How a Sale by Zuckerman Could Buy Murdoch's Backing for Senate

Mort Zuckerman would like to have more say in government. Rupert Murdoch would like to stop losing appalling amounts of money on the New York Post. Could their problems have a common solution?

Zuckerman (pictured), who owns the New York Daily News, is reportedly exploring the idea of running for the U.S. Senate seat currently held by Democrat Kirsten Gillibrand. Although he's also a conservative Democrat, Zuckerman is said to be leaning towards running as a Republican in hopes of an easier path to the nomination. (It's the same strategy employed by his fellow media mogul, Michael Bloomberg, in his bid to become mayor of New York City; Bloomberg later became an independent.)

Were he to run, though, Zuckerman would face a couple of obstacles. For one thing, his ownership of the Daily News might run up against the Senate's conflict-of-interest rules. For another, his bid would likely be loudly opposed by Murdoch, a staunch Republican and longtime personal rival.

Murdoch has a number of outlets he could use to move public opinion against Zuckerman: the Post, Fox News, and even, potentially, the editorial page of The Wall Street Journal. Historically, the Journal has stayed away from endorsements, but Murdoch has indicated he might break with that tradition, and, with the paper launching a New York City section, it's no great leap to think its scope of interest might extend down to New York's Senate race.

But what if Zuckerman were to divest himself of the conflict and curry Murdoch's favor in one elegant if ethically questionable stroke? He could do so by selling his fellow mogul the Daily News. Murdoch has said in the past that owning another New York newspaper and combining its back end with the Post would allow him to erase his paper's losses (currently said to be running in the ballpark of $50 million or more). That was the thinking when he tried to buy Newsday from Tribune Co.

More recently, Murdoch and Zuckerman have had quiet talks about merging some of their operations to cut down on costs, although the discussions petered out. When, last July, a media analyst predicted to DailyFinance that Murdoch would buy the News, Zuckerman called the scenario "total fiction," adding that his paper was "not for sale, has never been for sale, and will not be for sale."

Strong words -- but Zuckerman would hardly be the first would-be politician to eat a promise when opportunity unexpectedly beckoned. The real issue is that, were Zuckerman perceived to be buying Murdoch's support by selling him a New York institution like the Daily News, the maneuver could backfire. Which is why I predict that, if a deal like this happens, it will take place on the down-low. Zuckerman will announce that, like Bloomberg before him, he's stepping back from management of the News. Only after the election will the sale to Murdoch be announced.

And everybody wins -- except anyone who doesn't like the idea of a single billionaire owning three newspapers in the world's most important media market. But that's a separate issue.


Update, 8:42 p.m.
: As a commenter points out, the Post has already run an editorial supporting Zuckerman's candidacy. A friendly overture between future counterparties?

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