BusinessWeek recently posed the question of how The New York Times Co. (NYSE: NYT) could be worth so little? The question is worth pondering.

The company has a market cap of about $1.8 billion, roughly the price that CBS Corp. (NYSE: CBS) recently agreed to buy CNET for. Its enterprise value is about $2.85 billion.

Lehman Brothers analyst Craig Huber estimated that the Boston Globe and 15 regional papers could be sold for $575 million after taxes, and valued the company's 17% stake in the Boston Red Sox at $152 million and estimated NYT's portion of its new headquarters at $750 million. About.com, which the Times bought for $410 million three years ago, could fetch a tidy profit if it were sold today.

MAJOR PAPERS:

• The Wall Street Journal reported that a spokesperson for New Corporation (NYSE: NWS) said the company has dropped out of the bidding for Tribune Co's (NYSE: TXA) Newsday. This leaves Cablevision Systems Corporation (NYSE: CVC) as the apparent winner of the auction.
• According to people familiar with the matter, the Wall Street Journal reported that American International Group Inc's (NYSE: AIG) airplane-leasing unit is considering a split from the company. The people said International Lease Finance Corp have grown "increasingly concerned" the company will be hurt by AIG's financial troubles.
• Royal Dutch Shell Plc (NYSE: RDS.A) and Spain's Repsol YPF SA (NYSE: REP) are pulling out of one of Iran's biggest gas projects, the $10B-plus development of phase 13 of South Pars, the world's largest gas field, the Financial Times reported.

WEB SITES:

• Bloomberg reported that HSBC Holdings Plc (NYSE: HBC) set aside a smaller-than-forecast $3.2B for bad loans in the U.S. The bank also said its Q1 profit was higher than Q107.

The Wall Street Journal, which is owned by News Corp. (NYSE: NWS) is reporting that News Corp. has withdrawn its bid for Newsday (subscription required). Rupert Murdoch's News Corp. was unwilling to match the $650 million bid offered by Cablevision (NYSE: CVC). New York Daily News owner Mort Zuckerman had also bid on Newsday.

Besides being higher, Cablevision's bid is likely to face fewer regulatory hurdles, considering Murdoch's and Zuckerman's New York holdings. But, according to the Journal, the bid could prompt some pushback from investors who question the the strategic rational for the deal. Cablevision could bundle Newsday subscriptions with other broadband and phone services it offers in the New York area.

Tribune Co. (NYSE: TXA), current owner of Newsday, recently reported that first-quarter revenue and circulation was down, as newspapers continue to struggle. Cablevision also reported a first-quarter loss of 11 cents per share.

Cablevision (NYSE: CVC) is considering buying Long Island newspaper Newsday. Jared Kushner, a rich young publisher who owns the small weekly The New York Observer may also be involved. As far any anyone knows, the Observer has never made any money.

According to Reuters, the bid would be above the $580 million already offered by New York Daily News owner Mort Zuckerman and Rupert Murdoch's News Corp (NYSE: NWS), which owns the New York Post.

Cablevision's board has already hurt its shareholders. The company's controlling shareholders, the Dolans, made a cash offer of $36.26 for the company in mid-2007. That was just before cable companies began to report weaker earnings due to increasing competition from phone operators like Verizon (NYSE:VZ). CVC now sells for $23,

There are no savings for Cablevision if it buys a newspaper. If it makes an offer in partnership with the Observer, the NY-based paper is so tiny that any cost cutting would be meaningless.

The reasons behind the Post and Daily News offers have some sense to them. By combining with another large daily paper which has overlapping geographic distribution, the chances of taking out tens of millions of dollars in costs per annum are excellent.

Putting a cable company with a daily newspaper does not make Cablevision shareholders a dime. With the newspaper industry faltering, it may actually cost them a great deal of money.

Douglas A. McIntyre is an editor at 247wallst.com and author of the Ten Stocks Under $10 letter.

The special committee set up by Rupert Murdoch to ensure the editorial independence of the Wall Street Journal is about as useful as a referee at a professional wrestling bout. The sad thing is that News Corp. (NYSE: NWS) is paying members of this committee $100,000 a year to let Chief Executive Rupert Murdoch do whatever he wants to do anyway.

A case in point is the abrupt resignation of Managing Editor Marcus Brauchli. The lackeys -- oh, I mean the special committee set up following the Dow Jones acquisition -- felt compelled Monday to issue a press release to show publicly that they were on the case. At least, that's what it tried to do.

"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," the committee said in a statement. The committee met with Brauchli alone and was told 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."

Yeah, right.

