• by Erik Sass  @eriksass1, July 16, 2008

Pigs are circling a blue moon: The New York Post and the New York Daily News, locked in a rivalry verging on vendetta, are in discussions to combine printing, distribution and back-office functions, according to The New York Times--which first reported the story on its Web site Tuesday afternoon, citing unnamed sources with knowledge of the negotiations.

Although unconfirmed, the notion is plausible, as New York's two dominant tabloids are suffering from the same secular downturn affecting the rest of the newspaper business, compounded by a slowing economy.

According to the most recent data from the Audit Bureau of Circulations, during the six-month period ending in March of this year, the Daily News saw Sunday circulation fall 8.3% to 704,157, while the New York Post's Sunday circ fell 8.6% to 401,315 (the Post's weekday circulation is neck-and-neck with the News, at just over 700,00).

Further, the tabloids' respective owners, Rupert Murdoch and Mort Zuckerman, were both recently snubbed in the Tribune Co.'s auction of Newsday, which was sold to Cablevision for $650 million. The media moguls had long coveted Newsday, hoping to cut costs by combining printing, distribution, and back-office operations.

With Newsday off the table, it seems the longtime rivals are ready to reach a compromise--although the trash-talking will likely continue unabated.