Report: News Corp. Closes in on $580 Million Deal for Newsday

The Wall Street Journal is reporting that Sam Zell's Newsday is close to being sold to Rupert Murdoch's News Corp. for $580 million. The story is sourced to people familiar with the situation, and that both parties "have informally agreed on key aspects, including the price, structure and governance."

If the deal is done, Newsday would become a "joint-venture" with The New York Post. What exactly that means is unclear. The Journal reports:

News Corp. had previously considered an alternative structure whereby each newspaper would have retained its editorial independence, reporting to their respective parents, while back-office and production facilities were combined. However, the current deal is structured as a full joint venture, although the newspapers would remain separate products, at least for the time-being.

The story continues:

Tribune will receive cash from the deal by guaranteeing debt raised by the joint venture. In addition to its stake, Tribune will receive $540 million to $560 million in cash, people familiar with the situation said. As part of the agreement, News Corp. wouldn't be able to unwind the joint venture for at least 10 years.

Last week, Mr. Zell said there was "keen interest" about the Long Island-based paper, and that specific inquiries had been made. Mr. Murdoch will get a paper that makes money; last year it had a cash flow of $88 million.

Much more on this, and reaction, tomorrow.