Tronc completes LA Times sale, may change corporate name

Tronc, which owns the Chicago Tribune, completed its $500 million sale of the Los Angeles Times and San Diego Union-Tribune to biotech billionaire Patrick Soon-Shiong on Monday, ushering in a new era for both the Chicago-based newspaper chain and its former California holdings.

Tronc also is looking to shed its much derided corporate moniker, and bring the Tribune name back in some form, according to sources.

The sale of the LA Times, which has taken more than four months to close, returns that newspaper to local ownership after 18 years under a Chicago-based corporate parent. It leaves Tronc smaller, but flush with cash.

Tronc executives have said they would use the proceeds from the sale to fully repay outstanding debt and pursue acquisitions. The company had long-term debt of nearly $327 million as of the first quarter, according to filings with the Securities and Exchange Commission.

“We are very pleased to close this transaction, which greatly strengthens our balance sheet and significantly lowers our pension liabilities,” Justin Dearborn, chairman and CEO of Tronc, said in an emailed statement Monday. “We are now positioned to further reinvest in our business and enhance our capabilities to continue to deliver world-class journalism. We are confident that high quality journalism will continue with the changeover to local leadership of the Los Angeles Times and The San Diego Union-Tribune.”

Soon-Shiong, Tronc’s second-largest shareholder, also will assume $90 million of pension liabilities tied to the California holdings.

Formerly known as Tribune Publishing, Tronc owns the Chicago Tribune, New York Daily News, Baltimore Sun and other major daily newspapers.

In a report to investors Monday, Cowen analyst Lance Vitanza said the Times sale makes Tronc “compelling” as an acquisition target for other media companies.

Tronc struck a deal to sell the California newspapers to Soon-Shiong in February, and federal regulators signed off in March. The transaction was slowed by negotiations for a transition services agreement under which Tronc would provide a variety of services to the California newspapers for up to 12 months after closing, executives said.

Tronc’s former parent company, Tribune Co. (now Tribune Media), acquired Times Mirror Co., owner of the Los Angeles Times and other assets, for $8.3 billion in 2000. Tribune Publishing bought the San Diego Union-Tribune and nine community weeklies for $85 million in 2015.

The company changed its name to Tronc in June 2016, four months after technology entrepreneur Michael Ferro became nonexecutive chairman and the largest shareholder of the newspaper chain. Ferro, who previously owned the Chicago Sun-Times, was in the midst of fending off a hostile takeover bid from Gannett when the name, which stood for Tribune Online Content, was introduced to widespread ridicule.

Perhaps most notably, during a 2016 episode of his HBO show, “Last Week Tonight,” comedian John Oliver said Tribune Publishing was rebranded “into something much, much stupider,” likening the name Tronc to “the sound of a stack of print newspapers being thrown into a dumpster.” The episode has been viewed more than 9 million times on YouTube.

In a 2016 interview, Dearborn said part of the reason for the change to Tronc was the company licensed the Tribune Publishing name from its broadcast parent, Tribune Media. The publishing division spun off from Tribune Media in August 2014.

Sources on Monday said Tronc was seeking to incorporate Tribune back into its name, a change it expected to be imminent.

Ferro stepped down from the board of Tronc in March, ahead of published accusations of inappropriate sexual behavior toward two women while in his previous role as head of a Chicago investment firm.