With another rough year for the newspaper business come and gone, the answer to the question of who will control the fate of the controversial tronc publishing empire — including the L.A. Times and San Diego's Union-Tribune — remains clouded, but with one more clue.
Two days before Christmas, tronc quietly filed a statement with the federal Securities and Exchange Commission, saying it had repealed its so-called poison-pill defense, erected in May by the company's board to stop a hostile takeover attempt by newspaper giant Gannett.
Under that provision, Gannett or other would-be buyers were effectively barred from purchasing more than 20 percent of the company's stock, under threat of a new stock issuance by tronc that would make the takeover price prohibitively expensive.
The poison-pill provision, also known as a shareholder rights agreement, was supposed to remain in place for a year. But now Gannett is long gone from the battlefield, having announced in November that its bankers refused to finance the tronc takeover.
"The Board has determined that the threat posed to the Company at the time of adoption of the Rights Agreement has abated and an amendment to the Rights Agreement is now advisable to and in the best interests of the Company and its stockholders," says tronc's December 23 filing with the SEC.
Since Gannet withdrew its bid, the big winners of the war, tronc chairman Michael Ferro, a Midwest wheeler-dealer, and his ally, Los Angeles biotech billionaire Patrick Soon-Shiong — already major holders of the company's stock — have been snapping up additional shares, bringing each ever closer to the 20 percent poison-pill trigger.
A December 15 report in the Chicago Tribune, another tronc property, noted that Ferro had paid more than $15 million for 1.3 million shares between Nov. 7 and Dec. 7, at prices between $9.48 to $13.49 per share, making him owner of 17.9 percent of the firm's stock.
During the same period, Soon-Shiong laid out $8.1 million for almost 669,000 shares, giving him control of 15.9 percent of tronc's common.
Both men have made their purchases through corporations they run; Ferro is said to be investing not only for himself but a holding company called Merrick Media, in which some of Chicago's biggest financial and industrial moguls reportedly have investments.
What the big money moves ultimately mean for San Diego and its fading newspaper, and whether Ferro and Soon-Shiong ultimately plan to take the company private, is still a matter of conjecture.
When Ferro originally grabbed control of tronc, then known as Tribune Publishing, in early February, he promised a cornucopia of new technology and savvy editing that would save the long-flagging venture, but subsequent moves, including the infamous tronc newspaper-as-a-sievevideo, have diminished the expectations of many.
During the struggle with Gannett, Ferro recruited Soon-Shiong, who had long been rumored as a candidate to buy the L.A. Times, as a corporate white knight, asserting that Soon-Shiong-owned patents regarding artificial intelligence would be used to transform the newspaper business.
"Artificial intelligence is going to allow journalists to do their jobs more efficiently, finding the right photos, the videos, the databases, the things that you package your stories with." said the video, which also touted more video content across the network of tronc newspapers. Soon-Shiong runs an elaborate video studio in Los Angeles he calls NantStudio.
"This pre-lit stage wrapped with a 360° green screen features pre-rigged targets optimized for virtual production and a sound proof door," says NantStudio's website. “Conveniently located in Culver City, our advanced smart stage is optimized for virtual production, merging the digital and physical worlds in real time."
Whether Soon-Shiong would be similarly supportive about perpetuating the Union-Tribune if he and Ferro ultimately manage to take tronc private is uncertain.
One of Soon-Shiong’s biotech start-ups, NantKwest, Inc., has a facility in Torrey Pines near UCSD that was profiled in an enthusiastic U-T story when the magnate first bought in to tronc in May.
When NantKwest stock went public in July 2015, it was priced at $30.60 per share. At last report, it was down to $6.23.