James Erik Abels and Tom Van Riper
Forbes
Sam Zell's Tribune Co. (nyse: TRB - news - people ), now famous for a $8.2 billion buyout deal last year that boosted the company's debt to more than $12 billion, about six times its market cap has big financial woes. But despite those numbers, some finance insiders think Zell's creditors will keep betting on him even if the advertising market tightens further because of his willingness to sell off assets and cut operating expenses.
The cash-starved New York Sun went under Monday and Wednesday the Minneapolis Star Tribune said it was skipping a $9 million quarterly debt payment, prompting worries of a potential bankruptcy.
Standard & Poor's Wednesday put newspaper giant Gannett (nyse: GCI - news - people ) on credit watch, concerned revenue declines could accelerate at the newspaper giant. The company downplayed the move in a statement with CEO Craig Dubow saying its "underlying fundamentals remain strong."
With the nation's financial system in the grips of a credit crunch, Gannett and the rest of the already-weak newspaper industry are in a tough spot. With sinking credit ratings and tight debt markets will make it tougher for them to invest and survive.
At a Baa3 rating, the New York Times' debt rating isn't junk--yet. The company is hoping that recent consolidation of production facilities and plans for staff reductions will bring enough cost savings to reduce its $1.1 billion debt load. The tough market for selling newspapers may make that impossible.
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