Plenty of headlines and a number big enough to suggest that Patrick Soon-Shiong overpaid, based on recent comps in the market anyway. But nothing much in the way of nitty-gritty details when it comes to his deal for the L.A. Times, the San Diego Union-Tribune and smaller publications, including the twice-weekly Glendale News-Press and Spanish-language Hoy, among others … One wag with more than a bit of insight wondered if the deal was classified as an acquisition of assets, and whether that might have any effect on the newly established union representing newsroom employees at the Times. Seems a small-scale case study can be found in the recent sale of LA Weekly, where new owners acquired assets rather than stock. Those terms allowed them to bust the union for openers by retaining fewer than half of the employees represented by the collective bargaining outfit for the newsroom there. No reason to rehash all that – Brian Calle seems to have weathered the storm he touched off upon arrival at the helm of the alternative pub, so let’s leave him to work L.A.’s room for awhile and see how things go … No reason, either, to think Soon-Shiong is out to run an end-around on the union at the Times– his letter to employees the day after the deal was officially announced was just about pitch-perfect in terms of calming the waters on Spring Street … Can’t overlook the price Soon-Shiong paid, though – the $500 million in cash looks to be about twice the going rate of recent deals based on estimated cash flows, and he also took on $90 million in pension obligations. And yes, the multi-billionaire biomedical man can afford it – but he didn’t pile up his billions by tossing money around willy-nilly … The designation of an asset acquisition might explain some of Soon-Shiong’s willingness to pony up as much as he did. That sort of a deal allows the buyer to take a relatively higher rate of depreciation on the assets going forward, reaping significant tax benefits … No reason to think Soon-Shiong bought the Times solely as a tax shelter, though. And that leaves a big parlor game of guessing about any motivation beyond civic engagement … Might as well get started, so here’s an early guess: Soon-Shiong will find fellow billionaires to buy the Daily Pilot in Newport Beach and the Union-Tribune in San Diego while tapping some familiar faces to get a grip on the Times … Soon-Shiong deserves plenty of credit for sheer guts, however you slice it. Yes, his billions nearly render the deal a rounding error on his net worth. And he’s got a stake in the Lakers for street cred in case you’re not impressed with his ongoing quest to beat cancer … It still might be an act of bravery to step into a culture at the Times that’s gone from velvet-lined to vitriolic in recent years as financial performance has sagged … How bad has it gotten at the one-time trophy of American journalism? Consider that shares of its Chicago-based parent zoomed to an all-time high in after-hours trading on initial reports that it was close to unloading the Times … Sullivan Says: Keep in mind that there’s broad consensus in the community of business here that Los Angeles is better off with a strong Los Angeles Times – and that might make the price Soon-Shiong paid look like a bargain before all is said and done.
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