LA Times sold for $500M to billionaire doctor

LOS ANGELES — A billionaire doctor struck a $500 million deal Wednesday to buy the Los Angeles Times, ending the paper’s quarrelsome relationship with its Chicago-based corporate overseers and bringing it under local ownership for the first time in 18 years.

The agreement between Los Angeles-based medical entrepreneur Dr. Patrick Soon-Shiong and Tronc Inc. marks the latest instance of a rich, civic-minded individual buying a newspaper from a big corporation.

Soon-Shiong is a major shareholder of Chicago’s Tronc Inc., one of the richest men in Los Angeles and, according to Forbes, the nation’s wealthiest doctor, with a net worth of $7.8 billion.

The deal includes The San Diego Union-Tribune, various titles in the California News Group and the assumption of $90 million in pension liabilities.

Soon-Shiong takes over in a time of turmoil at the paper. The Times just replaced its top editor, the third switch at the position in the newsroom in six months. Publisher Ross Levinsohn had been on unpaid leave after revelations that he was a defendant in two sexual harassment lawsuits elsewhere. Tronc announced Wednesday that Levinsohn has been cleared of any wrongdoing and would be reinstated as CEO of its newly reorganized Tribune Interactive division.

Journalists voted last month to unionize for the first time in the paper’s 136-year history.

Clashes between the Los Angeles Times and Tribune Co., which changed its name to Tronc Inc., erupted not long after it acquired the West Coast paper in 2000. Staff at the Times bristled over what it considered a string of bad decisions made from hundreds of miles away in Chicago. Tronc owns the Chicago Tribune.

The editor of the Los Angeles Times, John Carroll, who led the paper to 13 Pulitzer Prizes, resigned under heavy pressure to cut staff. Before he left, he asked an old friend and billionaire philanthropist if he would consider buying the paper.

Publisher John Puerner stepped down at the Times, as did his successor, Jeffrey Johnson, shortly after.

Dean Baquet, who took over for Carroll, left after 15 months. He is now the executive editor at The New York Times.

Big companies

The sale of the Los Angeles Times is in keeping with one of two trends in media ownership: big companies getting bigger and wealthy investors taking on newspapers as philanthropic endeavors, said Al Tompkins, a senior faculty member at the Poynter Institute.

In 2013, Amazon founder and CEO Jeff Bezos bought The Washington Post for $250 million. Boston Red Sox owner John Henry bought The Boston Globe for $70 million.

“We find ourselves returning to where we were a century ago when a handful of wealthy owners controlled big influential newspapers,” Tompkins said. “Here’s the difference: The ownership today does not promise lucrative returns. You take it over knowing it isn’t nearly as profitable as it might have been 20 or 50 years ago. Today it’s a thinner margin and it gets thinner every day.”

Soon-Shiong also holds a minority interest in the Los Angeles Lakers, acquired in 2011 from Magic Johnson, the team’s former superstar and current president of basketball operations.

In an interview with the Times last year, Soon-Shiong acknowledged that as a major stockholder, he was unhappy with the way the Los Angeles Times was being run and felt a need to ensure its survival.

“I am concerned there are other agendas, independent of the newspaper’s needs or the fiduciary obligations to the viability of the organization,” he said at the time. “My goal is to try and preserve the integrity and the viability of the newspaper.”

After The Washington Post first reported a potential sale Tuesday, cheers spread through the Times newsroom. After the deal was formalized, the union representing the newspaper’s journalists congratulated Soon-Shiong.

“Our readers expect and deserve the high-quality, independent journalism that has defined The Times for decades,” a union statement said Wednesday. “The LA 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.”

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.”

Tronc said the deal will allow it to follow a more aggressive growth strategy focused on news and digital media. Acquisitions will continue to be a big part of its plan, Tronc said Wednesday, and the company announced that it’s buying a majority stake in online product review company BestReviews for an undisclosed amount.