The Los Angeles Times has been sold to local billionaire and physician Patrick Soon-Shiong for $500 million, ending a strained tenure under Tronc, the owner of the Chicago Tribune.
The Los Angeles Times and Tronc confirmed the sale early Wednesday.
The deal, which is expected to close in the spring, includes the San Diego Union-Tribune and various other titles in the California News Group. It will put the Times back in local hands for the first time since 2000, when it was sold to Chicago-based Tronc.
"I think there are folks here that think that local ownership has always been the right answer for the Times. Any local ownership is better than continuing to be owned by a company in Chicago," LA Times business reporter James Koren told KPCC ahead of the sale.
The deal requires Soon-Shiong’s private investment vehicle Nant Capital LLC to assume $90 million in pension liabilities, according to Tronc.
"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," said Soon-Shiong, who is also a Tronc shareholder, in a statement.
The LA Times Guild offered congratulations on its site:
"We would like to congratulate Patrick Soon-Shiong as the new owner of the Los Angeles Times.
Our readers expect and deserve the high-quality, independent journalism that has defined The Times for decades. This is important to Los Angeles, California and the nation.
The L.A. Times Guild looks forward to working with a local owner who can help us preserve The Times as a guardian of our community and as the voice of the American West."
As the Associated Press reports, Soon-Shiong was born in South Africa to Chinese parents and came to L.A. in the 1970s, going to work as a resident at UCLA Medical School.
Forbes puts his worth at $7.8 billion, a fortune he made developing the cancer-fighting drug Abraxane, AP reports.
For Tronc, divesting from its Southern California properties will help pay down debt, lower its pension liabilities and improve its cash position, CEO Justin Dearborn said in a statement.
"We are pleased to transition leadership of the Los Angeles Times and The San Diego Union-Tribune to local ownership, and we are certain that the journalistic excellence in Southern California will continue long into the future," Dearborn said.
The company said it is launching a new national digital growth strategy through its Tribune Interactive division, which will be led by Ross Levinsohn, who had been the Times' CEO and publisher.
Levinsohn was recently placed on leave after NPR reported on accusations of workplace misconduct, including two sexual harassment lawsuits in which he was defendant. The company said an independent investigation cleared Levinsohn of any wrongdoing.
The 136-year-old Times still faces plenty of turmoil. Its newsroom staff recently voted to unionize even as the newspaper faced repeated shakeups in its leadership. The previous editor-in-chief, Lewis D'Vorkin, was pushed out and replaced by veteran Chicago journalist Jim Kirk.
"It's been a soap opera without a happy ending, and each new episode seems to get worse and worse," Gabriel Kahn, a professor at USC's Annenberg School of Communication and Journalism, told KPCC.
Kahn said he hoped the sale will bring stability to the troubled newspaper, but Soon-Shiong still faces a difficult road ahead.
The past decade has seen a major upheaval in technology and user habits, but in that time the newspaper has remained largely a print product, Kahn said.
"Patrick Soon-Shiong is very rich and very smart, but in order to pull this off, he is going to have to put more than just the $500 million he paid for these two properties right now," Kahn said. "He's going to have to put in tens of millions more and make a consistent effort to invest in the digital product, stop the hemorrhaging of the newsroom talent that's been leaving the place and, you know, hopefully articulate a real vision about what he wants this newspaper to be."
Poynter Institute media business analyst Rick Edmonds says papers have fierce competition for digital ad spending that leaves little left over.
"Google and Facebook really suck up a great deal of the advertising dollar and the advertising growth."
Edmonds says the LA Times should think beyond ads and focus on new ways of making money, like increasing the number of paying digital subscribers, or putting on more sponsored events.
Neiman columnist Ken Doctor told Take Two this morning that Soon-Shiong would do best if he follows a straightforward model: satisfy readers and get more digital subscriptions.
"The New York Times example, the Washington Post example, those papers now generate more than half of their revenue from readers," Doctor said. "It passed 100,000 digital subscribers earlier in the year, but it really needs to double and triple that number."
"He's going to have to hire a new executive core," Doctor added. "He may replace the editor, who is a Chicago native, and he's going to have to start from scratch, in a way."
But Doctor also said it's not a total uphill climb.
"[He] has a newsroom of more than 400 that is still nationally recognized."
And Edmonds wonders if Soon-Shiong is all that focused on turning a profit.
"I'm not sure that his objective will so much be to make it more profitable and to make a lot of money on it as it will be to stabilize and solidify its journalism for the community."