The news was disorienting: WikiLeaks founder Julian Assange, whose alleged misdeeds range from sexual assault to acting as a Russian intelligence asset, would be honored with an award named after the late Danny Schechter, one of my journalistic role models.
A bill filed by U.S. Rep. Mark DeSaulnier, D-Calif., would make it easier for “written news organizations” to claim nonprofit status, “allowing them to focus on content instead of profit margins and reduce their tax burden.”
The bill, H.R. 3126, has been endorsed by the News Media Alliance, the National Newspaper Association, the American Society of News Editors, the Associated Press Media Editors, the Association of Alternative Newsmedia, the California News Publishers Association, Free Press Action and the Open Markets Institute.
Nonprofit news is nothing new — organizations ranging from public media to hyperlocal community websites have nonprofit status. Donors are able to write off contributions, and the news organizations themselves are exempt from most taxes.
But it’s not easy. Back in 2013, I wrote that the IRS had virtually stopped granting 501(c)(3) nonprofit status to startup news organizations as it wrestled with the question of whether journalism was among the educational activities envisioned under the tax code.
Though it’s my understanding that the agency has loosened up since then, questions remain. For instance, The Salt Lake Tribune recently announced that it would seek nonprofit status, which would make it the first regional newspaper to do so. Writing at the Nieman Lab, though, Christine Schmidt and Joshua Benton wondered whether the Tribune would run into trouble for its coverage of professional sports and the restaurant scene, which would appear to fall outside the IRS guidelines.
On the other hand, Paul Bass, the founder of the New Haven Independent, a 13-year-old nonprofit news project, told me recently that the only guidance he ever received was that the Independent could not endorse political candidates or lobby the government.
Presumably DeSaulnier’s bill will help clear up those issues. And a personal note: I played a very small role in crafting the legislation. DeSaulnier and I discussed his ideas last fall, and I suggested to his office — unsuccessfully — that the bill not be restricted to “written” forms of journalism.
The legislation is one of two stories in the news right now about the future of local journalism. The other is a proposal by the newspaper industry to suspend antitrust laws so that they may negotiate collectively with social media platforms in an attempt to obtain payment for the use of their content.
The News Media Alliance, the newspaper business’ principal lobbying group, released a study this week claiming that Google and Facebook made $4.7 billion in 2018 through its uncompensated use of material that originally was published on newspaper websites.
You can read the full text of Rep. DeSaulnier’s bill to encourage nonprofit journalism by clicking here. The text of his office’s press release is below.
June 6, 2019 | Press Release
Washington, DC – Today, Congressman Mark DeSaulnier (CA-11) announced the introduction of the Saving Local News Act (H.R. 3126), a bill to recognize newspapers as a public good and make it easier for written news organizations to become non-profits – allowing them to focus on content instead of profit margins and reduce their tax burden. The bill is supported by the News Media Alliance, the National Newspaper Association, the American Society of News Editors, the Associated Press Media Editors, the Association of Alternative Newsmedia, the California News Publishers Association, Free Press Action, and the Open Markets Institute.
“Local journalism has been a bedrock of American society for over 200 years. I remember when dedicated reporters sat in the front row of city council meetings to keep communities informed and to increase accountability. Today many local newspapers are dying out – penny pinching until they close or are bought up and sold off piecemeal by hedge funds. This bill would allow papers to renew their focus on quality content and flourish unencumbered by ever-increasing demands for greater profits,” said Congressman DeSaulnier.
“We commend Congressman DeSaulnier for introducing this important piece of legislation that recognizes the importance of nonprofit journalism to the American society. At a time when news deserts are a growing concern, we must ensure that we support all newsrooms in their efforts to provide high-quality journalism to their local communities. This journalism bill that would allow non-profit newsrooms to treat advertising revenue as nontaxable income could be helpful to a number of publishers,” said David Chavern, President and CEO, News Media Alliance.
“News organizations today must explore a wide array of avenues for sustainability, one of them being non-profit status. But the federal law lays many trip wires along this path, including the way advertising is taxed. The non-profit route could be attractive for some newspapers if and only if Congress recognizes that even a non-profit newspaper still needs good revenue sources. This proposal by Congressman DeSaulnier will open up new possibilities for sustaining quality journalism in American communities. We appreciate the concept and, even more, we welcome the interest from an important member of Congress in helping newspapers that are at risk to survive,” said Andrew Johnson, President, National Newspaper Association.
