The publisher of the Los Angeles Timesand theChicago Tribune sought bankruptcy protection yesterday as it struggles to renegotiate its estimated $13 billion (£8.7 billion) debt mountain.

The Chapter 11 filing ended a difficult day for the American newspaper industry, in which The New York Times Company looked for a multibillion-dollar loan against its headquarters.

The Tribune Company, which also owns the Chicago Cubs baseball team, filed its request for bankruptcy protection in a court in Delaware after being hit by falling sales and advertising revenues in the increasingly harsh economic environment.

The company is thought to need more time to restructure about $10 billion of the $13 billion in debt that it took on last year when it was bought out by Sam Zell, a Chicago-based property entrepreneur.

Mr Zell, who sold his commercial property group to Blackstone, the private equity firm, for almost $39 billion early last year, paid $8.2 billion for Tribune, personally investing $315 million, and was backed by the Tribune employee share ownership scheme.

After yesterday’s Chapter 11 filing, Mr Zell blamed “factors beyond our control”, which he said had “created a perfect storm – a precipitous decline in revenue and a tough economy, coupled with a credit crisis that makes it extremely difficult to support our debt . . . We believe that this restructuring will bring the level of our debt in line with current economic realities and will take pressure off our operations.”

Analysts said that under the terms of Tribune’s agreements with its lenders, which include JPMorgan Chase, Merrill Lynch, Bank of America and Citigroup, the company’s debt cannot rise above nine times its pretax profits without requiring renegotiation.

Tribune made a third-quarter loss from continuing operations of $124 million, down from a profit of $84 million at the same time last year. Mr Zell has already sold Newsday, a Long Island-based newspaper in New York State, to Cablevision Systems for $632 million and a 10 per cent stake in CareerBuilder, an online jobs site, to Gannett, a media rival, for $135 million in an attempt to reduce Tribune’s debt.

The Chicago Cubs are not included in the bankruptcy filing and remain on the auction block, Tribune said yesterday.

Under the terms of yesterday’s filing, the company will continue to operate its media businesses. Barclays agreed to provide a letter of credit facility to the company, as well as maintaining an existing securitisation facility so that it can remain in business. Tribune is the second-largest American newspaper publisher in terms of revenue and the third-largest in terms of circulation. It also operates 23 television stations.

Meanwhile, The New York Times Company, publisher of The New York Times, retained Cushman & Wakefield, a real estate company, to advise it on securing financing against the newspaper group’s headquarters in Manhattan. The New York Times Company is thought to want to borrow up to $225 million against its 58 per cent share of the Eighth Avenue building, either in the form of a mortgage or sale and leaseback.

The publisher has $800 million available through two lines of credit, but one is due to expire in May and the company is thought to be concerned that it could be difficult to replace in the tougher economic climate. The New York Times Company said in October that sales were down by 51 per cent.

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