The owner of the Los Angeles Times is in talks to sell the newspaper to a billionaire medical entrepreneur.
Dr. Patrick Soon-Shiong, a major shareholder of parent company Tronc Inc., would pay $500 million for the newspaper and the San Diego Union-Tribune, a person with knowledge of the deal told The Associated Press on Tuesday after word of the sale was first reported by The Washington Post and Times.
The person, who spoke on condition of anonymity because the sale hadn’t been finalized, said the deal was coming together quickly, but cautioned it could still fall apart.
The sale would come amid turmoil at the Times, which has suffered through years of cutbacks and a revolving door of leadership in top positions.
The top editor was replaced last week for the third time in six months and Publisher Ross Levinsohn is on unpaid leave after revelations he was a defendant in two sexual harassment lawsuits at other companies. Journalists voted last month to unionize for the first time in the paper’s 136-year history.
Soon-Shiong, who is currently working on a cure for cancer, is said by Forbes to be the nation’s richest doctor.
He made the bulk of his fortune selling two of the drug companies that he founded for a total of nearly $9 billion a decade ago. Forbes put his current wealth at $7.8 billion.
He owns more than a quarter of shares in Chicago-based Tronc, the company formerly known as Tribune Publishing. It owns 10 U.S. newspapers, including the Chicago Tribune, Baltimore Sun and New York Daily News.
The move would be 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 and 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.”
Tronc did not issue any public statement about the deal and a spokeswoman for Soon-Shiong did not immediately respond to a request for comment.
Word of the possible sale was met with cheers in the Times newsroom, according to tweets from reporters.
Soon-Shiong’s holdings include not only his Tronc stock but also a minority interest in the Los Angeles Lakers that he purchased 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 declined to say if he planned to buy the newspaper, although he acknowledged that as a major stockholder he was unhappy with the way it 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.”
If approved, the sale would come about a week after veteran Chicago journalist Jim Kirk was named editor in chief to replace Lewis D’Vorkin, whose short tenure was marked by clashes with staff.
Kirk, 52, had briefly served in the job during a management overhaul from August until November, when D’Vorkin joined the paper.
Reporters at the Times were alarmed by recent hiring of several news executives who reported to business executives and not to news editors. That sparked fears the business side would wield undue influence in editorial matters. Traditionally, the editorial and business sides of a paper work separately to maintain journalistic credibility.
Local ownership for the first time in 18 years would restore pride at the Times, said veteran media business analyst Ken Doctor.
The question is whether a new owner will do more than halt cutbacks by reinvesting, as Bezos and Henry did at their newspapers, to set the Times on a new path.
“Given the huge challenges still faced by news publishing in the age of Google/Facebook ad duopoly and still-onrushing digital disruption, even a billionaire has his work cut out for him,” Doctor said.