Next month marks four years since Dr Patrick Soon-Shiong agreed a $500m deal to buy his local newspaper, the Los Angeles Times. “It seems like 30 years,” says Soon-Shiong over a Zoom call from his home in LA.
He’s joking. But the pharmaceuticals billionaire, who made his fortune by developing cancer drugs, has overseen a dramatic period of change for one of America’s most storied news publishers.
The Soon-Shiong era started with the appointment of a new executive editor (Norman Pearlstine). An HQ move, from downtown LA to El Segundo, soon followed. Then came the launch of a TV production arm. The recruitment of 140 new journalists. A Covid-19 collapse in advertising revenues. A “summer of turmoil and scandals” and a “racial reckoning”. The resignation of an executive editor (Pearlstine). And – following a six-month recruitment process likened to the Hunger Games – the appointment of a second new executive editor (Kevin Merida).
In the years since Soon-Shiong and his wife, Michele, bought the California Times group (which includes the LA Times, the San Diego Union-Tribune and a handful of community titles) they have invested hundreds of millions of dollars into modernising the publisher.
“We may be close to $1bn by now,” says Soon-Shiong when I ask him how much he’s spent overall, adding together the $500m and subsequent investments in publishing software, journalists and infrastructure. “But I don’t have a fixed number because I’m, to be honest with you, not really clear.”
So how much is the business worth now? More than the $500m Soon-Shiong originally paid for it?
“Well,” he says, breaking into a laugh. “Most people would say it wasn’t worth $500m to start with, right?”
With an estimated net worth of $7.3bn, running out of money isn’t too much of a concern for Soon-Shiong.
Plus, as chief executive of ImmunityBio and NantKwest, he has a few other pressing professional concerns – like attempting to develop a second-generation vaccine for Covid-19. Soon-Shiong believes the pandemic cannot end without one.
The 69-year-old also fears that the world may have reached a climate change “tipping point” and that the human race “may not survive cockroaches”. (See quickfire questions at the end of this interview.)
In this context, it’s perhaps easier to understand why Soon-Shiong appears relaxed about the value of his media assets.
‘To me, it was worth every penny. We needed to protect this institution’
Born in South Africa to Chinese parents in 1952, Soon-Shiong completed a medical degree at the University of Witwatersrand. He moved to California in the early 1980s and initially worked at the University of California, Los Angeles (UCLA).
Soon-Shiong set up his own research firm in 1991. The “foundation of his fortune”, according to an LA Times profile, was Abraxane, a breast cancer drug. He sold the company behind Abraxane in 2010 for $2.9bn. He later sold another firm, APP Pharmaceuticals, for $4.6bn.
A basketball enthusiast, Soon-Shiong has used part of his wealth to invest in his team, the LA Lakers (he bought his minority stake from Earvin “Magic” Johnson).
The biotech entrepreneur made his first foray into the news industry in 2016 when he bought a stake in Tribune Publishing, the Chicago-based newspaper group that then owned the LA Times. He was appointed vice chairman of the company but later stood down from the board of directors amid reports of a feud with its chairman, Michael Ferro.
In February 2018, Soon-Shiong agreed to buy the LA Times, Union-Tribune and a handful of other community titles from Tribune (or Tronc, as it was then known) for $500m.
The price appeared steep – Jeff Bezos paid $250m for the Washington Post in 2013, while the Boston Globe sold for $70m during the same year – and Soon-Shiong openly admits he was unable to perform a thorough due diligence check on the assets.
“But, to me, it was worth every penny,” he says. “We needed to protect this institution. So it was less of a monetary calculation. I was literally given 24-48 hours to make a decision. And the price was certain. Take it or leave it. It was that. With very little diligence in terms of access to data or anything else. In other words: save the institution, or let it die. It was binary.”
This may sound melodramatic, but the LA Times had faced major cutbacks under Tribune ownership. And Soon-Shiong says more were on the way.
“People were about to be moved out to Chicago, literally,” he says. “The Washington bureau was literally closing the following week. Jobs would have been cut very much like you see going on now.”
The LA Times had 400 journalists at the time. Soon-Shiong believes this figure would have shrunk to around 300 under Tribune Publishing’s plans. Today, a spokesperson says the LA Times employs 540 journalists, while the California Times group as a whole has more than 650 editorial employees.
By contrast, job losses at Tribune Publishing’s remaining titles (the Chicago Tribune, New York Daily News, the Baltimore Sun, and more) continued apace. Journalism advocates fear that cuts will accelerate after the group was last year acquired by hedge fund Alden Global Capital.
Soon-Shiong – who owned a 25% stake in Tribune Publishing prior to the Alden takeover – faced widespread criticism from journalists for not using his shares to oppose the deal (he abstained from the shareholder vote). Soon-Shiong described his Tribune shareholding as “passive” and said his focus was on the LA Times and its sister titles.
