Less than a year ago, folks at Oaktree Capital Management up in Los Angles were mighty unhappy with Chicago’s Mike Ferro, who had grabbed control of Tribune Publishing — owner of the L.A. Times and San Diego Union-Tribune — and was about to change its name to tronc.
The well-heeled investment outfit sent a June 13 letter to Ferro, demanding company records that it said were needed "to investigate potential breaches of Delaware common and statutory law and potential breaches of fiduciary duties" allegedly committed by Ferro after he took charge of tronc earlier in the year.
“We are not going to address the numerous mischaracterizations in Oaktree’s latest letter and will not be distracted by their ongoing campaign to distort the facts,” then-Tribune Publishing head Justin Dearborn fired back in a statement.
Weeks earlier, Oaktree had demanded that Ferro set up an independent committee to study a $15-a-share buyout offer from newspaper giant Gannett, spurned by Ferro and his forces, including company vice chairman Patrick Soon-Shiong, believed to be the richest man in Los Angeles, who that May acquired a 12.92 percent stake in Tribune.
Gannett subsequently raised its offer to $19 a share but ultimately backed out of a putative all-cash deal for tronc in early November, its lenders reportedly balking at the sky-high valuation of the floundering newspaper chain.
As the stock plunged back to earth, there was talk that Oaktree might file suit against Ferro and tronc. But now a March 2 filing with the federal Securities & Exchange Commission has revealed that Oaktree will sell its sizable interest in tronc to billionaire Soon-Shiong, a physician who made his fortune in biotech and has been courting president Donald Trump for a job as the nation’s health-care czar.
"On February 28, 2017, Oaktree Tribune, L.P. entered into an agreement to sell 950,000 Common Shares to Patrick Soon-Shiong and/or an affiliate thereof at a price of $14.60 per share for an aggregate purchase price of $13,870,000.”
With his latest stock pickup, Soon-Shiong is likely to become a greater presence at tronc, which announced last month that it expects to "attrit" employees in favor of editorial robots and other exotic forms of automation being developed by Soon-Shiong at a tightly guarded facility in L.A.
U-T publisher and editor Jeff Light announced last week that seven editorial staffers would be departing, hinting at more to come.
When they promote the company these days, tronc execs save their praise for the L.A. Times, worrying those here who fear the U-T will ultimately be folded into its big sister to the north.
"In Hollywood awards season began in October, and the LA Times has been covering everything from Hindi films to Red Carpet fashion to how the industry itself is evolving," gushed star-struck tronc CEO Dearborn during a February presentation to investors.
Darkening the picture further for the U-T, printed by the Times in downtown Los Angeles and trucked south, is widespread speculation that tronc will ultimately dump its print runs and morph into a collection of online media properties, diverting vital cash needed for new editorial talent in San Diego and elsewhere.
"Sources say recent efforts have Tronc eyeing Sharon Waxman’s Hollywood site, The Wrap, and Jim Cramer’s financial site, The Street, among other targets," wrote the New York Post’s Keith J. Kelly on February 23.
"Late last year, the company added The Cube, a sports-streaming site along with its founder, William Uniowski, as a general manager."
Added Kelly, "The digital push is part of the reason controlling shareholder and Chairman Michael Ferro fought off the proposed takeover by Gannett last year for the struggling newspaper company that includes the Chicago Tribune, Los Angeles Times and Baltimore Sun.”