Hey Mort, Chuck, Rupe! Welcome to Hellville, Long Island!

On Jan. 15, Sam Zell dropped by the bleak house that is the Melville, N.Y., headquarters of Newsday, Long Island’s newspaper.

It was to be a pep talk: The last decade, characterized by its nearly annual tradition of soul-wrenching job cuts, was over. “We’ve got to get off our ass,” he said to the assemblage of reporters and salesmen; it went over well, less like a scolding than a slap on the butt from Coach.

Two months later, a somber group showed up at the Newsday auditorium for cannoli, pecan pie and coffee to say goodbye to the 36 newsroom buyouts Tribune had exacted from the paper, including three national reporters, several business reporters, its features editor, its movie editor and two critics. (Some reporters were taken off other desks and transferred to the Long Island desk.)

There was a speech, but no toasts, no booze, and very little of that Zell zetz you hear so much about. With recent sales, and further attrition, younger reporters in the newsroom have begun to adopt a pet nickname for the newspaper’s Melville headquarters: Hellville.

Mr. Zell recently said that the Tribune Company—which owns Newsday, the Los Angeles Times, The Baltimore Sun and the Chicago Tribune—was doing so poorly that “we may have to reevaluate a lot of our decisions,” which included selling some Tribune properties.

Newsday was put on the block, and the three usual suspects have shown up: the owners of the region’s two other tabloids, Rupert Murdoch and Mort Zuckerman, and the perennial also-ran of Long Island media efforts, Charles Dolan. (Last time they sold Newsday, he was mad nobody told him.)

The price quoted for the paper keeps changing, but it’s pretty fair to call it a fire sale.

So what does Sam Zell know that these New York media veterans don’t?

For one thing, Sam Zell was never cut out to be a player in a single regional media market. What can the Tribune Company do with a Melville bureau? And is it worth it to sustain one so that their Pentagon coverage can reach Long Islanders?

But for Messrs. Murdoch, Zuckerman and Dolan, Newsday instantly gains them the wealthy, suburban readership their other properties—the New York Post and New York Daily News—haven’t quite been able to crack.

Since the Long Island Press folded in 1977, Newsday has gone without any daily competition in covering the island; the paper tells advertisers it reaches 71 percent of all Long Island residents, themselves a significantly more acquisitive lot than most random samples you could take somewhere else.

“If you asked me five years ago, I would have said it would fetch $1 billion,” said John Morton, a newspaper analyst. “Now it’ll get somewhere closer to $600 million.”

But even at that, the paper is still making money, something Mr. Murdoch can’t say for the Post. Last year, Newsday had an operating revenue of $498 million, according to an S.E.C. filing, and an overall cash flow of $88 million, according to an internal memo.

Newsday is a great property,” said Jason Klein, the president of the Newspaper National Network, a company that sells ads to newspapers. “It’s one of the largest circulation papers that penetrate deeply into an affluent and suburban area.”

And it is rarer still that its entire circulation—which ranked 12th nationally in 2007—is almost entirely suburban (read: deep wallets).

But that’s also precisely the reason that Newsday doesn’t serve much of a purpose for Mr. Zell.

“If he’s going to sell a paper, I figured it would be this one,” said Edward Atorino, a newspaper analyst at the Benchmark Company. “It’s a little too local, especially compared to the Chicago Tribune or the L.A. Times. It doesn’t have the national presence that those papers do—they are national brands.”

In his two-month tour of newsrooms, Mr. Zell has hinted that he’s looking for more consolidation among his news outfits—for his papers to work almost as a wire service for another.

In a late February meeting in the Tribune’s Washington bureau, his comments seemed to indicate that he was interested in creating something like a mini Knight Ridder. He reportedly complained about the papers’ overlaps (competing “fiefdoms” he said); why, then, one could imagine him thinking, would the L.A. Times have a Pentagon reporter when the Chicago Tribune already had one? Ideally, there would be centralized news coming out of the bureau used for various papers, and bodies could be saved. Calling the bureau “bloated,” he reportedly pointed to the L.A. Times Washington bureau chief, Doyle McManus, and said, “Your revenue is down 20 percent. How many of the 47 [newsroom staffers] did you get rid of?”

With that logic, a religiously local paper like Newsday would serve no purpose.

Hey Mort, Chuck, Rupe! Welcome to Hellville, Long Island!