What does a publicly traded L.A. Times even look like?

A puzzle.

There are two main ways, basically, that we finance local journalism in the United States today. The first comes from the world of traditional finance: Businesses should be profitable, so you run the local newspaper or TV station to make profits. How to do this? Your average finance guy looks at your average local newsroom and concludes that the natural margins of independent regional ownership in the internet era now look like incredible dogshit. But there are still margins to be won: by laying off a lot of the non-journalists, merging the newsroom into one supercompany with a highly consolidated business side, and leaving a few reporters sprinkled around. If you manage ruthlessly over the ashes and pay the survivors like dirt, you’d be surprised how stable this approach can be.

The second way of financing local journalism runs through subsidy, and I’m not talking about the now-defunded Corporation for Public Broadcasting model of local grantmaking (RIP). Your average finance gal looks at your average local newsroom and also concludes that the natural margins of independent regional ownership in the internet era look like incredible dogshit. But having a local newsroom still serves a critical social purpose! Do we really need to lay off so many journalists? The 501(c)(3) exemption of the Internal Revenue Code, like for many good social causes, provides a way for the well capitalized to fund the continued provision of a public good in their area while reducing their own tax burdens. Just insert the profits that were earned from elsewhere in the economy — like, say, from a ruthlessly managed commercial newsroom. Everything spent in one place was earned in another.

But what if, I don’t know, there was some bizarre third way to fund a local newsroom? It could look like billionaire Patrick Soon-Shiong’s baffling announcement tonight on Jon Stewart’s “The Daily Show” that he’s planning to take the Los Angeles Times public sometime over the next year.

“We literally are going to take the LA Times public and allow it to be democratized and allow the public to have the ownership of this paper,” Soon-Shiong told Stewart. “We think over the next year we will. I’m working through (that) with an organization that’s putting that together right now.”

Well, there’s not really a way to write an honest opinion here without sounding like a bastard. But the L.A. Times under Soon-Shiong has been an awful business, having lost loads of money and requiring annual injections of cash from the billionaire owner after he bought the organization in 2018. It’s organized as commercial enterprise but is effectively a nonprofit, as its enormous corporate losses has reportedly been a significant write-off for Soon-Shiong’s own personal taxes. But what would the L.A. Times even look like if it started operating as a traditional commercial business? L.A. is a difficult market, the Times itself has been rapidly shrinking, has no economies of scale and doesn’t own its own property (it rents to Soon-Shiong last time I checked). It is not your, um, traditional wonderful IPO candidate. And I say this as somebody who loves the L.A. Times.

But who says publicly traded stocks need to accurately reflect the value of the underlying asset? There is lots of stuff out there in the U.S. economy getting funded for what seem to me like purely attentional or speculative reasons. I do not find Dogecoin to be inherently valuable, it does not generate revenue by itself, and yet people bought some anyway. This sort of investment-value mismatch has been one of the primary ways in which private parties have apparently been transferring large amounts of wealth in the direction of the current U.S. president. What if Elon Musk starts tweeting about the L.A. Times stock and a bunch of MAGAish retail investors buy in? This is a fairly dark view of the case, however, and maybe an unlikely one. But it’s also a scenario where it would make more sense to give the exclusive about your newspaper’s IPO to a comedian newsman instead of a journalist in your own newsroom. It’s also a scenario, like many, where I fret for the journalists who remain.