Tribune's Newsday deal is one step in easing debt

"It doesn't get them over the hump, but it gets them in the right direction," said Dave Novosel, media analyst at Gimme Credit, a bond research firm. "They still have other debt maturing and they'll need to sell other assets to meet these funding requirements."

The next step for Tribune is selling the Chicago Cubs and Wrigley Field. Together, the two could fetch as much as $1 billion, which would get the company past the 2009 payment.

Once those sales are behind it, Simonton said, there should be a better indication of whether Tribune would face pressure to sell more assets.

Much would depend on whether the company's new management is able to stabilize Tribune's newspapers, something that's too early to tell. "A year and a half from now it will be more clear if further asset sales are necessary," Simonton said.

Tribune is still marketing the Cubs, while it's in talks with an Illinois state agency about Wrigley Field. Those talks are complicated by the fact that the agency, which also owns U.S. Cellular Field, where the Chicago White Sox play, wants laws that restrict changes to Wrigley Field loosened.

Another option for Tribune would be selling its roughly 30 percent stake in Food Network back to E.W. Scripps Co., which owns the rest of the rapidly growing cable TV channel. Analysts estimate that stake could be worth well over $500 million.

Scripps, however, is going through changes of its own as it splits into two separate companies, one with the cable networks and another with a group of newspaper and TV stations. That split is expected to be complete by the end of the second quarter.

In order to get favorable tax treatment, Tribune will retain a 3 percent stake in a joint venture to be formed containing Newsday as well as several related assets, including Newsday.com, some regional magazines and the free New York City daily newspaper amNewYork. Cablevision will hold the remaining 97 percent. The deal will be financed by $650 million in debt provided by Bank of America Corp. Tribune will receive $612 million in cash and another $18 million in prepaid rent for leases of facilities that Newsday will continue to use, and its 3 percent stake in the venture will be valued at $20 million.

Both Cablevision and Tribune declined to comment on the deal beyond a joint statement the companies put out Monday.

Cablevision, which is controlled by the Dolan family, has about 3.1 million subscribers in the New York metro area and owns Madison Square Garden, the NBA's New York Knicks and the NHL's New York Rangers.