BY HAROLD VASQUEZ
“It is legitimate to question the long-term commitment,” says one media commentator regarding Patrick Soon-shiong’s ownership. “There’s no way of knowing when their patience will run out”
“The fundamental problem here is that billionaires are fickle,” Dan Frumkin, editor of Press Watch, told TheWrap. “They save you one day and they lose interest the next.”
How bad is the LA Times’ financial situation? In an interview with Axios this week, executive editor Kevin Merida acknowledged that what appears to be clear is that the newspaper is losing money. (He said this in reference to a story about the launch of De Los, a new LA Times digital product for young Latino audiences.)
Two years ago, TheWrap exclusively reported that the paper’s revenue would drop to $350 million in 2020, up from $400 million the previous year, which California Times president Chris Argentieri shared with the newsroom at the time Was. Since that time,. The pandemic has destroyed the advertising business, and circulation has been a struggle at most metropolitan newspapers.
But trends suggest the expected rescue operation at Soon-Shiong, who bought the LA Times from Tribune in 2018, isn’t going so well, and his management team has yet to figure out how to offset losses through digital subscriptions. How-to and advertising.
Despite receiving “multiple inquiries,” a spokesperson said, the Los Angeles Times is not for sale. The spokesman declined to provide detailed financial information. A person close to the management said that Soon-Shiong has continued to invest in the paper despite the cut and this shows his long-term commitment.
This week, the LA Times announced it is close to 550,000 digital subscriptions, which includes subscriptions through Apple News+ (those subscribers pay for a bundle, which generates far less revenue than direct subscriptions). ). This is far short of Soon-Shiong’s target of 1 million subscriptions by 2022, which he set when he bought the paper.
This figure reflects an actual increase of more than 250,000 subscribers in 2020, but it still falls far short of the New York Times’ 9.7 million digital subscribers and The Washington Post’s 2.5 million. The media sector as a whole is going through another wave of financial distress, with a record number of job cuts set to be cut across the industry in 2023. The LA Times is no exception, as the newspaper cut its newsroom by 13% last month. Retrenchment of 74 journalists.
an asset sale
Union-Tribune came about in a package deal when Soon-Shiong bought the LA Times from Tribune Publishing in 2018, but it was “always an afterthought,” said Jay Rosen, a journalism professor at New York University. “Now that would be a different kind of idea.”
The buyer of Union-Tribune is part of what many media analysts found disappointing about the deal. Soon-Shiong, a biotech entrepreneur, sold Union-Tribune on Monday to MediaNews Group, which has bought hundreds of newspapers and is owned by hedge fund Alden Global Capital, for an undisclosed amount.
“Selling a hedge fund is a worst-case scenario” for a news outlet, Frumkin said. “It’s basically death by a thousand cuts.”
Alden now also owns Tribune Publishing, the former owner of the LA Times, having bought the publisher of the Chicago Tribune in 2021. Hedge funds have gained a reputation in the media industry for acquiring and liquidating newsrooms.
With the already struggling Union-Tribune, MediaNews Group tightens its grip on local news in the Southern California region. Its Southern California news group includes the Orange County Register, Los Angeles Daily News, Long Beach Press-Telegram, Riverside Press-Enterprise, San Gabriel Valley Tribune and Pasadena Star-News.
Rosen characterized these buyers of newspapers as “financial firms that specialize in extracting profits from dwindling assets”.
Within minutes of the sale announcement, Sharon Ryan, MediaNews Group’s top California executive, told Union-Tribune employees that layoffs were imminent as the organization adjusts to new leadership.
Rosen said that the announcement of the layoffs was “a complete travesty.” [the new owners’] Nature.” Alden did not respond to a request for comment. A Los Angeles Times spokeswoman said the sale of the San Diego Union-Tribune made both publications a success.
how to be self reliant
Analysts agree that the local news industry faces a crisis of profitability and ownership. The question now is whether the Los Angeles Times can withstand attempts to drag him down.
In a statement announcing the sale of the Union-Tribune, Soon-Shiong appeared to reaffirm his commitment to the future of the Times.
“It is our intention now to focus on the ongoing work of transforming the LA Times into a self-sustaining institution,” Soon-Shiong said in the email. “Our hometown of Los Angeles and the state of California – indeed, the West Coast – need a strong, independent news organization.”
But experts questioned whether becoming a “self-sustaining institution” was a realistic goal in a declining news market. The LA Times, in particular, is torn between fostering the broad ambitions that come from being based in the global cultural capital and funding the accountability reporting involved in covering a large and diverse American city.
On Monday, the same day that the fate of the Union-Tribune was decided, the LA Times launched De Los.
Although the launch has been hailed as a success, high expectations are hanging over the organization, such as the 1 million digital target set by Soon-Shiong by the end of last year.
The LA Times can now move forward without the burden of the declining Union-Tribune, but it’s still not turning a profit. Executive editor Kevin Merida told Axios he’s optimistic that the newsroom he runs and business operations will come up with ideas for a viable long-term revenue model.
The question now is whether Soon-seong has the resolve to wait until he develops.
“It is legitimate to question the long-term commitment of the family,” Rosen said. “There’s no way of knowing when their patience will run out.”
Frumkin sees no reason to believe that Soon-Shiong “has lost interest” in the newspaper at this point. However, Soon-Seong may have to accept that “a long runway is needed before becoming self-sustainable” — or prepare itself to finance its losses for a long time to come.
SOURCE: THE WRAP