Biotech billionaire and philanthropist Patrick Soon-Shiong has agreed to buy the Los Angeles Times, the San Diego Union-Tribune, and related community publications for $500 million, the papers' parent company, Tronc (Tribune Online Content), has announced.
As part of the sale, which was first reported by the Washington Post, Nant Capital, Soon-Shiong's private investment vehicle, will assume an additional $90 million in underfunded pension liabilities associated with the Union-Tribune. Soon-Shiong, founder and CEO of NantHealth and a major shareholder in Tronc, had been considered one of several potential buyers of the Times after it was sold in 2000 to Tronc's forerunner, the Tribune Company. In 2007, local billionaires Eli Broad and Ron Burkle attempted to purchase the Tribune Company, and music mogul David Geffen also reportedly inquired about buying the Times after Chicago businessman Sam Zell led a leveraged buyout of the company.
The past several months have been especially chaotic at the Times, with considerable turnover within the paper's top ranks, including three editors in six months. For years the Times and Tronc had clashed over the paper's management and direction, as the parent company — which filed for bankruptcy in 2008 and continued to struggle with declining revenues — ordered multiple rounds of layoffs. With the news staff reduced to around four hundred from more than thirteen hundred at its peak in the late 1990s, Times journalists voted in January to unionize, even as the company was looking at the option of establishing a network of non-staff contributors to produce content.
According to the Post, Soon-Shiong had challenged Michael W. Ferro, the investor who controls Tronc, on several issues, including his spending on lavish corporate perks. Nieman Lab reports that Ferro previously used his board power to push Soon-Shiong out as vice chair and worked to make it more difficult for him to buy the Times. According to Tronc — which still owns the Chicago Tribune, the Baltimore Sun, the Hartford Courant, the Sun-Sentinel, and the Orlando Sentinel — proceeds from the $500 million sale will enable it "to fully repay [its] outstanding debt, significantly lower [its] pension liabilities, and have a substantial cash position."
Soon-Shiong, a Giving Pledge signatory whose fortune is estimated at $7.8 billion, is a minority owner of the Los Angeles Lakers and joins the ranks of other billionaires who have purchased major newspapers in recent years, including Amazon founder Jeff Bezos (Washington Post for $250 million), Red Sox owner John Henry (Boston Globe for $70 million), and Timberwolves owner Glen Taylor (Minneapolis Star-Tribune for $100 million).
"We look forward to continuing the great tradition of award-winning journalism carried out by the reporters and editors of the Los Angeles Times, the San Diego Union-Tribune, and the other California News Group titles," Soon-Shiong said in a statement.
"The return of the Los Angeles Times to local (and, importantly, private) ownership could signal the most significant ownership change in the industry since Bezos's 2013 purchase of the Washington Post," wrote Nieman Lab's Ken Doctor. "The critical question: Beyond staunching the bleeding of staff, which would have continued under Tronc, how and where will the new ownership reinvest?"