The Los Angeles Times is the largest and most important news organization in America’s largest and most important state. And it might soon have new ownership.

The Times suffered under a series of lackluster-to-worse owners — including both Sam Zell’s and Michael Ferro’s iterations of Tribune — until it was seemingly rescued by local billionaire Patrick Soon-Shiong in 2018. Soon-Shiong paid $500 million for the Times and its kid brother down I-5, the San Diego Union-Tribune. What followed has been a sometimes-bumpy but mostly happy ride: Soon-Shiong built back the newsroom, hired Kevin Merida to lead it, and generally avoided the carnage most U.S. news companies have faced in the past four years.

That is, until this summer. Last month, the Times announced a round of layoffs that will shrink the newsroom by 13%. Then it announced that it had reached 550,000 digital subscriptions — a healthy increase over recent years, to be sure, but a reminder that, as a business, the L.A. Times looks more like the country’s biggest local newspaper than its smallest national one.

Then, last week, we learned that Soon-Shiong has sold the San Diego paper to…wait for it…Alden Global Capital, the news industry’s closest analog to a serial killer. Bad times all around.

It was into that context that this piece dropped Sunday. It’s by Joe Bel Bruno of The Intersect, a Substack focused on “how Hollywood and Wall Street collide.”

Los Angeles Times owner Patrick Soon-Shiong and entertainment trade publishing magnate Jay Penske are discussing a deal to transfer ownership of the West’s largest newspaper, according to two people directly briefed on the talks.

The people, who are inside both publishers’ inner circles and asked not to be identified for fear of retribution, said the owners have held talks about a deal where The Times is folded into Penske’s PMC Media empire that includes Rolling Stone, The Hollywood Reporter, Billboard, and Variety. It would allow Soon-Shiong, who last week unloaded ownership of The San Diego Union-Tribune to vulture-capital firm Alden [Global] Capital, a way out of a legacy news organization bleeding money.

Any deal, which is not guaranteed as these are described as early talks, would transform Penske into an L.A. publishing mogul not seen since the Chandler family had a stranglehold on Southern California media via The Times. He would be a local owner who controls every major publication in Los Angeles, except for Alden’s smaller news outlets like the L.A. Daily News and Orange County Register.

“This would roll up L.A. media,” said one high-level person linked to Penske, with direct knowledge of the now weeks-old discussion. “This is how we make our mark.”

I was not familiar with Bel Bruno until this story broke, but he’s had a lengthy career at established outlets, including editor positions at The Wall Street Journal, The Hollywood Reporter, Variety, and the L.A. Times itself.

The L.A. Times has denied the report — first, not particularly convincingly to Bel Bruno:

A text to several Times management went ghosted, including Soon-Shiong, who days ago told The Intersect he “loves The Times.” Penske did not return an email, and his spokesman declined to comment on Sunday.

Hillary Manning, The Times spokeswoman, acknowledged that both Soon-Shiong and Penske held a meeting five years ago about a possible deal. She said the two publishers “have not met since,” and declined an interview with Soon-Shiong.

And then more vigorously after publication:

Fake news ( if you call the piece news) that we are in discussions to sell the LA Times. Completely fabricated. We are committed to grow this most important newspaper on the West Coast and the journalistic need to speak truth to power.

— Dr. Pat Soon-Shiong (@DrPatSoonShiong) July 17, 2023

This is not true. The Soon-Shiongs have no interest in selling the L.A. Times. https://t.co/ogNtkCM0Y7

— LA Times Comms Dept (@LATimesFreshInk) July 17, 2023

Look, it doesn’t take Sherlock Holmes to see the convenient gaps left in these denials. That Soon-Shiong and Penske “have not met” does not mean they have not talked by phone, or that their M&A people have not met. Not being “in discussions to sell the LA Times” does not preclude, say, a joint venture between Penske and Soon-Shiong in which Penske runs things but Soon-Shiong retains a minority share — something very much like the arrangement through which Penske currently owns Rolling Stone and Variety. And if Bel Bruno really does have this sourced to people “inside both publishers’ inner circles,” there’s almost certainly at least some early negotiation going on here.

On one hand, selling off San Diego makes sense as a prelude to doubling-down your focus on L.A. On the other hand, clearing the Union-Tribune off your books — it has roughly $90 million in unfunded pension obligations — would make an L.A. Times transaction much cleaner. (I doubt either Soon-Shiong or Penske would have much interest in running the Union-Tribune without the Times.) Either way, Bel Bruno notes discussions are still early; there’s no guarantee where they’ll end up.

And we’ve been here before; two years ago, The Wall Street Journal reported Soon-Shiong was “exploring a sale of the Los Angeles Times,” in part because he had become convinced the Times and Union-Tribune “would be better served if they were part of a larger media group.” No sale happened in 2021, obviously, but this paragraph from Lukas I. Alpert’s story certainly reads today as predictive:

The options being considered include an outright sale of the entire company, bringing in an additional investor or transferring management of the properties to another media group, people familiar with the matter said. Mr. Soon-Shiong has also considered selling or transferring management of the San Diego publication to another company, possibly Alden Global Capital Inc.’s MediaNews Group, which owns several papers in the areas between the two cities.

I frankly wouldn’t blame Soon-Shiong for wanting to get out. He did the city a real service in bringing back local ownership and investing in the newsroom. Whatever the details of a potential exit, he will likely be out hundreds of millions of dollars as a result of his brief moguldom. He can certainly afford it, but it’s nonetheless a real investment in his community. And while Bel Bruno’s piece focuses on the alleged “stranglehold” Penske would have in local media, it’ll probably be a good thing for the L.A. Times to be part of a larger digital media company — especially one with lots of experience in entertainment media, digital ad sales, and events. By most accounts, Jay Penske has been a perfectly reasonable owner, about as good as can be expected in 2023. (It should be more useful, at least, than Soon-Shiong’s transmedia fantasies tied to his other companies’ tech.)

Soon-Shiong, while seemingly healthy and vigorous, is also 70 years old. His daughter Nika had been (controversially!) somewhat involved with the Times, but she recently left L.A. for the U.K. He may just be trying to establish a longer-term plan for the paper.

The reality of the Times’ ownership situation is known to only a few people. But if, as seems likely, there is some sort of transition to Penske, that would make me more optimistic about its future, not less. A billionaire owner is nice — but so is a solid digital media company.