Journalists at The Los Angeles Times have repeatedly clashed with their Chicago-based parent company, Tronc. So when they heard that a local billionaire was closing in on a deal to buy the newspaper, many of them cheered. Someone even popped a bottle of champagne.
On Wednesday, it was official: The Los Angeles Times was being sold to Patrick Soon-Shiong, a health care mogul and former surgeon, for $500 million.
The deal includes The Times’s sibling paper, The San Diego Union-Tribune, and smaller publications in the California News Group. The deal, with Dr. Soon-Shiong’s private investment arm, Nant Capital, also includes the assumption of $90 million in pension liabilities.
The agreement — which Tronc announced early on Wednesday, when many Times employees were still in bed — brings to a close a tumultuous period marked by the ouster of top leaders, the suspension of the newspaper’s publisher and a contentious unionization effort.
In recent months, the frustration in the Times newsroom erupted into public view, as The New York Times, HuffPost and other news outlets published articles on the tensions between staff and management at the 136-year-old newspaper.
With The Times receiving national attention for reasons having nothing to do with its exemplary coverage of sexual harassment in Hollywood or the natural disasters in its backyard, Tronc had a public-relations problem just as it was trying to develop new strategies for producing and distributing its journalism.
The sale, which is expected to be completed in the coming weeks, would leave The Times under local ownership for the first time since the Chandler family sold the Times Mirror Company to a Tronc predecessor, the Tribune Company, in 2000. The entry of Dr. Soon-Shiong would end a period of corporate control that included severe layoffs, cost cuts and, for a time, a frat house culture in its top ranks.
By agreeing to sell the paper, Tronc also seems to be retreating from the national and international ambitions the company entertained after Michael W. Ferro Jr. became its chairman and biggest shareholder two years ago.
“We are pleased to transition leadership of The Los Angeles Times and The San Diego Union-Tribune to local ownership,” Justin Dearborn, Tronc’s chief executive, said in a statement. “We are certain that the journalistic excellence in Southern California will continue long into the future.”
If the sale has come as a relief to Tronc executives and Times journalists alike, it leaves Dr. Soon-Shiong with the unenviable task of owning a major daily paper at a time when the newspaper business is increasingly reliant on the support of deep-pocketed patrons. With the purchase, he would become the latest wealthy businessman to take ownership of a struggling newspaper in a big city, following Jeff Bezos with The Washington Post, John Henry with The Boston Globe and Sheldon Adelson with The Las Vegas Review-Journal.
“We look forward to continuing the great tradition of award-winning journalism carried out by the reporters and editors of The Los Angeles Times, The San Diego Union-Tribune and the other California News Group titles,” Dr. Soon-Shiong said in a statement on Wednesday.
Dr. Soon-Shiong — who grew up the son of Chinese immigrants in apartheid South Africa and largely made his fortune selling generic medicines and developing a new cancer drug — became a major Tronc shareholder and vice chairman two years ago as part of the company’s effort to stave off a takeover attempt by Gannett, the publisher of USA Today. In a 2016 interview with The New York Times, Dr. Soon-Shiong said he considered newspapers a “public trust.” But his relationship with Mr. Ferro soon deteriorated, leading to Dr. Soon-Shiong’s removal from Tronc’s board last year.
He takes over one of the most decorated newspapers in the country, with 44 Pulitzer Prizes. But The Times has struggled in recent years as newspapers across the country have lost heft and cultural importance.
Last decade, the paper weathered the cost-slashing reign of Samuel Zell, who took Tribune Company into bankruptcy. In 2014, after emerging from bankruptcy proceedings, the company spun off its newspaper division, creating Tribune Publishing.
When Mr. Ferro, a Chicago entrepreneur and a former owner of The Chicago Sun-Times, took a major stake in Tribune Publishing in 2016, he introduced grand plans that included the use of artificial intelligence. He also rebranded the company as Tronc, which stood for Tribune online content, a name that has gotten laughs in newsrooms ever since. (The brand name appears formally as tronc, in lowercase letters, in company statements.)
The Times, with bureaus in cities including Lagos and Rio de Janeiro, was to be the linchpin of Tronc’s global ambitions. But over the past year the paper proved too much to handle. In August, Tronc ousted top members of the Times management team, including Davan Maharaj, its editor and publisher, and installed the former Yahoo executive Ross Levisohn as publisher. Lewis D’Vorkin, a former chief product officer at Forbes, later joined the paper as editor in chief.
Editors and reporters had hope for their new leaders, but the relationship quickly soured. After a recording of a staff meeting was leaked to The New York Times in the fall, Mr. D’Vorkin chastised employees, calling anyone involved in the leak “morally bankrupt.” Newsroom tensions rose.
Last month, on the day when journalists at the paper celebrated their first successful unionization vote since its founding in 1881, Mr. Levinsohn was placed on leave after National Public Radio reported that he had been accused of sexual harassment at two previous jobs. Morale sank further with the suspension of the Times business editor Kimi Yoshino.
To calm the discord, Tronc last week replaced Mr. D’Vorkin with Jim Kirk, a former publisher and editor of The Sun-Times, who had joined Tronc in August.
Tronc said on Wednesday that its investigation into the publisher, Mr. Levinsohn, had found no wrongdoing. He will remain at the company in a new role: chief executive of a newly formed division called Tribune Interactive.
Despite the tensions between the staff and Tronc leadership over the past year, Times reporters distinguished themselves with an investigation into the former dean of the medical school at the University of Southern California and their coverage of The Walt Disney Company’s ties to the city of Anaheim.
“Our readers expect and deserve the high-quality, independent journalism that has defined The Times for decades,” The Times Guild steering committee said in a statement. “The L.A. Times Guild looks forward to working with a local owner who can help us preserve The Times as a guardian of our community and as the voice of the American West.”
Inside The Times, there is hope that the paper might pursue a business model similar to those at The New York Times and The Washington Post, which have seen increases in paid subscriptions. But the future remains murky. The publisher job is open, and it was not immediately clear if Dr. Soon-Shiong plans to name a new top editor in place of Mr. Kirk.
Dr. Soon-Shiong, a part owner of the Los Angeles Lakers, has a fortune that Forbes estimates at some $8 billion, but he is not so well known as some of the city’s other billionaires, including David Geffen and Eli Broad, whose names have surfaced in the past as potential buyers of The Times.
Dr. Soon-Shiong, who donated to Hillary Clinton’s presidential campaign and met with Donald J. Trump when he was the president-elect, has also come under scrutiny for his medical research and business dealings, leaving the Times newsroom with a new potential problem: an owner who is himself a newsworthy figure.
At first glance, though, Dr. Soon-Shiong represents a welcome alternative to Tronc, whose scattershot plans have baffled some media analysts.
“Their future under Tronc was just going to lurch from one crisis to the next, because Tronc’s strategy was so opaque and the quality of leadership they brought aboard was so dismal,” said Bill Grueskin, a professor at the Columbia Journalism School and a former top editor at Bloomberg News and The Wall Street Journal. “Almost anything has to be better than what they were facing.”
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