The Chicago Tribune Co. files for bankruptcy and the New York Times looking to sell its new tower

The Tribune Company. filed for bankruptcy protection today, Dec. 8, 2008, as the owner of the Chicago Tribune, the Los Angeles Times, the Chicago Cubs and other properties tries to deal with $13 billion in debt.

On the same day, the New York Times Company is mortgaging its new glass tower and considering selling its only valuable asset to just stay afloat. But that’s not all, McClatchy is shopping around a buyer for the Miami Herald.

Advertising revenue declined severely this year because of the recession, putting pressure on newspaper companies. There are 31 or more major daily newspapers for sale.

Monday’s filing, made in bankruptcy court in Delaware, could give Tribune time to raise cash by selling off assets in a tight credit market. It also could put additional pressure on its lenders to ease their targets, possibly in exchange for higher interest rates, as many other newspaper companies already have done.

The company entered court protection with $13 billion in debt and $7.6 billion in assets.

Zell told employees in a memo that the Cubs franchise is not part of the bankruptcy filing. He also said the company’s operations, including newspapers and broadcast outlets, will function as before during the bankruptcy protection period.

“So, how did we get here? It has been, to say the least, the perfect storm,” Zell wrote. “A precipitous decline in revenue and a tough economy have coupled with a credit crisis, making it extremely difficult to support our debt. All of our major advertising categories have been dramatically impacted.”

Tribune’s biggest unsecured creditors are its lenders, led by JPMorgan Chase Bank and Merrill Lynch Capital Corp. JPMorgan is the administrator of $8.57 billion in senior debt and holder of about $1.05 billion of that.

One has to ask what the Tribune executive editors were thinking when they bought the Times-Mirror properties just a few years ago. Then, Zell has to kick himself for thinking he was the smartest guy in the room to take the whole mess private. Most of its debt comes from the complex transaction in which the company was taken private, with employee ownership, by Zell last year.