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Tronc turmoil threatens Union-Tribune sale

New billionaire buyer surfaces as prospective owner

Leon Black — was lieutenant to junk bond king Michael Milken
Leon Black — was lieutenant to junk bond king Michael Milken

Who's on first at troubled tronc, and does it matter anymore to what appears to be an increasingly desperate attempt to save the last vestiges of San Diego's only daily newspaper?

"Speculation is growing that Soon-Shiong is looking for a price cut."

From the New York Post of late Thursday, April 12 comes word that the deal by Los Angeles billionaire Patrick Soon-Shiong to buy the L.A. Times and its collaterally-damaged little sister Union-Tribune may be toast.

Instead, New York billionaire Leon Black, the Post reported, "is eyeing an acquisition of publishing empire Tronc — swooping in as negotiations to sell the company’s Los Angeles Times and San Diego Union-Tribune papers have stalled."

"Speculation is growing that Soon-Shiong is looking for a price cut, although neither side can break the deal without mutual consent until Aug. 7."

Hours earlier, the Los Angeles Times reported that its ex-editor Editor in Chief Lewis D'Vorkin had fallen from his latest position as the chief content officer of Tribune Interactive, a nascent tronc venture with a sketchy business plan.

A raft of other Tribune Interactive workers also got pink slips, the Times reported. "Departing employees in Los Angeles said they were laid off en masse during a staff meeting early Thursday afternoon that was originally supposed to be led by D'Vorkin.

"But he did not appear for the meeting, and instead, employees were told by a human resources manager that they were being let go. The manager cited a reorganization, according to people who were there."

The upheaval is only the latest in a series of crises that have rocked tronc and darkened the future for the Union-Tribune, where both advertising lineage and worker ranks have dwindled as staffers have nervously awaited a hoped-for Soon-Shiong bailout.

"I know that everyone will have many questions about the future. I hope to have some answers when we meet soon," Soon-Shiong wrote in a February 7 memo to his future employees the two papers.

"I want to assure you — everyone from the press room to the newsroom — that I will work to ensure that you have the tools and resources to produce the high-quality journalism that our readers need and rely upon," he wrote.

Those words have been the last heard from Soon-Shiong on the matter, and his silence, along with last month's exit of ex-tronc chairman Michael Ferro hours before inappropriate behavior allegations against him hit the web, has cast a pall over the putative takeover.

How much time remains for the Union-Tribune is a matter of speculation, but a further delay in funneling cash to rebuild the beleaguered operation might prove fatal, insiders say.

Like Soon-Shiong, Leon Black has had a controversial California business career. In the 1980s, Black, a long-time lieutenant to ultimately-jailed junk bond king Michael Milken, escaped prosecution to form Apollo Management.

"Two state agencies have done multibillion-dollar deals with high-flying investment banker Leon Black, and both have resulted in scandals, two decades apart," wrote the Sacramento Bee's Dan Walters in July 2014 as Black was seeking a deal with the California Public Employees Retirement System, CalPERS for short.

"Two big deals and two big scandals. Leon Black claimed ignorance of shady dealing in both, but maybe it’s time for officials to stop doing business with him."

Just how close Black, or another potential tronc suitor, newspaper giant Gannett, gets to deciding the U-T's fate is as yet unknown. "The door is open for sales of all or part of the company," an unnamed media observer told the Post.

“I doubt Gannett wants the whole thing, particularly if they have to take the New York Daily News. They don’t want to have the stigma of closing it. Some of the papers probably can’t be sold. The Daily News is at the top of that list."

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Leon Black — was lieutenant to junk bond king Michael Milken
Leon Black — was lieutenant to junk bond king Michael Milken

Who's on first at troubled tronc, and does it matter anymore to what appears to be an increasingly desperate attempt to save the last vestiges of San Diego's only daily newspaper?

"Speculation is growing that Soon-Shiong is looking for a price cut."

From the New York Post of late Thursday, April 12 comes word that the deal by Los Angeles billionaire Patrick Soon-Shiong to buy the L.A. Times and its collaterally-damaged little sister Union-Tribune may be toast.

Instead, New York billionaire Leon Black, the Post reported, "is eyeing an acquisition of publishing empire Tronc — swooping in as negotiations to sell the company’s Los Angeles Times and San Diego Union-Tribune papers have stalled."

"Speculation is growing that Soon-Shiong is looking for a price cut, although neither side can break the deal without mutual consent until Aug. 7."

Hours earlier, the Los Angeles Times reported that its ex-editor Editor in Chief Lewis D'Vorkin had fallen from his latest position as the chief content officer of Tribune Interactive, a nascent tronc venture with a sketchy business plan.

A raft of other Tribune Interactive workers also got pink slips, the Times reported. "Departing employees in Los Angeles said they were laid off en masse during a staff meeting early Thursday afternoon that was originally supposed to be led by D'Vorkin.

"But he did not appear for the meeting, and instead, employees were told by a human resources manager that they were being let go. The manager cited a reorganization, according to people who were there."

The upheaval is only the latest in a series of crises that have rocked tronc and darkened the future for the Union-Tribune, where both advertising lineage and worker ranks have dwindled as staffers have nervously awaited a hoped-for Soon-Shiong bailout.

"I know that everyone will have many questions about the future. I hope to have some answers when we meet soon," Soon-Shiong wrote in a February 7 memo to his future employees the two papers.

"I want to assure you — everyone from the press room to the newsroom — that I will work to ensure that you have the tools and resources to produce the high-quality journalism that our readers need and rely upon," he wrote.

Those words have been the last heard from Soon-Shiong on the matter, and his silence, along with last month's exit of ex-tronc chairman Michael Ferro hours before inappropriate behavior allegations against him hit the web, has cast a pall over the putative takeover.

How much time remains for the Union-Tribune is a matter of speculation, but a further delay in funneling cash to rebuild the beleaguered operation might prove fatal, insiders say.

Like Soon-Shiong, Leon Black has had a controversial California business career. In the 1980s, Black, a long-time lieutenant to ultimately-jailed junk bond king Michael Milken, escaped prosecution to form Apollo Management.

"Two state agencies have done multibillion-dollar deals with high-flying investment banker Leon Black, and both have resulted in scandals, two decades apart," wrote the Sacramento Bee's Dan Walters in July 2014 as Black was seeking a deal with the California Public Employees Retirement System, CalPERS for short.

"Two big deals and two big scandals. Leon Black claimed ignorance of shady dealing in both, but maybe it’s time for officials to stop doing business with him."

Just how close Black, or another potential tronc suitor, newspaper giant Gannett, gets to deciding the U-T's fate is as yet unknown. "The door is open for sales of all or part of the company," an unnamed media observer told the Post.

“I doubt Gannett wants the whole thing, particularly if they have to take the New York Daily News. They don’t want to have the stigma of closing it. Some of the papers probably can’t be sold. The Daily News is at the top of that list."

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It's not surprising that Soon-Shiong is looking for a lowered price. How can those newspapers be worth a half billion dollars?

April 14, 2018

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