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Biotech Mogul Behind L.A. Times Says Papers Need Government Aid

Bloomberg logoBloomberg 5/7/2021 Yueqi Yang and Gerry Smith

(Bloomberg) -- The owner of the Los Angeles Times is calling on the government to throw its support behind newspapers, saying the loss of advertising to tech companies and declining readership threaten local journalism.

“The government needs to step in a little bit,” Patrick Soon-Shiong, the billionaire biotech entrepreneur who bought the Times in 2018, said in an interview.

While a few newspapers -- like the New York Times and Wall Street Journal -- are thriving thanks to growing online audiences, many are shrinking due to the loss of ad sales and readers. The Los Angeles Times has about 240,000 digital subscribers. That’s far behind the New York Times, where the digital subscriber base has grown to 6.9 million.

Patrick Soon-Shiong wearing a suit and tie: Inside The JPMorgan Healthcare Conference © Bloomberg Inside The JPMorgan Healthcare Conference

Patrick Soon-Shiong

Photographer: David Paul Morris/Bloomberg

Soon-Shiong, 68, didn’t outline specifically what he’d like the government to do, but he said tech companies, which generate ad revenue by hosting news articles and videos from others, should pay newspapers for their content. The Times received a $10 million coronavirus assistance loan from the government to help cover payroll and other costs, the newspaper reported in March.

“I’m not asking the government to do anything drastic, but they have to step in and find a way to support the viability of this whole industry,” he said. “There has to be a resolution to this inequality of usurping information and destroying, frankly, democracy, in the long run.”

In the U.S., legislation has been introduced that would let newspapers band together to negotiate revenue-sharing terms with Facebook and Google without violating antitrust laws. The Australian government passed a law this year that requires the tech giants to pay newspapers for their content.

The two companies have also struck deals with publications in some countries to pay for articles that run on their platforms.

Even if the U.S. government comes to the aid of newspapers, that won’t be sufficient if the industry can’t get enough readers to pay for subscriptions, Soon-Shiong said.

“The platforms have taken away all the advertising dollars,” he said. “Subscription is going to be the only solution.”

Soon-Shiong also has been under pressure to increase the racial diversity of the Times newsroom. Earlier this week, the paper hired Kevin Merida, who is Black, as its next executive editor.

Merida, who most recently oversaw coverage of race, culture and sports as head of ESPN’s site the Undefeated, spent about two decades at the Washington Post. At the Post, he rose to managing editor for news and features and oversaw its universal news desk.

Soon-Shiong acquired the Times, along with the San Diego-Union Tribune and other publications, from Tribune Publishing Co. in a $500 million deal. The Wall Street Journal recently said he has considered selling the Times, though Soon-Shiong described the report as “inaccurate.”

Soon-Shiong is also a key player in the drama over the future of Tribune Publishing. He is the second-largest shareholder of that newspaper chain, which owns the Chicago Tribune, the New York Daily News and other titles. The hedge fund Alden Global Capital appears poised to take over Tribune after a rival bidder lost a crucial financing partner.

Soon-Shiong, who serves as chief executive officer of NantHealth Inc., said he’ll decide later which bid to support.

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