Murdoch has meddled in his media properties for decades. No special committee is going to stop his lust for power. Anyone who expected otherwise is either naive or deluded. Murdoch will have no inhibitions of messing with Newsday if he succeeds in buying Newsday from Sam Zell's Tribune Co. because beggars can't be choosers.

Rupert Murdoch is facing off against the Federal Communications Commission (FCC) as he seeks to take control of two TV stations and three newspapers in New York -- including Newsday -- The New York Times reports. A December 2007 FCC rule allows a company to own just one paper and one television station in the same city in the top 20 markets so long as there are at least eight other independent sources of news and the station is not in the top four. (The stations that News Corp. (NYSE: NWS) controls are the fourth- and sixth-largest in the New York market).

Meanwhile, I am fascinated by the Wall Street Journal's [subscription required] coverage of the departure of its own managing editor, Marcus Brauchli, yesterday. The punch line was that everything is fine because Brauchli was simply doing what the boss wanted. Brauchli's new role? Providing "guidance to senior management in a wide range of areas," including whether Murdoch's Star-TV service in Asia should launch a business-news channel. Sounds like a good fit.

In contrast to the Journal's corporate press release on its page one, The New York Times reported that Brauchli was fired. It noted that a few weeks prior to his departure, Murdoch's henchmen indicated they were unhappy with the pace of change at the Journal. The Times wrote: "At some point, They told him, 'We don't think this is working,' and Brauchli replied that in that case, he should consider leaving."

To the surprise of no one, the newly private Tribune Co. is probably going to sell Newsday. The once-venerable New York paper, like all metro dailies, has fallen on hard times and Tribune's new CEO and owner Sam Zell has got a mountain of debt to pay down.

According to The Wall Street Journal . Long Island-based Cablevision Systems Corp. (NYSE: CVC) and New York's Daily News as potential buyers. Rupert Murdoch probably would love to buy Newsday and combine it with News Corp's (NYSE: NWS) New York Post, but I am not sure whether the antitrust regulators would allow it. He is trying to merge everything but the editorial staffs of the Post -- never a hugely profitable enterprise -- with Newsday to save money in a joint operating agreement, the Journal says.

After spending $5 billion for Dow Jones, Murdoch needs to pick all of the low-hanging fruit he can. I expect this deal to happen. Maybe it will lead to others for papers that buyers are eager to unload. Perhaps, Murdoch might buy other Tribune papers from Zell such as The Baltimore Sun or Los Angeles Times. As the Australian tycoon showed in chasing Dow Jones, influence matters as much to him as profits. Gaining more big papers furthers that goal at the expense of shareholders.

Have billionaires Eli Broad, Ron Burkle and Sam Zell run out of ways to spend their money? Maybe this explains their bidding war for Tribune Co. (NYSE:TRB).

Last night, Broad and Burkle said they would pay $34 per share for the Chicago-based media company, $1 more per share than an offer Tribune was on the verge of accepting from Zell. Both deals would be financed through employee stock ownership programs, according to the Los Angeles Times.

Broad and Burkle will invest $500 million in Tribune, more than the $300 million Zell reportedly offered, the paper said.

Money, though, isn't going to solve Tribune's problems.

Big city metros such as The Los Angeles Times are particularly vulnerable to competition from the Internet and smaller local papers. Tribune's largest paper also has had turmoil in its management ranks that reportedly has hurt morale in the newsroom. The other big Tribune papers like Newsday, The Baltimore Sun and the Chicago Tribune have similar problems.

Zell said he plans to keep Tribune intact. I don't think Burkle and Broad have made a similar pledge. Regardless, the Chicago Cubs are probably going to get a new owner at some point in the not-too-distant future.

These wannabe press lords may regret having their wish come true.

With all of the hubbub surrounding Tribune Co. (NYSE:TRB), you would think that the company was some red-hot startup that throngs of companies were eager to buy. Of course, nothing could be further from the truth.

Sam Zell has emerged as an unlikely suitor for the Chicago-based media company. He's made his fortune in real estate and has no experience in the media though he reportedly told the Chicago Tribune that newspapers were just like any other business.

Zell, who earned the nickname grave dancer for his ability to spot undervalued companies, is right to a point. Media companies need to sell a product that people want at a price that they will buy. There is a big point that eludes Zell and the other guys who are interested in the newspaper business.

Good news organizations will anger their major customers -- advertisers -- from time to time. If Zell is successful, he will be besieged by people looking to influence the editorial direction of the Los Angeles Times, Chicago Tribune and Newsday. He has to ignore all of it.

Believe it or not advertisers -- the ones who aren't angry -- want to be seen in credible news outlets because it lends legimimacy to their brands. If a media outlet isn't credible, big advertisers avoid it. Check out one of the supermarket tabloids and you'll see what I'm talking about.