The financial position of the New York Times continues to shock those who thought it was a permanent part of the global media scene.

Judging by a statement issued in New York overnight, the company isn’t going the way of the Tribune Co and sliding into bankruptcy, but the financial condition of the world’s best known paper and its other assets is critical. It could be on life support in 2009 if it can’t raise more cash, cut costs and find some generous creditors.

If it wasn’t the New York Times, with all the credibility that goes with the paper, many analysts would be wondering just when the company would be forced to file for bankruptcy, such was the dismal nature of the financial position painted in a statement yesterday. It told of dwindling cash, falling revenues, rising liabilities and talks with lenders about a smaller-than-expected refinancing early next year.

The group released the statement a day after the paper reported that the owning company was looking at raising $US225 million from selling or mortgaging its New York HQ.

The collapse of the Tribune Co under an impossibly high $US12.9 billion debt burden and little equity (due to the structure devised for buyer Sam Zell, a Chicago billionaire), seems to have helped produce the NYT statement, which was made to coincide with the appearance of the senior executives at a media conference.

The statement said the company was looking at potential asset sales and was in discussions with lenders as it looks to what will be a very tough 2009. Ad spending falling, circulation dropping and banks reluctant to lend to some companies and sectors, such as the media.

The statement revealed that advertising last month at the Times fell from October’s low levels as consumer confidence plunged. Entertainment, real estate and automotive advertising categories were the worst hit.

“There is no doubt that 2009 will be among the most challenging years we have faced and more steps will be needed,” chief executive Janet Robinson said in the statement.

The company said it was also in discussions with lenders regarding debt maturing in 2009 and 2010. About $US400 million is due in May, which it is attempting to renegotiate.

“We have no intention or need of fully replacing the $400m credit facility expiring next year because our total borrowing under both agreements is projected to be significantly less than $800m, and currently is approximately $400m,” James Fallo, chief financial officer, said.

The company also confirmed a report that it plans to borrow up to $225m against the value of its stake in its New York HQ via a form of a sales-leaseback as well as pursue other financing alternatives that include revolvers (revolving credits), public offerings or private placements.

It had $US46 million in cash as of the end of the third quarter, but is expected to take a charge of $US48 million to $US53 million between the this quarter and the first quarter of 2009 after rationalising its New York distribution operations.

The Times executives did not specify which assets are currently under review for potential sales. But US analysts speculate that the New England newspapers including the Boston Globe and Worcester Telegram & Gazette, the 17% stake in the Boston Red Sox baseball team and the website could go; if there are buyers willing to offer good prices.

“Although the feasibility of asset sales at this time is uncertain given the current market and credit environment, it’s incumbent upon us to make sure that we carefully evaluate our properties to determine if they remain a strategic fit and, given the outlook for the business and their financial performance, make sense to continue to be a part of the Company,” Mr Fallo said.