Cablevision Beats Rupert to Newsday

Maybe the Dolan family has a secret plan: For reasons only they know, Cablevision (CVC) today announced a deal to acquire a 97% stake in Newsday from Tribune Co. for $650 million.

The price includes $632 million for the deal, plus $18 million in pre-paid rent for certain leases. The Newsday Media group also includes amNew York, a free daily distribution in New York City, along with some weekly shoppers and a group of lifestyle magazines called Island Publications. Tribune will keep a 3% stake. Cablevision said Bank of America (BAC) will provide $650 million in senior debt financing for the transaction.

Just why the cable operator wants to be in newspaper business isn’t entirely obvious. Certainly, the Street isn’t that excited about the deal: CVC this morning is down 46 cents, or 1.8%, to $24.51.