‘I think it could be a good family legacy’
Last February, the Wall Street Journal reported that Soon-Shiong was “exploring a sale” of the California Times group. The report said the billionaire was growing “dissatisfied with the news organization’s slow expansion of its digital audience and its substantial losses”.
Soon-Shiong immediately tweeted a denial of the story, describing it as “inaccurate”. His daughter, Nika, tweeted that the Journal report was “100% wrong”.
But how long does Soon-Shiong plan to hold on to the California Times? Is it an investment for life, I ask?
“I think it is,” he says. “I’ve got children who are committed to this. My wife and I, we’re just committed as a civic duty. And I think it could be a good family legacy, frankly.
“Families own these papers, and I think we want to imprint our values. Not in terms of the news – we want that to be completely independent – but we have an opportunity to participate.
“For example, we created a thing called Second Opinion, [a weekly op-ed column that “aims to engage cutting-edge debates about the unprecedented global challenges that our society faces”]. Healthcare is very important. Homelessness is important.
“The underserved, the marginalised portions of society – we have a platform to stand up on behalf of them. To me, that’s important.”
Prompted by a “reckoning on race” at the LA Times in the summer of 2020, Soon-Shiong publicly committed to providing “more and better coverage of Black, Latino, Asian and other underrepresented communities in our English- and Spanish-language publications”.
From the time of his family’s acquisition, Soon-Shiong also pledged to increase representation of women and people of colour at the top of his newsroom.
Today, says a spokesperson for the LA Times, “the masthead is majority women and people of color, for the first time in the paper’s history. The Times newsroom is one of the most diverse in the US, with more than 38% people of color and 46% women. Key areas for improvement now are representation of Latinos (15% in newsroom vs. 48% in LA County) and Black people (5% in newsroom vs. 8% in LA County).”
From newspaper to ‘platform’
Soon-Shiong’s ultimate vision for the LA Times, shared by his second executive editor, Kevin Merida, is to transform it from a newspaper into a multimedia “platform”.
“It’ll be a platform where we’re doing the LA Times Studios, we’re doing a food kitchen, we’re doing sports, we’re doing podcasts. I’m so excited by Kevin, who thinks about things like having a DJ conversation, and music, poetry.”
Some of these ideas are well advanced. The LA Times’ El Segundo headquarters – which replaced its historic downtown home in 2018 – has a 1,800 square foot test kitchen, as well as LA Times Studios and podcast production facilities.
On a more prosaic level, Soon-Shiong has invested big in developing a new content management system, GrapheneCMS, that works across print and multiple digital platforms.
“When I inherited this business, I think there were something like 200 pieces of software clumped together to print a paper,” he says. “We set a challenge that we were going to completely rewrite the content management system. Can you imagine? From scratch. With the help of a partner. And we did.”
And what of the actual newspaper?
Like many of its peers, the LA Times lost around a fifth of its circulation after the Covid-19 crisis broke out. But, with a daily print run of more than 160,000 in early 2021, it remains America’s fifth largest newspaper by circulation.
Soon-Shiong reveals that even he “stopped receiving the physical newspaper for a while” in the early days of Covid-19 because he was concerned about the transmission of the virus. “I missed it,” he adds. “So now I go back and receive the physical paper and read the mobile app.”
How much longer will the newspaper be printed?
“As long as it’s economically possible,” says Soon-Shiong. “Of course, there is the cost of print and cost of ink and everything else – the labour and the printing presses.
“And then we’re fighting these platforms that are basically snipping the news for free! What do you do with that?”
Like many other news proprietors across the US and beyond, Soon-Shiong believes Google and Facebook – the duopoly of the digital advertising market – should pay publishers for the use of their content.
He is an advocate of the Journalism Competition and Preservation Act (JCPA), which would allow news companies to collectively bargain cash-for-content deals with the tech duo. Soon-Shiong says this legislation would be important not just for his newsgroup, but for smaller titles across the United States.
“When you think about it, California’s lost tens of millions of dollars in revenue [to Google and Facebook] – but really what happened is we now have news deserts,” he says. “That’s not sustainable for democracy, never mind anything else. And truly the issue has been these platforms…
“I think if you look at the way the two platforms, Google and Facebook, have done it, it’s perverse in the sense that, long term, this is destructive for the country. They’ve taken all the advertising.”
‘I’ve not lost any enthusiasm, not lost any commitment’
According to a spokesperson, the California Times group lost nearly $60m in advertising revenues in 2020, largely thanks to Covid-19. Overall, the company generated around $350m in revenue that year, according to a report by the Wrap.
“Unfortunately, the advertising dollars continue to drop, so that’s a reality of the world,” says Soon-Shiong. “And the only way we’re making this up now is digital growth is increasing. And unfortunately, it has limited our ability to go and hire more people that I would like to have hired. But I’m pleased with what’s going on at least with digital revenue growth.”
