One of the groups seeking to buy the Boston Globe from the New York Times Co. is considering a non-profit ownership arrangement, according to a report by the Globe’s Beth Healy.
The group — headed by Partners HealthCare chairman Jack Connors and Boston Celtics co-owner Stephen Pagliuca — has “proposed a ‘civic approach’ that would involve a nonprofit foundation to help fund and run the news operation,” writes Healy, citing an unnamed source.
The other bidder is a group headed by Stephen Taylor, a prominent member of the family that sold the Globe to the New York Times Co. in 1993.
What Healy does not specify (and perhaps Connors and Pagliuca themselves haven’t decided at this point) is whether we’re talking about a pure non-profit or a hybrid model.
A hybrid involves setting up a non-profit organization as owner and operator of a for-profit newspaper, an arrangement that has succeeded for the St. Petersburg Times (owned by the Poynter Institute) and, locally, by the New Hampshire Union Leader (the majority owner is the Nackey S. Loeb School of Communications).
Under the hybrid model, a newspaper still has to turn a profit, and the St. Pete Times and the Union Leader have not been immune from cuts. But non-profit owners are generally willing to tolerate far smaller profit margins than large, publicly traded corporations, whose executives have to worry about quarterly reports and the expectations of Wall Street.
The pure non-profit model got its biggest boost earlier this year in a New York Times op-ed piece by Yale investment executives David Swensen and Michael Schmidt. Turning newspapers into endowed institutions, they argued, would insulate them from the economic pressures that are destroying the business. (U.S. Sen. Ben Cardin, D-Md., has filed legislation that would help turn that vision into a reality, though it’s not clear why a change in the law would be necessary.)
As I’ve written before, though, there is a huge problem with the pure non-profit model: in order to take advantage of the the tax incentives that would make it work, the newspaper’s executives would have to stop endorsing political candidates and engaging in other forms of purely political speech. That may work for public radio and public television (after all, the government has been regulating the airwaves since the 1920s), but it would be anathema to a newspaper’s mission.
Another aspect of the Connors-Pagliuca bid that’s unclear is what role the two men see for themselves if they’re not going to be owners in the traditional sense. It all sounds very public-spirited, but I can’t imagine they’re going to invest their time and money without reserving a very large say over how the Globe is run.
Two years ago I explored various ownership options for the Globe in an article for CommonWealth Magazine. You can read it here.
The Times Co. has clearly lost interest in owning the Globe. Check out Adam Reilly’s latest, in which he notes that the company can’t even bring itself to acknowledge publicly that it’s trying to sell the paper, even though it’s, you know, trying to sell the paper.
The sooner this can get done, the better.