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May 12, 2008 5:45 PM

Hughes Hubbard & Reed, Sullivan & Cromwell Advise Cablevision on Newsday Acquisition

Posted by Brian Baxter

UPDATE: This post has been updated with new information pertaining to the lawyers who worked on the deal for Cablevision and the Tribune Company.

In a battle of billionaires squabbling over Long Island's largest newspaper, Cablevision Systems Corporation's chairman Charles Dolan has emerged victorious. The cable services giant announced today it had purchased Newsday from the Tribune Company for $650 million, beating out separate $580 million bids from News Corporation's Rupert Murdoch and the Daily News's Mortimer Zuckerman.

Corporate finance partners John Mead and Robert Downes led a team from Sullivan & Cromwell that provided corporate finance and antitrust advice to Cablevision, which was a relative latecomer to the deal after joining the bidding only three weeks ago. It's the second deal in five days for Cablevision associate general counsel Lawrence Burian and S&C, which is longtime outside counsel to the Bethpage, N.Y.-based cable company. On May 8, S&C advised the Dolans on their $496 million purchase of the Sundance Channel.

"Cablevision has been keeping us very busy and it was quite a sprint getting this [deal] done," says Downes, whose deal finance team included finance partner Hydee Feldstein, antitrust partner Yvonne Quinn, and antitrust associate Rajwant Mangat.

Cablevision tapped New York's Hughes Hubbard & Reed to serve as lead M&A counsel.

Hughes Hubbard had done deal work for the Dolans in the past and has extensive experience in the publishing sector, which further endeared the firm to Cablevision. Corporate partner Kenneth Lefkowitz led a 26-lawyer team from Hughes Hubbard that included corporate partners James Modlin, Charles "Chuck" Samuelson, and M&A group cochair James Bluck, tax chair Andrew Braiterman, antitrust chair James Kobak, Jr., global real estate cochair Samuel Sultanik, new media technology chair Daniel Schnapp, labor and employment partners Ned Bassen, Spencer Harrison, and Marshall Babson, and litigation partners Peter Sullivan and Marc Weinstein.

Chicago billionaire real estate entrepreneur Samuel Zell took the Tribune Company--Newsday's parent and owner of the Chicago Tribune and Los Angeles Times--private in an $8.2 billion deal a year ago. Since then, Zell has said publicly he would look to sell assets separately, such as the Chicago Cubs baseball team. Zell put Newsday on the block a month ago and Murdoch's News Corporation, the world's third-largest media conglomerate, was initially thought to be the front-runner to close a deal.

But Murdoch ordered News Corporation to pull its $580 million offer over the weekend. (Longtime outside counsel Hogan & Hartson advised News Corporation on M&A matters and Skadden, Arps, Slate, Meagher & Flom and Gibson, Dunn & Crutcher provided regulatory advice.) With Zuckerman matching Murdoch's bid to prevent Murdoch from gaining a competitive edge, Cablevision was the last bidder standing.

Tribune's longtime outside counsel at Sidley Austin--the firm advised the company on its acquisition by Zell--was one of three firms providing legal advice to the newspaper publisher. McDermott Will & Emery tax partners Blake Rubin and Andrea Macintosh Whiteway, and corporate partners Brooks Gruemmer, Samuel Wales, John Schetz, and corporate associates Daniel Fuchs, Kathleen Edwards, and Christopher Lin advised Tribune. Paul, Hastings, Janofsky & Walker partner Daniel Perlman, of counsel Jeffrey Rheeling, and associates Justin Bender and Tarun Chandran served as Tribune's outside real estate counsel.

The deal gives Cablevision a 97 percent stake in Newsday and is expected to close sometime before the end of the year.

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