Sam Zell is looking to unload the Chicago Cubs baseball franchise that came with his ill-timed $8.2 billion acquisition of Tribune Media Co., and the most aggressive suitor appears to be dot-com billionaire Mark Cuban. The New York Times reports that he offered $1.3 billion for the the team, Wrigley Field, and the team's stake in Comcast SportsNet Chicago.

But of course, Cuban, who has accumulated $1.7 million in fines during his tenure as owner of the Dallas Mavericks, is not without his critics, to say the least. He's too arrogant, too brash, and not gentlemanly enough, they say. He had trouble cracking into the old boy's network of the NBA, and Major League Baseball is said to be even more reluctant to change.

But if Cuban is the high bidder -- and the league will let him in -- it'll be a great day for the Cubs and for baseball. The team hasn't won a World Series since 1908 but, given Cuban's deep pockets and superhuman competitive drive, the Cubs would likely get the extra boost they need to finally win one. Plus, Cubs and Cuban have the same first three letters, so it's pretty much meant to be.

Baseball has dealt with a lot of scandal lately involving performance-enhancing drugs, and it's about time we added a passionate renegade to the current regime of old bureaucrats. And yes, I'm talking to you Ted Lerner.

Tribune, formerly a public newspaper and broadcast company, lost the publisher of its largest newspaper, the LA Times, and the editor of its flagship, the Chicago Tribune. New controlling shareholder Sam Zell is in trouble, burdened by buyout debt he may not be able to pay.

Most analysts saw another modest drop in newspaper ad revenue this year. It has been much worse than that. At some companies in the industry, ad sales are off nearly 15%. An analyst recently dropped his price target on The New York Times Company (NYSE: NYT) to $8 and said the firm would have to cut its dividend. The stock currently trades at $13.21.

The two public companies which are at most risk for not making it another year are Gatehouse (NYSE: GHS) and McClatchy (NYSE: MNI). Both took on big debt loads buying newspaper properties. Both are seeing operating income chopped by falling sales. Either could hit debt service problems which could force them to sell properties of file for Chapter11.

Gatehouse dropped as low as $1.11 in the last few days. Its 52-week high is $19. McClatchy is down to $4.93 from a 52-week high of $28.65. Gatehouse is the most troubled with a high dividend and $1.3 billion in long-term debt.

Newspapers companies have gone from being in a tight spot to being candidates for liquidation. They are a short-seller's dream.

Douglas A. McIntyre is an editor at 24/7 Wall St.

The Tribune is not a public company anymore, but CEO Sam Zell says enough about his plans that it might as well be.

According to The New York Times, Zell "announced a set of deep cuts, saying that shrinking revenue left them no choice." One of the things that means is fewer pages devoted to news as newsprint use is reduced.

The Tribune carries a lot of debt, so it is in more trouble that other chains such as The New York Times Company (NYSE: NYT) and Gannett (NYSE: GCI). But, other large paper operations including McClatchy NYSE: MNI) and Gatehouse (NYSE: GHS) also have massive debt burdens from money they borrowed to expand their empires.

What all of this means is that more reporters and editors will lose their jobs and the typical reader will get a newspaper that is thin as toilet paper. For newspaper company investors it means that stocks, some already down 50% to 70% in the last year, are going down even further.

The trouble also may spell the end of nearly a century of big papers like The New York Times being the news sources of record. The company recently cut 100 people, most of them from the news operation. Covering major national and international stories is becoming more difficult and at some point it may be impossible.

There is always CNN.

Douglas A. McIntyre is an editor at 247wallst.com.

The special committee set up by Rupert Murdoch to ensure the editorial independence of the Wall Street Journal is about as useful as a referee at a professional wrestling bout. The sad thing is that News Corp. (NYSE: NWS) is paying members of this committee $100,000 a year to let Chief Executive Rupert Murdoch do whatever he wants to do anyway.

A case in point is the abrupt resignation of Managing Editor Marcus Brauchli. The lackeys -- oh, I mean the special committee set up following the Dow Jones acquisition -- felt compelled Monday to issue a press release to show publicly that they were on the case. At least, that's what it tried to do.

"Although our charter does not directly envision a process for dealing with a resignation, Committee members expressed the view that learning of the Brauchli matter after the fact failed to meet the letter and the spirit of the agreement," the committee said in a statement. The committee met with Brauchli alone and was told that "his action was not the result of any problem with editorial interference or attempts to impose an ideological viewpoint. He insisted that News Corp. has been `scrupulous' about the integrity of the paper."

Yeah, right.

Murdoch has meddled in his media properties for decades. No special committee is going to stop his lust for power. Anyone who expected otherwise is either naive or deluded. Murdoch will have no inhibitions of messing with Newsday if he succeeds in buying Newsday from Sam Zell's Tribune Co. because beggars can't be choosers.

