When the Tribune Company went private in December, Sam Zell completed a deal that many had said he couldn’t get done. Now comes the hard part—staying solvent.

In an unusual two-phase deal, an Employee Stock Ownership Plan set up by Zell borrowed nearly $8 billion on Wall Street to buy all 240 million of Tribune’s outstanding shares, taking the company private and leaving the employee plan holding all of the stock. The real-estate tycoon put in just $315 million of his own money and got the right to buy about 40 percent of the company’s stock for $500 to $600 million over the next decade.

The ESOP gives Tribune Company workers a big stake in the future of the company, but little say in what that future will be. Despite his small investment, Zell became chairman and ceo as part of the deal. The company loaded itself up with so much debt that it will struggle to pay the interest—about $1 billion a year. As you see below, that is nearly as much as its 2008 estimated cash flow. Tribune has little room for error.

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A blunt-talking motorcycle rider who wears jeans and cowboy boots to Wall Street meetings, Zell is known for impeccable timing, which he displayed in February when he sold Equity Office Properties Trust for $39 billion, a record price at commercial real estate’s peak. When he made his bid for Tribune last April, he got commitments from banks in the midst of a lending frenzy. That wouldn’t have happened even three months later, as the lending environment began to unravel.

But since April, Tribune’s outlook has dimmed. Its publishing revenues fell 7 percent...

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