With the Los Angeles Times executive editor job open since Norman Pearlstine departed in December, owner Dr. Patrick Soon-Shiong says that he is not yet close to picking a successor.
That timetable came in an email I received Friday from Soon-Shiong after I had asked for comment for another Poynter article.
That piece cited financial pressures that could lead Soon-Shiong to put the paper up for sale and reported that two candidates for the executive editor job had withdrawn from consideration.
Soon-Shiong replied that he had not had meetings with either. “We are very early in the process of selecting the best candidate and I am confident we will do so.”
The Wall Street Journal had reported Feb. 19 that Soon-Shiong was exploring the sale of the Times, his hometown metro, after less than three years as owner.
The Journal story said its sources indicate that Soon-Shiong is pivoting to focus attention and financial support on his primary businesses, biotech companies trying to develop treatments for cancer and COVID-19.
Soon-Shiong tweeted a denial at the time. Los Angeles Times spokesperson Hillary Manning reiterated that Friday: “Dr. Soon-Shiong and his family continue to invest in and plan for the future of the California Times, which includes the L.A. Times and San Diego Union-Tribune, and do not plan to sell.”
Not to go overboard with possible scenarios, but there are several:
- Soon-Shiong has been expected to vote in favor of a takeover bid for Tribune Publishing from Alden Global Capital. That would yield him personally about $150 million, even more if he and others push up the price.
- He could apply the proceeds to his biotech businesses or put some or all into rebooting the Times, which has suffered financial and management reverses in his time as owner.
- He might also try to sell The San Diego Union-Tribune, which came as part of the deal when he bought the Los Angeles Times from Tribune Publishing in June 2018. If he found a buyer, that money could be plowed back into recapitalizing the Times as it tackles growing paid digital subscriptions more quickly and settling on editorial leadership.
- Soon-Shiong could bring aboard other wealthy Los Angeles business leaders as minority investors — or even flip to a nonprofit ownership model, inviting philanthropic support.
Meanwhile, Tribune Publishing released a quarterly financial report to investors Thursday evening offering as guidance that it expects to complete its tentative deal to sell to Alden by the end of June. That would require filing proxy materials and scheduling a special meeting of shareholders over the next few weeks.
As I have explained in an earlier post, the deal can go forward only if Soon-Shiong votes yes for his 24% stake. Put another way, the rules have been written by buyer Alden and seller Tribune so that Soon-Shiong has absolute veto power. He could decide to block the transaction indefinitely.
Nothing is final ‘til it’s final in prospective sales transactions. Despite the uncertainties, I do want to offer my take as the plot thickens:
- It seems highly unlikely that Soon-Shiong will hold out his vote and throw the Tribune Publishing sales process into reverse. His own shares would quickly fall in value.
- Alden is a tough bargainer as well as a ruthless cost-cutter after it acquires newspaper properties. The hedge fund appears to have substantial leverage so that Soon-Shiong can get his cash out, as scheduled, by the middle of 2021.
- Should the Los Angeles Times and its sister Union-Tribune be put up for sale, Alden, which already owns The Orange County Register, would be a logical bidder — capturing control of all three of big Southern California counties.
Even if the money is right, though, would Soon-Shiong’s sell to an outfit likely to undo the investments in excellence he has made in the Los Angeles paper? (The Graham family, you will recall, was careful to find a suitable buyer — Jeff Bezos — for The Washington Post rather than auction off to the highest bidder).
I realize such speculation has a tune-in-tomorrow flavor. I will stay tuned. The stakes are huge for those who work at the Times and the Union-Tribune as well as the communities they serve. And the results will be no little thing nationally for the future of local newspapers as a source for local news.