To the surprise of no one, the newly private Tribune Co. is probably going to sell Newsday. The once-venerable New York paper, like all metro dailies, has fallen on hard times and Tribune's new CEO and owner Sam Zell has got a mountain of debt to pay down.

According to The Wall Street Journal . Long Island-based Cablevision Systems Corp. (NYSE: CVC) and New York's Daily News as potential buyers. Rupert Murdoch probably would love to buy Newsday and combine it with News Corp's (NYSE: NWS) New York Post, but I am not sure whether the antitrust regulators would allow it. He is trying to merge everything but the editorial staffs of the Post -- never a hugely profitable enterprise -- with Newsday to save money in a joint operating agreement, the Journal says.

After spending $5 billion for Dow Jones, Murdoch needs to pick all of the low-hanging fruit he can. I expect this deal to happen. Maybe it will lead to others for papers that buyers are eager to unload. Perhaps, Murdoch might buy other Tribune papers from Zell such as The Baltimore Sun or Los Angeles Times. As the Australian tycoon showed in chasing Dow Jones, influence matters as much to him as profits. Gaining more big papers furthers that goal at the expense of shareholders.

Sam Zell is one of the best real estate investors around and therefore one of the few people whose prognostications for the housing market are actually worth listening to.

And that's good news because, speaking on CNBC's Squawk Box this morning, Zell had this to say about the housing market: "I think starts have already pretty much bottomed out," Zell said. "I think the housing market this spring will begin its recovery phase."

If the recovery will indeed begin that quickly -- and the bottom has already been reached -- than beaten-down REITs have to be considered for investment.

If you're willing to invest based on the idea that Zell is likely to be right but aren't comfortable picking REITs on your own, Vanguard's REIT ETF (AMEX: VNQ) may be worth a look. After a big drop in 2007, the ETF yields around 5%.

Starwood (NYSE: HOT) is hosting a meeting with sell side community at 7:45 a.m. Eastern time today.

Sam Zell reported a 7.72% stake in HOT on Feb. 4.

Smith Barney says: "We view as a strong vote of confidence in HOT's underlying fundamentals (and asset value) by a sophisticated real estate investor."

HOT overall option implied volatility of 40 is near its 26-week average according to Track Data, suggesting non-directional risk.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Just for fun, the newspaper industry that is facing excruciating pressure as news seekers and advertisers flock to the internet, now has another negative catalyst to deal with. The housing slowdown and sharp drop in sales is causing a significant drop in newspaper advertising for real estate, a significant chunk of many small papers' overall revenue.

The Tribune Company saw a 40% year over year decline in its real estate ad sales for November. Gannett (NYSE: GCI) is also looking at a 27% drop.

This short-term revenue drop that's a result of macroeconomic factors could extend into the long-term. When the housing market does rebound, will people go back to newspapers? Or will have the internet continue to make inroads, hastening the decline of newspapers into oblivion.

As bleak as the outlook for the industry looks, several highly-respected investors have made large bets on it. Sam Zell recently acquired Tribune, and Warren Buffett has been a long-term investor in the sector.

For contrarian investors, the industry may be worth a look.

Sam Zell formally completed his buyout of the Tribune Company yesterday. It only cost $8.2 billion and months of difficult negotiations -- but now he can go out and get the pitching his newly acquired Chicago Cubs have long needed to win it all. Well, maybe not. Word on the street is that he plans to sell the Cubs and Wrigley Field for a cool billion as soon as he can.

Zell has made it clear that he plans on allowing the various units within the Tribune Company to stand on their own feet. By his count, there are over 60 entities within the company, and each one needs to strike out on its own. As Zell put it, "As I've said over and over again, there are something like 60 entities in the Tribune Co. and I view it as 60 ways to get lucky."

MAJOR PAPERS:

• The Wall Street Journal's "Deal Journal" reported that Sam Zell's planned buyout of Tribune Company (NYSE: TRB) is contingent on the receipt of a solvency opinion, and that this is the first time they have ever seen a deal dependant on this.
• The WSJ's "Heard on the Street" reported that Countrywide Financial Corporation (NYSE: CFC) may not be out of the woods yet. Despite executives promising a return to profitability, there is still a risk the company may eventually seek bankruptcy protection or "resort to huge sales" of new stock.
• U.S. private equity group JC Flowers "is understood" to have walked away from the auction for troubled bank Northern Rock, the Financial Times reported.
• Rupert Murdoch is shaking up the management of News Corp (NYSE: NWS.A), the Financial Times reported, giving his son, James Murdoch, control over the company's European and Asian operations, and appointing two trusted executives to lead Dow Jones & Company Inc (NYSE: DJ) and the Wall Street Journal.

