Add this to Patrick Soon-Shiong’s increasingly full plate: Everything that will come with keeping his 24 percent stake in tronc Inc. after he closes a reported $500 million deal to acquire the Los Angeles Times and other California newspapers from the Chicago-based company.
The biotech billionaire said he plans to retain his shares in tronc – valued at about $165 million as of press time – in an email to the Business Journal last week. Tronc will retain the Chicago Tribune, New York Daily News, Baltimore Sun and Orlando Sentinel, among other dailies, after the sale of the Times is finalized.
Soon-Shiong’s status as the company’s second-largest shareholder adds another line item to an already busy schedule as he becomes more active in his role as a media mogul. Initiatives already on the to-do list include:
The Times move to the new headquarters in El Segundo by July.
Negotiations with a newly formed union that represents newsroom staff at the Times.
Assessments of the properties besides the Times, a roster that includes the daily San Diego Union-Tribune, community newspapers in Glendale, Burbank, La Canada and Newport Beach, another publication in Orange County, and nine weeklies and two monthlies in San Diego County.
Some of those chores are in the works and others are apparently on hold pending the final negotiation of a “transition services agreement.”
The agreement is intended to cover Soon-Shiong’s use of tronc technology and the company’s administrative and human resource operations over the next 12 to 18 months.
The negotiations have been a sticking point on the deal, according to Phyllis Pfeiffer, president of the San Diego Union-Tribune Community Press, which operates the weekly and monthly publications there as part of what is currently tronc’s California News Group.
The deal was announced in February with expectations it would close by the end of March or early April, a finish line that’s been moved by a month.
Soon-Shiong declined comment on the negotiations and timing of the deal.
Tronc representatives said they “still anticipate closing this deal,” and declined further comment.
Road trip
Soon-Shiong’s disclosure that he plans to keep his stake in tronc, and the outlines of his to-do list, took shape as he embarked on a Southern California road trip to meet with the staffs of a number of the newspapers. He met with staffers of several of the San Diego publications at the Union Tribune’s office on April 16. That followed a similar gathering at the Times offices downtown on April 13, where Soon-Shiong announced plans for the El Segundo move.
Soon-Shiong’s deal for Times and other newspapers – which includes the assumption of about $90 million in pension obligations on top of $500 million in cash – has generally been viewed as coming at a premium based on current valuations. Amazon.com Inc.’s Jeff Bezos paid $250 million for the Washington Post in 2013, and while the publication has seen gains in readership and revenue since then, the Times has spent recent years stumbling through various upheavals.
Tumult at Times
The L.A. Times has seen eight publishers and more than a half-dozen editors since Tribune Co. – the predecessor of tronc – bought the newspaper in 2000.
Parent tronc fended off a hostile bid from Gannett Co., a national newspaper chain, last year. Recent weeks saw the company’s chairman and top shareholder Michael Ferro leave his post and sell off his stake under a cloud related to charges of sexual harassment in previous workplace settings.
Changes in store for the Times remain unclear. Soon-Shiong has spoken in generalities about boosting investments in the newsroom, but has been sparse on any details related to the deal.
“He’s still mostly an empty vessel” in terms of his public vision for the publication, according to Gabriel Kahn, journalism professor at USC.
Also unclear is Soon-Shiong’s strategic outlook on his investments in newspaper companies.
“It’s very hard to improve the bottom line of a print newspaper company,” Kahn said.
In any case, Soon-Shiong’s proposed purchase of the Times continues his trajectory up the ranks of the city’s elite. The founder of Nant Capital, topped the Business Journal’s annual list of Wealthiest Angelenos last year, with a personal fortune estimated at $18 billion.
Soon-Shiong’s main business has gained attention from the White House to academic and medical circles around the world for his ambitions to cure cancer. He remains an adjunct professor of surgery at UCLA, where he also serves as executive director of the Wireless Health Institute. He holds a minority interest in the Los Angeles Lakers, has invested in an e-sports franchise.
Immediate concerns
The Times’ pending move to El Segundo appears to take top priority for the organization once the deal closes. Next up will likely be negotiations with the newsroom union, which has already portrayed the shift to the new location as a concession of sorts.
“(The move) will probably greatly lengthen the commutes of many of the newsroom members, and we expressed those concerns to Patrick at the town-hall meeting,” said Matt Pearce, part of the Los Angeles Times Guild.
Another matter that might come up in collective bargaining is a recent survey that the union presented as evidence of pay disparities that track to race and gender.
The union released data on the pay rates of its 323 recognized members two days before Soon-Shiong visited the downtown office to meet with Times employees.
The study found that the median salary level for white men in the Times newsroom is thousands of dollars a year more than the median for women and non-whites in comparable positions.
