A Promising Investment with Disappointing Results
Six years ago, Dr. Patrick Soon-Shiong, a biotech billionaire, made a bold move by purchasing the Los Angeles Times for a staggering $500 million. His vision was to usher in the next generation of publishing, but unfortunately, the reality has fallen short of expectations.
Despite Soon-Shiong’s immense wealth, estimated at $5.4 billion, he is starting to feel the strain of the significant financial losses he has incurred. In fact, just months after letting go of 70 staff members, the Los Angeles Times recently announced another round of layoffs, affecting 115 employees – nearly 20% of its workforce.
A Damaging Blow to an Ailing Organization
This latest wave of lay-offs has reverberated throughout the news organization, which Soon-Shiong had promised to revive. Unionized staffers even resorted to staging a walkout, and the paper’s top editor, along with two top deputies, chose to resign in response.
Sources close to Soon-Shiong reveal that while he is willing to inject substantial funds into the LA Times for several more years, there is a limit to how much of a deficit he can bear. Unfortunately, the paper has already surpassed this threshold.
A History of Financial Struggles
Under Soon-Shiong’s watch, the Times, including the San Diego Union-Tribune, experienced staggering annual losses of up to $50 million. Last summer, in an effort to alleviate some of these financial burdens, the Union-Tribune was sold – including its substantial pension liabilities, to a newspaper group owned by hedge fund Alden Global Capital. Despite this sale, the LA Times still reported being $30 million in the red by year-end.
A Vision for Long-Term Success
Initially, Soon-Shiong held high hopes for his publishing venture. The 71-year-old doctor was determined to transform the struggling paper into a journalistic powerhouse once again, pledging to invest whatever it takes to ensure the Los Angeles Times remains a viable business for at least another century. However, the challenges he now faces have cast doubt on the feasibility of this ambitious goal.
Messages sent to Soon-Shiong for comment on the current situation were not immediately returned, leaving the future of the LA Times in a state of uncertainty.
Soon-Shiong’s Ambitious Goal
Introduction
A Challenging Ascent
The Vision for a Superregional News Source
Soon-Shiong envisaged the Los Angeles Times as a superregional news outlet, primarily catering to California’s 40 million residents. Rather than directly competing with national giants like the New York Times and the Washington Post, the emphasis was on becoming the definitive source for news in the state.
The Limitations of a Regional Focus
Industry experts argued that this concentrated approach hindered the Los Angeles Times from reaching a broader audience. While it presented extensive coverage for those within the state, it limited the paper’s ability to attract a national readership.
A Debt to Los Angeles
Soon-Shiong’s deep connection to Los Angeles played a significant role in his commitment to sustaining the city’s most influential news source. Recognizing the importance of this institution, he felt an obligation to nurture it.
The Journey from South Africa to Medical Breakthroughs
Originally from South Africa, Soon-Shiong first arrived in the United States in 1980 as a resident at the University of Southern California Medical School. He later became a faculty member, teaching at the same institution.
Ventures Beyond Medicine
In 1991, Soon-Shiong ventured into the world of entrepreneurship by founding VivoRx, a company dedicated to developing diabetes drugs. Eventually, he achieved a breakthrough with Abraxane, a drug approved by the FDA for treating metastatic breast cancer, lung cancer, and pancreatic cancer.
From Medical Success to Financial Triumph
The sale of Soon-Shiong’s company, Abraxis BioScience Inc., to Celgene Corp. in 2010 led to a staggering financial windfall, earning him billions of dollars.
A Continual Passion for Science
Despite entering the publishing industry, Soon-Shiong’s passion for science and scientific research never wavered. Throughout the pandemic, he devoted his time to developing a COVID-19 vaccine, stepping back from the day-to-day operations of the Times.
The Consideration of Selling the Paper
In 2021, there were reports of Soon-Shiong exploring the possibility of selling the Los Angeles Times. However, these plans were swiftly abandoned when suitable buyers failed to materialize. Both Soon-Shiong and his family denied any intention of selling the newspaper.
