Tronc, Inc. announced Wednesday it is selling the Los Angeles Times and the San Diego Union-Tribune.
The deal involves $500 million in cash plus the assumption of $90 million in pension liabilities in a deal expected to close this quarter or early second quarter, according to the company's statement.
The new owner will be Nant Capital, LLC, a private investment company owned by Dr. Patrick Soon-Shiong.
"We look forward to continuing the great tradition of award-winning journalism carried out by the reporters and editors of the Los Angeles Times, The San Diego Union-Tribune and the other California News Group titles,” Soon-Shiong said in a written statement from Tronc.
The sale happens amid turmoil at both papers, which have suffered through years of cutbacks and a revolving door of leadership in top positions.
Tribune Publishing Co. purchased the only daily print newspaper in San Diego from real estate developer Douglas Manchester for $85 million in May 2015.
The company immediately announced the elimination of 178 positions, many from the UT’s printing and delivery divisions.
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Employees at the company’s Los Angeles printing facility handle those duties for San Diego County customers.
The LA Times' top editor was replaced last week for the third time in six months and Publisher Ross Levinsohn is on unpaid leave after revelations he was a defendant in two sexual harassment lawsuits at other companies. Journalists at the LA Times voted last month to unionize for the first time in the paper's 136-year history.
Soon-Shiong, who is currently working on a cure for cancer, is said by Forbes to be the nation's richest doctor.
He made the bulk of his fortune selling two of the drug companies that he founded for a total of nearly $9 billion a decade ago. Forbes put his current wealth at $7.8 billion.
He owns more than a quarter of shares in Chicago-based Tronc, the company formerly known as Tribune Publishing. It owns 10 U.S. newspapers, including the Chicago Tribune, Baltimore Sun and New York Daily News.
The move follows one of two trends in media ownership: big companies getting bigger and wealthy investors taking on newspapers as philanthropic endeavors, said Al Tompkins, a senior faculty member at the Poynter Institute.
In 2013, Amazon founder and CEO Jeff Bezos bought The Washington Post for $250 million and Boston Red Sox owner John Henry bought the Boston Globe for $70 million.
"We find ourselves returning to where we were a century ago when a handful of wealthy owners controlled big influential newspapers," Tompkins said. "Here's the difference: The ownership today does not promise lucrative returns. You take it over knowing it isn't nearly as profitable as it might have been 20 or 50 years ago. Today it's a thinner margin and it gets thinner every day."
Manchester initially purchased the newspaper and its real estate holdings in 2011.
In an interview with voiceofsandiego, Manchester said he paid above $110 million for the newspaper which he reportedly said was less than the asking price.
