Federal regulators approve sale of Los Angeles Times to Patrick Soon-Shiong
Federal regulators have approved Los Angeles billionaire Dr. Patrick Soon-Shiong’s planned purchase of the Los Angeles Times, which would return one of the nation’s largest newspapers to local control.
Soon-Shiong last month agreed to pay $500 million to buy The Times, the San Diego Union-Tribune, Spanish-language Hoy and several community newspapers from Chicago media company Tronc.
The Federal Trade Commission and Department of Justice reviewed the transaction and determined that it would not be anticompetitive, according to a person familiar with the review but not authorized to speak publicly.
The FTC, on its website, said it had granted an “early termination” to its review of the sale — removing a major hurdle for the transaction, which is expected to close in late March or early April.
Soon-Shiong is purchasing the newspapers through his investment vehicle, Nant Capital, which also has agreed to assume about $90 million in pension liabilities.
Tronc spokeswoman Marisa Kollias confirmed that the company on Monday received the blessing of the Justice Department to sell the properties known as the California News Group to Soon-Shiong.
A Justice Department spokesperson declined to comment. An FTC spokesperson was not immediately available.
Soon-Shiong, 65, is one of Los Angeles’ wealthiest residents. The surgeon-turned-entrepreneur was born in South Africa to Chinese parents and created a fortune by developing promising pharmaceuticals and selling the companies that he built. He is a part-owner of the Lakers and also the second-largest shareholder of Tronc. He has been an investor in Tronc for nearly two years.
Soon-Shiong has said he wants to buy The Times and Union-Tribune to return the newspapers to prominence.
“I fervently believe that the Los Angeles Times, the San Diego Union Tribune, Hoy and other titles in the California News Group must continue to serve as the beacon of truth, hope and inspiration binding our communities,” Soon-Shiong wrote in a letter last week to company employees.
“We purchased the California News Group because we wanted to preserve the integrity, honesty and fairness we’ve observed in our decades as avid readers of the LA Times,” he wrote. “The titles in the California News Group will be the voice and inspiration not just for California but also for the nation.”
The sale of The Times and the San Diego Union-Tribune will further shake up Southern California’s already tumultuous media landscape. But employees hope that Soon-Shiong will usher in an era of stability for The Times. The 136-year-old institution in recent years has been roiled by management turnover and struggles with its Chicago-based corporate parent.
The purchase would cap a particularly stormy period for the newspaper, which has seen three editors in six months, its publisher placed on unpaid leave amid a sexual harassment investigation and a historic vote to unionize the newsroom.
Meanwhile, Tronc on Wednesday released its fourth-quarter earnings, which again underscored the challenges facing one of the nation’s largest newspaper companies.
The company reported a $373,000 net loss, or 1 cent a share, for the quarter, compared with net income of $19.4 million, or 53 cents, in the year-earlier period.
Tax issues and restructuring costs weighed on the bottom line. Tronc took a one-time, $10.8-million deduction in deferred tax assets because of the changes to U.S. tax code. The company also had restructuring costs, in part because of its decision to outsource its information technology department and payments for vacant office space. It also incurred costs related to “completed and potential acquisitions,” according to its filing with the Securities & Exchange Commission.
Tronc generated fourth-quarter revenue of $435 million, up 2.3% compared with $425.4 million in the fourth quarter of 2016. The most recent quarter was boosted by $32.6 million in revenue from the tabloid New York Daily News, which the company acquired in September.
In addition to The Times and the Union-Tribune, Tronc owns the Chicago Tribune, Baltimore Sun, Hartford Courant, Orlando Sentinel and the South Florida Sun-Sentinel.
Fourth-quarter newspaper revenue was basically flat at $366 million. But in a worrying sign, advertising revenue slipped 5% companywide as advertisers searched for new ways to reach consumers. Print advertising revenue declined 11.2% to $166.6 million but circulation revenue increased nearly 16% to $145.6 million for the quarter.
Online advertising was up nearly 19% to $56.5 million in the fourth quarter.
Tronc said its websites attracted 79.3 million monthly unique visitors, which represented a 40% increase over the year-earlier period. The Times generates about 40% of the company’s online traffic, according to data from the online measurement company ComScore.
Tronc said its digital-only subscribers doubled over the year to 320,000.
4:25 p.m.: This article has been updated with the company’s fourth-quarter earnings.
3:15 p.m.: This article was updated with information about the Federal Trade Commission approval.
This article was originally published at 1:55 p.m.
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