With media mogul Rupert Murdoch treating his reported purchase of Newsday as a fait accompli, other potential purchasers are said to be buttressing their offers or waiting in the wings should regulators shoot down News Corp.'s bid.

Murdoch earlier this week reportedly reached an agreement to buy Newsday in a $580-million deal. In calls to local officials, Murdoch has said he expects the deal to be completed within two weeks.

Earlier this month, Murdoch was quoted as saying regulatory hurdles could complicate the offer, given News Corp.'s vast media empire, including the New York Post. Were the deal to get hung up on Federal Communications Commission approval, at least one local company -- Cablevision Systems Corp. -- may consider buying the paper.

Cablevision would be interested in purchasing the paper if Murdoch is forced to withdraw, a source said Wednesday.

One source close to Cablevision chairman Charles Dolan said it was assumed Murdoch had the "deeper pockets" and would be the likely purchaser of Newsday. But the source said Dolan has always been interested in Newsday and might step forward with a serious bid if Murdoch's is blocked by regulatory hurdles.

Other media reports Wednesday suggested a possible joint effort by Dolan and the New York Observer. Cablevision spokesman Charles Schueler declined to comment. An official of the Observer did not return calls.

Meanwhile, a person familiar with Daily News owner Mortimer Zuckerman's interest in Newsday said the real-estate tycoon was reformulating a previous offer with an eye toward matching the tax-avoidance mechanisms of the Murdoch bid. Under the News Corp. scenario, Tribune Co., which owns Newsday, would sell a roughly 95 percent stake in the paper to Murdoch; Tribune Co. would keep a 5 percent interest in the joint venture for at least 10 years to avoid a heavy tax burden.

Zuckerman realizes he "has to be able to do the same magic" of helping Tribune Co. chief Sam Zell avoid capital gains taxes to make any counteroffer viable, the source said. A Daily News representative declined to comment, as did those from Newsday, News Corp. and Tribune.

Federal regulators have been increasingly lenient about newspaper mergers and cross-media ownership, antitrust experts said.

Last December, the FCC lifted a 32-year-old ban by allowing companies to own one newspaper and one broadcast or radio station in the 20 largest media markets as long as the deals pass certain criteria, including having at least eight independently owned "major media voices" remaining in the community. In lifting the 1975 ban, the commission recognized that newspapers have been struggling and that new information outlets have emerged over the decades.

Glen Robinson, a professor at the University of Virginia School of Law, said the financial condition of newspapers could sway regulators to look at a Post-Newsday merger more favorably given the Post's losses.

"The antitrust division would surely take seriously an argument that this acquisition will help to ensure the viability," he said.

But it's not just antitrust concerns that worry some media watchers.

"Further consolidation of the media in the New York area is a step back that will hurt our democracy," said Susan Lerner, executive director of Common Cause/New York.

However, William Dean Singleton, chief executive of MediaNews Group of Denver, which purchased two of Tribune's Connecticut papers, said while his company has no interest in adding papers, combining Newsday with the Post or Daily News "makes sense."

"If you are already in the market and you want to improve what you have ... certainly either for Rupert or Mort, consolidating operations with Newsday would improve the operations they already own," Singleton said.

Source: MCT