L.A. Times sold for $500M

Photo: L.A. Times

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 (soon-shong) 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.

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 endeavours, 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.