WEB SITES:

• Barron's Online's "Weekly Trader" said AutoNation Inc (NYSE: AN) looks attractive now, despite hovering near a multi-year low. The company has also been on a slow but steady quest to diversify away from unpopular domestic brands by snapping up luxury and import dealerships.

Tribune (NYSE: TRB) is recently up $32.08.

CNBC's David Faber says the TRB deal could close very soon. TRB has expected its $34 per share sale to Sam Zell, private equity, debt holders and employees to be closed by year-end. The FCC granted temporary waivers to complete the deal. TRB announced this morning it intends to use cash on hand to reduce total amount of bridge loan to $1.6 billion from $2.1 billion. TRB January option implied volatility of 33 is below a level of 79 from Dec 6th and below its 26-week average of 38 according to Track Data, suggesting the close of the $34 deal is near.

Daily Options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Many people are puzzled over Sam Zell's highly leveraged $8.2 billion purchase of the Tribune Co. in light of the decline in the newspaper business. One of the diamonds in the deal, however, is the Chicago Cubs, and indications are that he intends to quickly mine that gem for all it's worth.

According to the Los Angeles Times, the Tribune Co.'s (NYSE:TRB) avowed intention to sell the Cubbies may be considerably more complex than most franchise sales. The Tribune owns not only the ball club, but also the ballpark, and 25% of the cable TV network that carries its broadcasts, and could choose to sell them separately.

The Cubs, despite a century-long title drought, continue to draw capacity crowds to legendary Wrigley Field, over three million last year alone. This year, to the surprise of most prognosticators, the team is fighting for the NL Central pennant, great timing for the sellers. According to Forbes, the team alone is currently worth $592 million, on an operating income of $22 million.

It is getting very hard to believe that Sam Zell can close his deal to buy-out the public shareholders at The Tribune Company (NYSE: TRB). Shareholders approved the $34 a share deal on Tuesday, but the stock stands at $28.98.

This morning, the Tribune announced that revenue for July fell another 5.9% to $467 million. Advertising revenue tumbled 10.3% to $247 and classified advertising revenues decreased 18.2%. At least sales at the company's TV and radio operations were flat.

According to The Motley Fool "On Monday, in part because of the expected continuing slide in a number of the company's properties, Standard & Poor's took the company's debt to a B + rating from BBB-, casting it smack-dab into the world of "junk." And as if that weren't enough, S&P has indicated that it'll further knock the rating down to B after the deal is completed." The company's debt burden will be $8.2 billion.

A quick look at the Tribune's latest 10-Q shows operating profit of just under $196 million. Perhaps on an annual run rate that could be $800 million a year. Of course, this would depend on revenue staying steady, and that is not going to happen.

Douglas A. McIntyre is a partner at 24/7 Wall St.

For the past few years, things have been nearly perfect for the private equity world. Credit was cheap and public companies were certainly willing to go private.

But, of course, things are much different now. In fact, there is some doubt that mega deals -- such as for TXU Corp. (NYSE: TXU) and SLM Corp. (NYSE: SLM) -- may not get done because of the tough credit environment.

However, can buyers legally walk from a deal?

Not very easily, actually. After all, when a buyer signs a merger agreement, it's an enforceable contract. And, if it is breached, the consequences can be severe. In fact, in some cases, the buyer may be required to complete the deal. The New York Times looks at this issue in depth today. (registration required).

Top Ten stocks with implied volatility above 105 with volume over 1,000 contracts: TMA, RAS, DFC, BZH, WCI, SPF, IMB, LEND, NFI & QLTI.

Hewlett-Packard (NYSE: HPQ) volatility Elevated into EPS & Outlook. HPQ is recently down $1.02 to $47.42. HPQ will report EPS on 8/16. American Technology say's "anticipate strong July quarter; despite outperformance, we remain buyers." HPQ August straddle is priced at $2.55. HPQ September option implied volatility of 36 is above its 26-week average of 27 according to Track Data, suggesting larger risk.

Wal-Mart Stores, Inc. (NYSE: WMT) volatility above average as WMT trades near 1-year low. WMT is recently down $2.18 to $43.92. WMT reported 2nd quarter net sales increased 8.8% to $91.99 billion, income from continued operations increased 4.1% to $2.98 billion compared to the same period a year ago. Smith Barney says "in addition to the reduction in full-year guidance, management cited continued economic pressure on consumers, which we believe may pressure the stock in the near-term." WMT September option implied volatility of 24 above its 26-week average of 20 according to Track Data, suggesting larger risk.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.