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Wednesday, Feb. 7, 2018|12:59 p.m.
LOS ANGELES– A biotech billionaire struck a $500 million offer Wednesday to purchase the Los Angeles Times, ending the paper’s quarrelsome relationship with its Chicago-based corporate overseers and bringing it under regional ownership for the very first time in 18 years.
The arrangement in between Los Angeles medical business owner Dr. Patrick Soon-Shiong and Tronc Inc. represents the current instance of an abundant, civic-minded private buying a paper from a huge corporation.
Soon-Shiong, 65, collected his fortune in part by developing a cancer drug in 1991. He was currently a major shareholder in Tronc, among the richest guys in Los Angeles and the nation’s wealthiest doctor by Forbes’ estimate, with a net worth put at $7.8 billion.
The deal includes the purchase of The San Diego Union-Tribune and some other publications and the presumption of $90 million in pension liabilities.
Soon-Shiong takes over at a time of turmoil at the paper. The Times just changed its top editor, the 3rd such switch in 6 months, and publisher Ross Levinsohn had actually been on unsettled leave after it was learned he was a defendant in two unwanted sexual advances suits elsewhere. Tronc stated Wednesday he was cleared of any misdeed.
Also, journalists voted last month to unionize for the very first time in the paper’s 136-year history.
Tronc, previously known as the Tribune Co., owns the Chicago Tribune and numerous other U.S. newspapers, including the Baltimore Sun and New York Daily News.
Clashes between the Times and its Chicago-based owner appeared not long after it got the West Coast paper in 2000. Personnel at the Times bristled over what it considered a string of bad choices made from hundreds of miles away in Chicago, and the paper went through a succession of leading editors and publishers.
Among them was editor John Carroll, who led the paper to 13 Pulitzer Prizes but resigned under heavy pressure to cut staff. His follower, Dean Baquet, left after 15 months and is now managing editor at The New york city Times.
Press reporters at the Times were likewise alarmed by the current hiring of several news executives who reported to business executives, and not to news editors. Traditionally, the editorial and service sides of a paper are kept different to preserve journalistic credibility.
As news spread of a potential sale Tuesday, cheering appeared in the Times newsroom. After the deal was announced, the union representing the paper’s journalists stated it “anticipates dealing with a local owner who can help us preserve The Times as a guardian of our neighborhood and as the voice of the American West.”
Maya Lau, a Times law enforcement reporter, tweeted: “Congratulations to Patrick Soon-Shiong and hooray for a return to local ownership of the Los Angeles Times & & San Diego Union Tribune.”
With the newspaper market tossed into deep turmoil by the web, Amazon creator Jeff Bezos purchased The Washington Post in 2013 for $250 million. The exact same year, Boston Red Sox owner John Henry purchased The Boston Globe for $70 million.
” We discover ourselves going back to where we were a century back when a handful of wealthy owners controlled huge, prominent newspapers,” said Al Tompkins, a senior faculty member at the Poynter Institute, a journalism think tank in St. Petersburg, Florida.
” Here’s the distinction: The ownership today does not assure financially rewarding returns. You take it over knowing it isn’t almost as successful as it might have been 20 or 50 years ago. Today it’s a thinner margin, and it gets thinner every day.”
Soon-Shiong, who also holds a minority interest in the Los Angeles Lakers, said in an interview with the Times in 2015 that as a major stockholder in the paper, he was dissatisfied with the method it was being run.
” I am concerned there are other programs, independent of the newspaper’s needs or the fiduciary commitments to the practicality of the organization,” he stated. “My goal is to try and protect the integrity and the practicality of the paper.”
Tronc said the sale will enable the Chicago business to follow a more aggressive growth technique concentrated on news and digital media. It said it is buying a majority stake in online product evaluation company BestReviews for an undisclosed quantity.
Veteran media service analyst Ken Doctor stated a go back to local ownership will bring back pride at the Times.
The concern is whether a new owner will do more than halt lowerings by reinvesting, as Bezos and Henry did at their newspapers, and set the Times on a new path.
” Provided the huge challenges still dealt with by news publishing in the age of Google/Facebook ad duopoly and still-onrushing digital disturbance, even a billionaire has his work cut out for him,” Medical professional said.
Christopher Weber and John Rogers added to this report.