Midway (MWY) blames its unfortunate situation on Sumner Redstone’s decision to sell National Amusement’s majority stake in the company in December. That change in ownership has apparently allowed him to make “substantial progress” on restructuring National Amusements’ debt, as Redstone said this morning. But it was disastrous for Midway as evidenced by today’s announcement.

“This was a difficult but necessary decision,” Matt Booty, Midway’s president, chairman and CEO, said in a statement. “We have been focused on realigning our operations and improving our execution, and this filing will relieve the immediate pressure from our creditors and provide us time for an orderly exploration of our strategic alternatives. This Chapter 11 filing is the next logical step in an ongoing process to address our capital structure. Midway enters this process with strong underlying fundamentals, as evidenced by solid fourth-quarter sales that exceeded expectations in spite of a challenging retail and general economic environment.”

Apparently, Booty wrote that last line without a hint of irony. But clearly it’s soaked through with it. Fact is, Midway hasn’t had a profitable year in nearly a decade. And given the somber outlooks of far more potent rivals like Electronic Arts (ERTS) and Take-Two (TTWO), and its anemic game catalog, this year will be no different.

Speaking at the Dow Jones and Nielsen Media and Money conference this week, Redstone, whose company is suing YouTube seeking $1 billion in damages for what it terms “massive intentional copyright infringement,” said content still rules the digital domain. “Copyright compels creativity,” he said. “It furnishes the incentive to innovate. If you limit the protection of copyrights, you stifle the expression of new ideas. Think about it. You cannot pay the rent posting videos on YouTube. And most aspiring novelists do not aspire to self-publish. You cannot make it as a musician or filmmaker or writer without the shelter of effective and enforced copyright legislation.

“… If content is king,” Redstone concluded, “then copyright–the legal and moral position that the fruits of intellectual labor should be protected in order to encourage creative expression–is its castle.”

And YouTube is, clearly, the Trojan rabbit that’s already made it past the gates …