“This legislation carries the promise of helping news outlets large and small, in big cities and small towns, throughout the country. It will allow for innovation into new models of journalism and carries significant potential to address the growing problem of ‘news deserts’ around the country where the for-profit model is not sustainable,” said Angie Muhs, President, Associated Press Media Editors.
“The nonprofit model of journalism may well be one viable future of journalism, at least where smaller publications are involved. This is a constant topic of discussion among our membership which is why our organization welcomes this legislation as a means of increasing the likelihood that those who choose can convert themselves to non-profit status, while maintaining a strong journalistic enterprise,” said Molly Willmott, President, Association of Alternative Newsmedia.
“At a time when editors around the country continue to see newsrooms shrink in the face of financial constraints, we welcome every avenue to greater revenue. This legislation offers significant assistance that will allow news organizations to survive without constraining their actual journalism in any way,” said Nancy Barnes, President, American Society of News Editors.
“Community newspapers are woven into the fabric of American society and provide accurate and trusted information that improves the lives of individuals in the communities they serve. It is no secret that newspapers face an increasing number of existential threats from online competitors which have left them with a decreasing number of revenue opportunities. This measure would provide news organizations with the means to better rise to these challenges and continue to play a vital role in their communities by holding the feet of the powerful to the fire and giving voice to the powerless,” said Jim Ewert, General Counsel, California News Publishers Association.
Since 2017, estimated daily newspaper circulation fell 11 percent from the previous year (Pew Research Center). Congressman DeSaulnier recently established a working group of dedicated Members of Congress from areas affected by a drought of high-quality journalism. Together they have been working to highlight this crisis and bring attention to the need to promote local journalism, including by holding a Special Order on the floor of the U.S. House of Representatives and introducing the Journalism Competition and Preservation Act (H.R. 2054), a bill to create a temporary safe harbor from anti-trust laws to allow news organizations to join together to negotiate with dominant online platforms to get a fair share of advertising profits.
It looks like this front-page New York Times story that has drawn so much attention is almost a complete botch. Headlined “Mexico Agreed to Take Border Actions Months Before Trump Announced Tariff Deal,” the premise is that President Trump got nothing out of his tariff standoff and subsequent agreement with Mexico to increase border security. Michael D. Shear and Maggie Haberman write:
The deal to avert tariffs that President Trump announced with great fanfare on Friday night consists largely of actions that Mexico had already promised to take in prior discussions with the United States over the past several months, according to officials from both countries who are familiar with the negotiations.
The story goes into considerable detail in an attempt to show that there’s nothing new about the U.S.-Mexico agreement, and that Trump is boasting about it solely as face-saving gesture.
But wait! Inside the paper, under the headline “Mexico Sets Domestic Priorities Aside to Meet Terms of U.S. Trade Deal,” Azam Ahmed reports that Mexico is going to considerable lengths to meet the terms of Trump’s demands in an effort to head off those tariffs. Ahmed writes:
Under an agreement hammered out in marathon negotiations with American officials over the last few days, Mexico agreed to send up to 6,000 National Guard troops to its southern border with Guatemala. It also agreed to allow more asylum applicants to wait in Mexico while their cases are pending in the United States.
Further down in the story, there’s this:
But as Mr. Trump’s hectoring of Mexico on migration has increased, so, too, has the willingness of the López Obrador administration to take measures to calm its northern neighbor.
After initially saying the Remain in Mexico program was a pilot, Mexican officials quickly expanded it to new cities. Now, as part of the deal on Friday, they have agreed to expand it across the entire border.
Hat tip to Daniel Radosh of “The Daily Show,” who tweeted this out on Saturday:
And yes, indeed, one of them has to be incorrect. Given the level of detail in the second story, I’d say it’s the front-page splash that needs correcting.
If nothing else, this ought to quiet those on the left who’ve been accusing Haberman of being in the tank for Trump.
