UPDATE 1-Tribune posts $4.5 bln loss, pays down debt

(Adds details on debt, severance charges, background)

By Robert MacMillan

SAN FRANCISCO, Aug 13 (Reuters) - Tribune Co reported a $4.5 billion quarterly loss on Wednesday, hurt by the write-down of the value of many of its newspapers and it paid off hundreds of millions of dollars in debt due later this year.

The publisher's lenders and employees are relying on the company to make enough money to avoid defaulting on billions of dollars in loans it incurred when Chief Executive and real estate magnate Sam Zell took the company private in 2007.

The pressure to make those payments comes amid declining revenue for the company's newspapers, including the Chicago Tribune and the Los Angeles Times, as their readership and advertising dollars dwindle.

Tribune paid $807 million to cover debt due in December 2008. Some of that money came from the sale of its Long Island newspaper Newsday to Cablevision Systems Corp. (CVC.N). Tribune has an additional $593 million in debt to pay due June 2009.

Tribune reported a second-quarter loss of $4.5 billion, including a $3.8 billion loss from continuing operations because of a non-cash writedown of its newspapers, and a $705 million loss on discontinued operations from the sale of Newsday.

"The operating results are not in (Zell's) favor. They're not so draconian as to remove the positive of the Cablevision sale, so it's a holding pattern," said Outsell Inc media analyst Ken Doctor.

Tribune's writedown was mainly for newspapers it acquired when it bought Times Mirror Co. They include the Los Angeles Times and Newsday.

Debt stood at $12.5 billion at the end of the second quarter. Operating cash flow fell 2 percent to $221 million. Tribune reported $161 million in cash and cash equivalents.

Revenue fell 6 percent to $1.1 billion. Publishing advertising revenue fell 15 percent, and classified ad revenue fell 26 percent.

"Our publishing results are, for the most part, in line with industry trends, which remain consistent with what we reported in the first quarter," Zell said.

Online ad revenue fell 4 percent because of weakness in classifieds. Circulation revenue also fell, led by declines in Chicago and Los Angeles, though Tribune's papers in Baltimore and southern Florida reported a rise in circulation revenue. Broadcasting revenue rose 4 percent.

Tribune also has been reducing its expenses, including redesigning its newspapers and cutting staff. During the second quarter, expenses fell 6 percent.

The company plans to sell more properties and use the proceeds to pay debt. The most notable are the Chicago Cubs and the baseball team's home, Wrigley Field. Tribune included no new information about the sale's progress. (Editing by John Wallace and Derek Caney)