break it up or sell it that the shares price would be much lower.

The value of the company just got undermined again.

Douglas A. McIntyre is an editor at 247wallst.com.