In his book “The Inevitable,” the technology journalist Kevin Kelly writes, “The future happens very slowly and then all at once.” That seems like as good a description as any of what’s going on at GateHouse Media, the nationwide chain that owns more than 100 newspapers in Greater Boston. After years of gradual contraction, the company is suddenly laying off journalists by the dozens and merging its smaller weeklies. In fact, you might say the future has arrived as quickly as one, two, three:
1. On May 23, word began to trickle out that massive layoffs were taking place at GateHouse papers around the country. A crowdsourced spreadsheet showed that two local dailies, The Providence Journal and Worcester’s Telegram & Gazette, were especially hard hit, losing about six journalists each (the Worcester numbers include Worcester Magazine, another GateHouse title). All told, the newspaper analyst Ken Doctor wrote for Nieman Lab, it looked like about 200 people would lose their jobs, offset slightly by the addition of 30 investigative and regional positions.
2. On May 30, The Wall Street Journal reported that the giant Gannett chain, best known for publishing USA Today, had held merger talks with GateHouse after earlier fending off a hostile acquisition attempt by MNG Enterprises, the hedge fund-owned group formerly known as Digital First Media. As I wrote earlier this year, Gannett is a slightly better steward of local journalism than MNG, although it has decimated properties such as Vermont’s Burlington Free Press.
3. The next day, on May 31, I obtained a confidential memo from GateHouse New England executives informing the troops that 50 of the company’s Greater Boston weeklies would be merged into 18. Although the memo said there would be no reduction in coverage, venerable titles such as the Danvers Herald and the Ipswich Chronicle will pass into history.
In many ways it felt like the end game was at hand, even if no one knows quite what that will look like. Kirk Davis, chief executive officer of GateHouse and chief operating officer of its parent company, New Media Investment Group, expressed optimism when I contacted him, though he noted the seriousness of the situation.
“We remain positive about the future for local media but certainly acknowledge that the business model for community news is under pressure,” he said by email.
The turmoil has reached the upper echelons of GateHouse and New Media. The Boston Business Journal’s Don Seiffert reported two weeks ago that New Media’s shareholders recently rejected a compensation plan that had paid Davis $1.7 million in 2018. Share prices are down, and New Media chairman Wesley Edens has been replaced by Mike Reed, the company’s chief executive.
If the future is murky, the history is clear enough. I’ve been following the devolution of local newspapers into chain ownership for more than 25 years. I also worked briefly in 1990 for North Shore Weeklies, one of GateHouse’s predecessor regional chains. It’s a story of combining more and more newspapers in a desperate attempt to achieve economies of scale sufficient to offset the overall decline of the newspaper business. It hasn’t worked, and there is little evidence that it ever will. But it has not been for lack of trying.
Our tale begins in the 1960s, when enterprising newspaper publishers built about a half-dozen regional chains in Greater Boston. Starting in the late 1980s and early ’90s, Fidelity Capital, an arm of the investment giant, assembled many of these groups into what became Community Newspaper Co. Among the executives who passed through CNC was a young Kirk Davis, who did a stint as president and publisher.
In 2001, Fidelity cashed in by selling CNC for an estimated $150 million to Pat Purcell, then the owner and publisher of the Boston Herald. Purcell, perpetually challenged financially, turned around five years later and sold CNC to the company that would become GateHouse for a reported $225 million. At the same time GateHouse bought The Patriot Ledger of Quincy, The Enterprise of Brockton, and their associated weeklies for another $165 million. Davis had been running those papers, so the acquisition brought him back into the fold.
In 2008 I wrote about GateHouse for CommonWealth Magazine. By then Davis was president and publisher of the New England division. The company was laying off journalists, continuing a trend begun under Fidelity and Purcell. But Davis, ever upbeat, hoped GateHouse could get ahead of the curve.
“We feel that community newspapers have a very viable future and, juxtaposed against the trend overall, are performing very well,” Davis told me at that time. “I believe in it, and I believe it’s going to stay strong.”
Five years later, GateHouse went into bankruptcy, only to emerge within a few months. Since that time the company has continued to build its empire while shrinking its reporting corps.
Like many observers, I’ve been harshly critical of GateHouse’s cost-cutting measures, which in many cases have left its newspapers without the resources to meet the information needs of their communities. Newspapers in general are an endangered species. But when a chain takes on debt to keep buying more properties and extracts revenues from its individual papers in order to satisfy shareholders, there is simply less money available for journalism than there would be with independent ownership.
