Publisher Tronc completes sale of LA Times to billionaire Patrick Soon-Shiong, and may ditch its own awful name
The deal ushers in a new era for the iconic California newspaper and its former Chicago-based owners
Publisher Tronc completed its US$500 million sale of The Los Angeles Times and San Diego Union-Tribune to biotech billionaire Patrick Soon-Shiong on Monday, ushering in a new era for both the Chicago-based newspaper chain and its former California holdings.
Tronc also is looking to shed its much derided corporate moniker, and bring the Tribune name back in some form, according to sources.
In a story published Saturday, Soon-Shiong, Tronc’s second-largest shareholder, told the Los Angeles Times that he hoped to convince the board to replace the Tronc moniker.
“I think we need to go back to Tribune,” he told the paper, which he has agreed to buy from Tronc in a US$500 million deal. “I always thought Tronc was a silly name.”
On Monday, Soon-Shiong performed his first major move, installing Norman Pearlstine as executive editor of the The Los Angeles Times . Pearlstine has spent 50 years in journalism helping shape some of the nation’s most prominent publications – including Time Inc magazines, Bloomberg News, Forbes and The Wall Street Journal.
The sale of The Los Angeles Times, which has taken more than four months to close, returns that newspaper to local ownership after 18 years under a Chicago-based corporate parent. It leaves Tronc smaller, but flush with cash.
Tronc executives have said they would use the proceeds from the sale to fully repay outstanding debt and pursue acquisitions. The company had long-term debt of nearly US$327 million as of the first quarter, according to filings with the Securities and Exchange Commission.
“We are very pleased to close this transaction, which greatly strengthens our balance sheet and significantly lowers our pension liabilities,” Justin Dearborn, chairman and CEO of Tronc, said in an emailed statement Monday. “We are now positioned to further reinvest in our business and enhance our capabilities to continue to deliver world-class journalism. We are confident that high quality journalism will continue with the changeover to local leadership of the Los Angeles Times and The San Diego Union-Tribune.”
Soon-Shiong, Tronc’s second-largest shareholder, also will assume US$90 million of pension liabilities tied to the California holdings.
Formerly known as Tribune Publishing, Tronc owns the Chicago Tribune, New York Daily News, Baltimore Sun and other major daily newspapers.
In a report to investors Monday, Cowen analyst Lance Vitanza said the The Los Angeles Times sale makes Tronc “compelling” as an acquisition target for other media companies.
Tronc struck a deal to sell the California newspapers to Soon-Shiong in February, and federal regulators signed off in March. The transaction was slowed by negotiations for a transition services agreement under which Tronc would provide a variety of services to the California newspapers for up to 12 months after closing, executives said.
Tribune Publishing changed its name to Tronc in June 2016, four months after technology entrepreneur Michael Ferro became nonexecutive chairman and the largest shareholder of the newspaper chain.
The name, which stood for Tribune Online Content, was introduced to widespread ridicule.
Perhaps most notably, during a 2016 episode of his HBO show, Last Week Tonight, comedian John Oliver said Tribune Publishing was rebranded “into something much, much stupider,” likening the name Tronc to “the sound of a stack of print newspapers being thrown into a dumpster.” The episode has been viewed more than 9 million times on YouTube.
Sources on Monday said Tronc was seeking to incorporate Tribune back into its name, a change it expected to be imminent.
Ferro stepped down from the board of Tronc in March, ahead of published accusations of inappropriate sexual behaviour toward two women while in his previous role as head of a Chicago investment firm.