Sam Zell hosted a state-of-the-company conference call today, but get the backstory first: the New York Times has an engaging piece that’s fortunately almost all about the business end of the Tribune Company. It doesn’t look encouraging: “Its debt service bill this year is almost $1 billion, not including a $650 million balloon payment from the takeover financing that is due in December, and one for $750 million due in mid-2009.”

In short: Zell only put up $315 million, or about 4%, of the original $8.2 billion purchase. In order to shrug off the demands of stockholders, he had to go into an immense amount of debt to a much smaller group, one that is presumably less patient about getting paid.

The company’s worse-than-expected performance, particularly in the print business, has made it harder for him to meet his debt obligations, which is why he’s scrambling to unload the Cubs–which isn’t working, thanks to pushback from local media and government–and enforcing substantial cutbacks. It’s also been suggested that the company’s 31% stake in the Food Network would follow. Also: no more Soul Train music awards.

The culprit: classifieds; ironically, real estate classifieds are killing the company. Doesn’t Sam Zell own all the real estate? Where does he advertise, anyway?

More subtly discouraging: The brass is starting to say weird things. Zell, today: “It’s certainly a very changed environment. Employees are starting to take initiative, something that never happened before.” Unclear how they managed for the decades previous. Randy Michaels, also today: “Sam is the smartest man I’ve ever met, but he can’t solve the revenue problem. I can’t solve the revenue problem. The only people who can solve the revenue problem are the people out there on the streets who can decide whether to make another call at 4 o’clock or not.”  Fortunately, they do seem to be enjoying themselves.

The other fallback plan is to beef up the broadcast wing; to that end Zell’s pulling in all the Clear Channel people he can find. The WSJ has the full scoop. As the year progresses, expect this to get more interesting.