NEW YORK (AP) – Tribune Co.’s $650 million sale of Newsday is an important step toward alleviating its debt burden – for this year.

Now the Chicago company needs to move on its next big asset sales, including the Chicago Cubs baseball team and Wrigley Field, in order to meet its obligations to creditors looming in 2009.

The deal announced Monday puts one of Tribune’s largest newspapers in the hands of cable operator Cablevision Systems Corp., which like Newsday is based on New York’s Long Island.

Investors have been skeptical about the benefits to Cablevision from the deal, given that it hasn’t operated a newspaper before and the newspaper industry is struggling as readers and advertisers move to the Internet.

“It’s incredibly hard to fathom why they want to expand into the newspaper business,” said Richard Greenfield, a media analyst with Pali Capital. “Why are they putting dollars towards newspapers rather than buying their own stock?”

For Tribune, there’s no doubt why the deal make sense: The company needs cash. Last December, Tribune bought out its public shareholders in an $8.2 billion deal orchestrated by real estate mogul Sam Zell, and now it’s struggling to service that debt.

Zell had originally hoped to keep Tribune’s newspaper and broadcasting businesses intact, but it had to change course and consider options for Newsday following a rapid deterioration in the newspaper business this year.

Tribune last week reported an 11 percent decline in first-quarter newspaper revenues, which have been hit hard by the slumping economy and online competition.

Tribune now seems to be covered on a $650 million lump-sum debt payment coming due in December as well as other near-term obligations, but analysts say it needs to get moving on other asset sales in order to be in shape to deliver on another $750 million debt payment due in June 2009.

“This is certainly the first step in alleviating near-term liquidity concerns,” said Mike Simonton of Fitch Ratings, a bond ratings agency, but he added that it “does not get them out of the woods necessarily.”

“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.

The company’s shares fell 45 cents, or 1.8 percent, to $24.52 Monday.

Newsday is the 11th largest newspaper in the country, according to the latest figures from the Audit Bureau of Circulations, with 379,613 average paid weekday copies in the six-month period that ended in March.

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