When Dr. Patrick Soon-Shiong, a billionaire biotechnology entrepreneur, acquired the Los Angeles Times in a $500 million deal in 2018, hopes were high for a new chapter in the newspaper's history. However, six years later, the publication faces significant challenges, including anemic subscription growth, newsroom tensions, and financial pressures that have led to substantial workforce reductions.
Struggles and Unrealized Goals
Despite Soon-Shiong's promise of substantial investments and a lofty goal to reach 5 million digital subscribers (up from 150,000 at the time), the reality has fallen short. The publication lost over $30 million last year, and its digital subscriber base is currently around 300,000, a fraction of the original target. This has led to increased pressure to cut costs, resulting in the recent announcement of a significant reduction of around a fifth of the 500-strong newsroom.
Management's Response and Employee Morale
Soon-Shiong, who did not respond to requests for comment, acknowledged the painful decision in a statement, emphasizing the need for urgent action to build a sustainable and thriving newspaper for the next generation. However, the latest round of layoffs comes on top of cuts made last year, contributing to a tense atmosphere in the newsroom. The L.A. Times's union staged its first-ever strike, and the departure of three top editors in recent days has further eroded employee morale.
Editorial Affairs and Departures
Executive Editor Kevin Merida's departure was attributed to budget constraints and instances of Soon-Shiong weighing in on editorial affairs. Disagreements over editorial policies, such as a recent one involving coverage of Israel's invasion of Gaza, were cited as contributing factors. Despite management's denial of interference in newsroom decisions, the departure of key editorial staff has raised concerns about editorial independence.
Unrealized Digital Subscriber Goals
Despite significant investments and efforts to expand the digital-subscriber base, Soon-Shiong has lowered the desired target to 1 million from the original 5 million. The company states that the initial goal was more of a statement of potential than a concrete objective. Challenges in achieving this target include slow growth and competition from third-party subscription platforms, with over 200,000 people accessing the L.A. Times through platforms like Apple News+.
Investments and Impact of External Factors
Since acquiring the L.A. Times, Soon-Shiong has invested hundreds of millions of dollars in the company and improved office facilities. However, the Covid-19 pandemic has disrupted office dynamics, with a sparsely populated office and continued mask mandates. Layoffs, a common theme in the news industry, have also affected other publications, further heightening tensions among employees.
Union Struggles and Contract Negotiations
The L.A. Times's union has been engaged in negotiations for a new contract for over two years, resisting management proposals, including a recent suggestion for bonuses based on story performance. Last week, the union staged a one-day strike, a historic move, to protest impending layoffs, reflecting growing discontent among employees.
Conclusion
The Los Angeles Times, under the ownership of Dr. Patrick Soon-Shiong, finds itself grappling with challenges that have impeded the realization of optimistic goals set during the acquisition in 2018. As the publication undergoes significant workforce reductions and faces internal and external pressures, the path forward remains uncertain. The evolving situation raises questions about the future of the L.A. Times and underscores the broader challenges facing traditional media in an ever-changing landscape.
