SAN DIEGO (CNS) - The San Diego Union-Tribune will soon have a new owner, its fifth in the last decade, with Los Angeles biotech billionare Patrick Soon-Shiong agreeing to purchase the Los Angeles Times and the Union- Tribune from parent company Tronc.
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.
"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," Soon- Shiong said.
Tronc, previously known as Tribune Co., has owned The Times since 2000 and the Union-Tribune since 2015. It also owns the Chicago Tribune, The Baltimore Sun, the New York Daily News, the Orlando Sentinel, the South Florida Sun-Sentinel and several other smaller newspapers.
"This transaction allows us to fully repay our outstanding debt, significantly lower our pension liabilities and have a substantial cash position following the close of the transaction," Tronc CEO Justin Dearborn said. "We will have a versatile balance sheet that will enable us to be even more aggressive in executing on our growth strategy as a leading player in news and digital media."
According to Tronc, the sale -- which is expected to close in the late first quarter or early second quarter of the year -- includes a $500 million cash payment, and Soon-Shiong will assume $90 million in pension liabilities.
Soon-Shiong is the founder and CEO of Culver City-based NantHealth, one of Los Angeles' wealthiest residents and a minority owner of the Los Angeles Lakers. He's the latest billionaire to buy a major newspaper, following in the footsteps of Amazon founder Jeff Bezos, who bought the Washington Post in 2013. That same year, Red Sox owner John Henry purchased the Boston Globe and, in 2014, Minnesota billionaire and Timberwolves owner Glen Taylor bought the Minneapolis Star-Tribune.
For the Union-Tribune, which this year marks its 150th anniversary, Soon-Shiong will be the fifth owner in the past decade. The Copley family had owned the newspaper for its entire run until 2009, when it sold the paper to Los Angeles-based investment firm Platinum Equity.
Douglas Manchester bought the paper for $110 million in 2012 and three years later sold the company's Mission Valley buildings to local developers for $50 million, and the publishing business for $85 million to Tribune.
The Union-Tribune employs about 260 people, down from nearly 2,000 under the Copleys, the paper reported. Much of the downsizing has come from outsourcing things like printing, packaging and distribution, but the news and advertising departments have also experienced widespread layoffs.
Soon-Shiong has limited connections to San Diego, including timeshares he's owned since 2001 at the Four Seasons Residence Club Aviara in Carlsbad. He's also vice chairman of Viracta Therapeutics, an anti-cancer biotech in Cardiff.
Union-Tribune publisher and editor Jeff Light on Tuesday called the idea of a Southern California media company `a very compelling proposition." Light was quoted in the Union-Tribune saying "the business opportunity and the journalistic opportunity are very big."
Soon-Shiong, 65, a medical entrepreneur and native of South Africa, had been rumored several years ago to be among a group of wealthy Angelenos who were interested in buying The Times, the newspaper reported. His interest in the paper was formalized in May 2016 when he invested $70.5 million in Tronc. His current stake is 26 percent.
The sale comes after a stormy period for The Times, which has seen three editors in six months, its publisher placed on unpaid leave amid a sexual harassment investigation, and a vote to unionize the newsroom.
The deal came together over the past five days and took many observers by surprise, according to The Times. Tronc had fended off previous efforts to buy the company outright or peel off the California newspapers. Tronc had insisted The Times was key to its growth strategy given its proximity to Hollywood, technology hubs and the Pacific Rim.