San Diego Union-Tribune sold to New York-based hedge fund

After five years of ownership, billionaire Patrick Soon-Shiong has sold the San Diego Union-Tribune to an affiliate of Denver-based newspaper publisher MediaNews Group for an undisclosed sum, according to company emails and media reports.

Soon-Shiong and his family will maintain ownership of the Los Angeles Times, per media reports. MediaNews Group, formerly Digital First Media, is owned by Alden Global Capital, a New York hedge fund and the second-largest newspaper owner behind Gannett.

Chris Argentieri, president and COO of California Times, once the parent company of both the Los Angeles Times and Union-Tribune, confirmed the sale in an internal July 10 email obtained by The Coast News.

“As of this afternoon, we have completed the transaction to sell The San Diego Union-Tribune to an affiliate of MediaNews Group (MNG),” Argentieri wrote to Union-Tribune employees. “For all of us who remain with the California Times, we will continue focusing on building a prosperous future for the Los Angeles Times.”

The email also included a message from Soon-Shiong, who had previously denied rumors he was exploring the possible sale of the newspapers in 2021.

“Five years later, my family and I remain grateful for the opportunity to work with you at both the Los Angeles Times and San Diego Union-Tribune,” Soon-Shiong wrote in the email. “The Union-Tribune is a great news organization with a long, distinguished history that I hope will continue to serve the San Diego community for generations to come. Our intention now is to focus on the ongoing work of transforming the L.A. Times into a self-sustaining institution. Our hometown of Los Angeles and the state of California – really, the West Coast – needs a strong, independent news organization. We believe in the L.A. Times and are committed to its future.”

But news of the sale has sent shockwaves across the San Diego media landscape due to Alden Global Capital’s reputation for slashing newsroom costs via sweeping layoffs. 

Greg Moran, a legal affairs and criminal justice reporter at the Union-Tribune, told The Coast News the sale was a “disappointment,” coming as a “big surprise” to the entire company, including management. 

“I think it wasn’t handled very well and I haven’t got an explanation as to why (Soon-Shiong) sold the paper other than it’s a tough economy,” Moran said. “But take a number. Everybody’s having a hard time. We are a profitable company. Between the two companies the guy owned, we were making money.”

After working more than 33 years at the Union-Tribune, Moran has witnessed several ownership changes, including the 1992 merger between the San Diego Union and San Diego Evening Tribune. 

For Moran, however, the most recent acquisition stands in relief to previous takeovers of San Diego’s daily newspaper.      

“I think the immediate future, I think (the Union-Tribune’s) going to be a smaller organization and certainly different, but I can’t say in which way,” Moran said. “I really, really hope I’m proven wrong, but based on past performances there’s going to be less local news under MediaNews ownership and I think that has all kinds of implications.”

After forming in 2007, Alden Global established a large portfolio of media holdings, developing a track record as “vulture capitalists” — scooping up newspapers, gutting newsrooms and selling off the assets.

In 2018, the private equity firm purchased the Denver Post and quickly reduced Colorado’s largest daily newspaper’s staff by 70%.

In 2021, Alden Global purchased Tribune Publishing and its flagship daily, the Chicago Tribune, along with a handful of metro and suburban newspapers, including New York Daily News, The Baltimore Sun, Hartford Courant, The Virginian-Pilot and Orlando Sentinel.

According to The NewsGuild, a newspaper journalist labor union, the Chicago Tribune has lost about 30% of its editorial staff since Alden Global first acquired a stake in the company in 2019.

Sharon Ryan, executive vice president of MediaNews Group, confirmed fears of potentially draconian cuts to the Union-Tribune’s workforce in a follow-up message to employees shortly after news broke of the sale.

“No different than the changes announced at the Los Angeles Times last month, the U-T will also need to make some difficult staffing decisions as we assume management,” Ryan wrote. “Reductions will be necessary to offset the slowdown in revenues as economic headwinds continue to impact the media industry. We will seek efficiencies in business operations, distribution and production while striving to support and prioritize the robust, local newsgathering needed to serve the communities that rely on the Union-Tribune for excellence in journalism.”

According to Ryan, MediaNews Group is offering buyouts to employees to make staffing reductions “voluntary.” In a statement detailing the company’s “voluntary separation plan,” full-time employees will receive two weeks’ salary for the first year and an additional week’s pay every year after that, with a maximum of 40 weeks.

According to the email, employees have until noon on July 17 to complete the voluntary separation plan.

Despite Soon-Shiong’s outward commitment to preserving the Los Angeles Times, the sixth-largest daily newspaper in the U.S. has not been immune from recent downsizing and corporate “restructuring” in attempts to make the newspaper more profitable.

Last month, the Los Angeles Times announced it was laying off 74 employees, or 13% of newsroom staff, as part of a “reorganization” due to the current economic climate. This week, The Sporting Times reported the “Los Angeles Times sports section will no longer have box scores, standings, game stories, TV listings or a daily sports calendar” to “accommodate new 3 p.m. deadlines following the sale of their printing press.”

MediaNews Group’s purchase of the Union-Tribune comes two months after Texas-based Nexstar Media Group, owner of Fox5 in San Diego, acquired independent San Diego news station KUSI-TV for $35 million from McKinnon Broadcasting. 

The Coast News will follow this developing story.