Michael Ferro Steps Down as Chairman of Tronc

Michael W. Ferro Jr., a Chicago entrepreneur and the biggest shareholder in the newspaper publisher Tronc, has stepped down as the company’s chairman, Tronc announced on Monday. The move came just weeks after Mr. Ferro helped negotiate the sale of Tronc’s crown jewel, The Los Angeles Times.

Justin Dearborn, the company’s chief executive, will replace Mr. Ferro as chairman.

“I am confident that under the leadership of Justin and the rest of the board and management team Tronc will continue to deliver value for investors while executing the plan for digital transformation,” Mr. Ferro said in a statement.

Mr. Ferro will remain an investor in Tronc. But his decision to step down as chairman follows a period of intense public scrutiny.

Dissatisfaction at The Los Angeles Times spilled into public view early this year, with some employees at the paper fearing that Tronc and Mr. Ferro were making hires in order to try to form a separate unit that would sidestep a newsroom that had recently unionized.

Ross Levinsohn, who had been consulting for Tronc before becoming the publisher of The Times, was also placed on leave after National Public Radio reported that he had been accused of sexual harassment at two previous jobs. After an investigation that Tronc said found no wrongdoing, Mr. Levinsohn was reinstated as chief executive of a newly formed division called Tribune Interactive.

In early February, Mr. Ferro orchestrated the sale of The Los Angeles Times to Patrick Soon-Shiong, a billionaire doctor in Los Angeles, for $500 million. The deal, which is expected to close soon, also included The Times’s sibling paper, The San Diego Union-Tribune, and smaller publications in the California News Group.

“Michael retires having created considerable shareholder value for the company in just two years as chairman of the board,” Mr. Dearborn said in a statement.

A spokesman for Mr. Ferro, Dennis Culloton, said that Mr. Ferro was “burned out” by his high profile and wanted to “go out on a win.”

An audacious businessman and former owner of The Chicago Sun-Times, Mr. Ferro became Tronc’s nonexecutive chairman in early 2016 after his fund, Merrick Ventures, invested $44 million in the company.

Almost immediately, he began to transform Tronc, the publisher of The Los Angeles Times, The Chicago Tribune, The Baltimore Sun and other newspapers, sometimes to the bewilderment of its journalists and the rest of the media industry.

During a lengthy takeover battle with Gannett, the publisher of USA Today, Mr. Ferro changed the company’s name from Tribune Publishing to Tronc, for Tribune online content, a move that was met with ridicule on the internet. He also introduced a technology-driven approach to journalism that included the use of artificial intelligence and machine learning. And he harbored global ambitions, with plans to open bureaus for The Los Angeles Times in cities around the world, including Lagos and Rio de Janeiro.

In September, Tronc acquired The Daily News, the nearly 100-year-old tabloid that was long a voice for New York’s working class.

Nowhere did Tronc’s decisions draw more criticism than at The Los Angeles Times. Last year, the company aggressively tried to thwart a unionization effort by the paper’s workers, aggravating tension between employees and management. The company also installed new leaders, including Mr. Levinsohn, a former Yahoo executive, and Lewis D’Vorkin, previously the chief product officer at Forbes, who became the paper’s editor. Neither endeared themselves to a newsroom that became set on their ousters.

Newsroom employees at The Times also made public online reports about Tronc, including the compensation and perks received by executives, as well as Mr. Ferro’s use of a private jet that Tronc had paid to sublease from Mr. Ferro’s company, Merrick Ventures. A regulatory disclosure in December that Tronc had agreed to pay Merrick Ventures $5 million annually on a rolling, three-year basis for consulting services also vexed employees.