Los Angeles Times Said to Be Nearing Sale to Billionaire Doctor
Posted February 6, 2018 9:11 p.m. EST
Updated February 6, 2018 9:12 p.m. EST
Employees at the Los Angeles Times have been hoping for many months that a white knight would offer them a way out of their contentious relationship with their parent company, Tronc.
Now, their white knight may have arrived.
Patrick Soon-Shiong, a billionaire Los Angeles doctor and one of Tronc’s major shareholders, is close to buying the Times, two people familiar with the negotiations said Tuesday, in a $500 million deal that would include the newspaper’s sister publication, The San Diego Union-Tribune.
A deal could be announced as soon as Wednesday, although negotiations could still fall apart, the people said.
Selling the Los Angeles Times would be a significant pullback for Tronc, which harbored national and international ambitions after Michael W. Ferro Jr. became the company’s chairman and biggest shareholder two years ago. Soon-Shiong publicly feuded with Ferro last year, as they vied to increase their stakes in the company in apparent attempts to outmaneuver each other for control. Tronc removed Soon-Shiong from its board last year.
The potential sale of the Times, one of the most prominent and decorated newspapers in the country, comes after months of turmoil and management turnover, during which journalists have been increasingly at odds with Tronc executives in Chicago and the leaders they have sent to run the paper’s newsroom.
Frustration among employees has mounted since August, when Tronc abruptly ousted top leaders at the Times, including Davan Maharaj, the paper’s editor and publisher.
Many journalists had initially expressed optimism that new leadership would soothe what had become an adversarial relationship between some employees and managers. But within months, journalists at the Times became embroiled in an increasingly public battle with their new publisher, Ross Levinsohn, and their new editor-in-chief, Lewis D’Vorkin.
Just days into D’Vorkin’s tenure last fall, employees questioned his handling of a dispute between the paper and the Walt Disney Co., which had banned Times journalists from attending advance film screenings following the publication of an investigative series on the company’s ties to the city of Anaheim. Discontent intensified during a staff meeting when D’Vorkin said that anyone involved with leaking a recording of a previous meeting to The New York Times was “morally bankrupt,” according to several people in attendance.
An aggressive attempt by the Los Angeles Times’ management to thwart a unionization effort further exacerbated the schism between employees and managers. Then, even as employees celebrated their vote to unionize for the first time in the paper’s 136-year history, Levinsohn was put on leave after National Public Radio published a report that detailed allegations of sexual harassment against him when he was at other companies.
In recent weeks, reporters and editors grew concerned that management was keeping them in the dark about the company’s strategic plans, which appeared to include the hiring of new editors and outside contributors who would produce centralized content across Tronc’s publications.
Last Monday, in an attempt to counter swelling mistrust in the newsroom, Tronc installed Jim Kirk, a veteran journalist and former editor and publisher of the Chicago Sun-Times, as the paper’s editor-in-chief. D’Vorkin was named the company’s chief content officer. If Soon-Shiong succeeds in acquiring the Times, he would become the latest billionaire to take ownership of a struggling newspaper in a big city, following Jeff Bezos (The Washington Post), John Henry (The Boston Globe) and Sheldon Adelson (the Las Vegas Review-Journal).
Soon-Shiong became a major shareholder in Tronc, formerly called Tribune Publishing, in May 2016 as the company and its chairman, Ferro, tried to fend off a takeover attempt by Gannett, the publisher of USA Today. Soon-Shiong was also named the company’s vice chairman.
Many employees at the Times have of late adopted the mantra “anyone but Ferro,” but it is also not clear what decisions Soon-Shiong, who largely made his fortune selling generic drugs and developing a new type of cancer drug, would make as the paper’s owner.
In an interview with The New York Times at the time of his initial investment, Soon-Shiong, who grew up in apartheid South Africa, said he considered newspapers a “public trust” and wanted to preserve them. “I recognize the press is a very valuable tool for the community, where it really adds to democracy,” he said.
But Soon-Shiong’s relationship with Ferro quickly deteriorated, leading to Soon-Shiong’s removal from the board last year.
News of the proposed sale was first reported by The Washington Post.
Should Soon-Shiong succeed in buying the Times, he would take control of a paper with a rich legacy that includes 44 Pulitzer Prizes and deep roots in Los Angeles. But for more than a decade, it has also been a paper wracked by unrest and instability, surviving through the bankruptcy of its parent company and a spinoff that saddled Tronc with debt. The paper has had five publishers in the past decade.
Tronc would likely use the sale proceeds to pay down that debt and invest in a digital transformation.