The company has been loss-making since Soon-Shiong’s takeover – “it’s hard to make money when you add 140 people and lose 20-30% of your ad revenues,” he notes – but the owner is confident that, following its infrastructure investments, the group is now heading in the right direction.
“It’s fair to say that we’re still in a period of investment, following the Soon-Shiongs’ acquisition,” a spokesperson says later, adding that 2020 ad losses were partly offset by “striking a balance of conserving cash and developing prospects for growth”.
“The financial picture improved in 2021, but we’re still working toward becoming a self-sustaining business.”
Prompted by advertising woes and falling print readership, the LA Times – like other large news publishers in the US – has switched much of its focus towards building its digital subscriptions business.
The Times currently ranks 15th in Press Gazette’s 100k Club, which orders English-language news publishers by digital-only subscriptions.
As of this month, according to a spokesperson, the LA Times has 450,000 paying digital readers. Around 305,000 are direct subscribers, while 145,000 read the title through third-party platforms including Apple News+.
The figures are impressive when compared with region-focused US titles like the Boston Globe (225,000) and the Minneapolis Star-Tribune (102,000). But they pale in comparison to national and international-focused rivals such as the New York Times (7.6m), Washington Post (3m) and the Wall Street Journal (2.8m).
Who does Soon-Shiong see as the competition? Is the LA Times a regional news publisher? A national? An international?
“I think the LA Times will put a West Coast perspective on the United States,” says Soon-Shiong. “But it represents not just the region, I think it will represent the country. It should represent the country and then actually be accessible to the globe, like Asia, Mexico, Canada.
“I was in Europe these last few weeks to see if I could get my hands on the LA Times. And people do still know the LA Times out there in London. So I think it needs to aspire to come back to be an important paper like it was 20, 30, 40 years ago.”
What does Soon-Shiong make of the LA Times’ digital subscription figures?
“It’s growth, right?” he says. “It’s not the growth that I would like. But it’s growing. And so therefore, this is going to take some time, but I think the opportunity is real for us.
“There are 40m people in California alone. So the opportunity for us to harvest one in ten is not unrealistic."
He now wants the LA Times to hit one million digital-only subscribers by the end of 2022. “Look, I think if we can grow to a million in the next year, and then double that every year, that will make us very sustainable until we get to 4-5m. The New York Times has done it.”
Soon-Shiong’s ambitions are large, but he has been forced to scale them back somewhat over the past four years. In 2019, he said he’d like to have reached 2-4m subscribers by this year or next.
He now readily admits he may have underestimated the challenges of reviving a news publishing giant.
Last year, in a New Yorker profile on Soon-Shiong, Norman Pearlstine claimed his former boss had bought the newsgroup “with very little due diligence, because he thought that it had to be easier than curing cancer. I’m not sure whether he still believes that.”
Soon-Shiong laughs when I mention this (although he is broadly disparaging of the New Yorker’s 8,000-word “clickbait piece”).
“That wasn’t a joke,” he says of the Pearlstine quote. “He did say to me at one point, ‘You know, this is more difficult than curing cancer.’ And I said, ‘Yeah, maybe it is.’”
Still, Soon-Shiong remains determined to succeed.
“I’ve not lost any enthusiasm,” he says. “I’ve not lost any commitment, that’s for sure.”
Quickfire questions with Dr Patrick Soon-Shiong
“Oh my God. I’m trying to think. It’s such a long time since I watched a movie... I’ve not been to the theatre for two and a half years... I honestly can’t tell you. I watch Netflix now.”
Favourite Netflix show?
“I’m watching an Asian show right now, because I don’t speak Chinese, it’s called the Land of the Phoenix or whatever. It’s 70 episodes. It’s almost a nefarious way to travelling to a different country to watch how they live.”
Favourite newspaper (apart from your own)?
“That’s a tough one. I read diversified papers. I read the Financial Times and Wall Street Journal, and I actually pick up the New York Times, believe it or not, together with the LA Times obviously, just to get a feel.”
“I think the Atlantic has amazingly good stories and fantastic writers. I’m jealous all the time when I read their work.”
Favourite band or musician?
What keeps you up at night?
“What gives me sleepless nights now is that people don’t understand that, frankly, we’re doing things wrong and we’ve done it wrong from the beginning. All of this that’s happening right now was preventable if we understood that viruses mutate as a nature of their course. And just driving antibody-based vaccines doesn’t prevent transmission. And then holding vaccines and not allowing undeveloped countries with HIV and TB was an inevitable incubator for mutations that are happening as we speak...
“The other thing is truly climate change. I worry, have we reached the tipping point? So, you know, you need to really think about the existential nature of the human species. We’ve not been on this planet very long but we’re not smart enough to know that we may not survive cockroaches.”
Photo credit: Christina House, Los Angeles Times