Published: Thu, February 08, 2018
World Media | By Shelia Harmon

Tronc confirms $500M LA, SD newspaper sales; shares +27%

Tronc confirms $500M LA, SD newspaper sales; shares +27%

The Washington Post first reported the potential sale Tuesday and Chicago-based Tronc confirmed Wednesday morning that a $500 million cash deal has been finalized. It would also mean a big shift in the strategy for Tronc, which stated that better promotion for Los Angeles Times brand and journalism was essential to its corporate growth.

Soon-Shiong is the richest physician in America, according to Forbes; he has sold multiple drug companies and owns a network of health startups.

A sale might help end some of the turmoil that has gripped this year, including a publisher suspended after reports surfaced about sexual harassment in his past, a turnover in editors and a successful newsroom union vote.

October 9, 2017: "Los Angeles Times Names Lewis D'Vorkin as Top Editor", The New York Times reports.

Soon-Shiong has been engaged in a battle for control of Tronc with fellow investor Michael Ferro, the pair now own 26 and 27% of the business respectively.

Times staffers have been widely critical of Ferro's tenure at the top of Tronc, sources at and close to the paper have told CNNMoney.

Soon-Shiong, born in South Africa to Chinese parents, also owns a stake in the Los Angeles Lakers basketball team.

In recent weeks, reporters and editors grew concerned that management was keeping them in the dark about the company's strategic plans, which appeared to include the hiring of new editors and outside contributors who would produce centralised content across Tronc's publications.

The transaction could solve two problems for Tronc, which also owns the Chicago Tribune and the New York Daily News.

Soon-Shiong is a major shareholder of Tronc.

Last month, the Times' journalists voted overwhelmingly to form a union, according to the Post. The appointment of the former Forbes executive is met "with some skepticism in the newsroom", per the NYT, which cites journalists anxious that "Mr. D'Vorkin will be more focused on clicks and advertising, rather than pursuing ambitious journalism". As head of Tronc, he reportedly paid himself $5 million for the first quarters of 2018, 2019 and 2020 for being a consultant through his company, Merrick Ventures, LLC, totaling $15 million. Tronc had fended off previous efforts to buy the company outright or peel off the California newspapers. That sparked fears the business side would wield undue influence in editorial matters.

The LA Times, like many newspapers, has been downsizing its staff as readers turn away from print to online news platforms.

"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.

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