At the same time, it’s important to acknowledge that there is a difference between GateHouse and, perhaps, Gannett — both of which seem to be intent on developing a long-term survival strategy — and MNG, which by all appearances is squeezing the last few drops of revenue out of its papers before walking away. (In Massachusetts, MNG, which is owned by the hedge fund Alden Global Capital, controls the Boston Herald, The Sun of Lowell, and the Sentinel & Enterprise of Fitchburg.)
“GateHouse does try — unlike Alden, for instance — to make small investments in some sort of a future,” Ken Doctor wrote recently. “Its digital marketing and events business investments are examples.”
In our recent email exchange, Davis emphasized steps that GateHouse has taken to move toward sustainability, including the outsourcing of design functions to a facility in Austin, “constant engagement and surveys,” newsletters, audio, digital storytelling, data-based investigative reporting, and more.
“In New England,” he said, “we’ve recently added a regional engagement editor and regional newsletter editor. We’re also recruiting a New England investigations editor with a high focus on data.”
Davis also touted the adoption of the Accelerator Team Model, which, in essence, involves trying to do a better job of defining audiences as well as the priorities, teams, and plans needed to serve those audiences.
I asked Davis about GateHouse’s decision to cut The Providence Journal’s newsroom just as The Boston Globe was gearing up with a new Rhode Island initiative. His answer: “While we regret any involuntary staff reductions, the layoffs last month had a small impact on local reporting. My personal view on competitive threats is this: the more any local media can invest in covering our country’s local towns the better, whether we are there or not…. We’ll compete with and celebrate expansive efforts in local news.”
I also asked where he imagines GateHouse will be five years from now. Davis: “My belief is that our industry will be digitally proficient in all aspects of serving our communities. Certainly there will be fewer ‘print-based’ publications. Much is written about the likelihood or necessity of consolidation in our industry. We are one of the larger groups and hopefully our scale and investments can prove beneficial to our industry. Bigger isn’t better though, better is better. That’s where we need to focus — always.”
My own view is that independent, grassroots news organizations are going to show the way. It won’t be easy, and some will fail. But in New England, nonprofits such as the New Haven Independent and VT Digger as well as locally owned for-profit newspapers such as the Berkshire Eagle and the Portland Press Herald are simply doing a better job of covering their communities than GateHouse, Gannett, or MNG.
Nevertheless, it looks like GateHouse or a permutation of it will be with us for some time to come. Given the importance of local journalism to democracy, we can only hope that Davis, Reed, and company figure out a way to stop the endless bleeding and start growing again.
The Boston Globe’s Rhode Island vertical today features an investigative report from ProPublica and The Public’s Radio (formerly Rhode Island Public Radio) on “whether failures in Rhode Island’s 911 system are costing lives.” ProPublica stories are licensed under Creative Commons, which means that anyone can republish them for free as long as they give credit. (It’s a little more complicated than that, but not much.)
But if you go to the ProPublica version of the story, you’ll see a note that it was “co-published” with the Globe, which suggests some sort of exclusive arrangement — or at least a head’s-up. (The Public’s Radio version is here.) I asked Globe editor Brian McGrory to explain. His emailed answer:
We’ve got a good relationship with ProPublica. Its editors were kind enough to see if we had interest in co-publishing this story, an important look at a flawed system. We were delighted to do it. and it’s getting significant readership. We’ll keep looking for other opportunities to collaborate in Rhode Island, adding to the work of the three excellent reporters that we have on the ground.
Smart move by the Globe, as it was an easy way to get access to an important investigative story as well as to give a boost to its Rhode Island initiative. There is nothing to stop The Providence Journal or other news organizations from publishing the story, but it doesn’t seem likely given that the Globe, ProPublica and The Public’s Radio have already run it.
I also asked McGrory if he could say what region the Globe might target next as part of what looks very much like an effort to expand its digital footprint in various underserved parts of New England. Not surprisingly, he demurred — and, of course, it’s possible that no decisions have been made.
Is taxonomy destiny? Less than two weeks after GateHouse Media’s Providence Journal laid off a reported six journalists, The Boston Globe has unveiled a new online vertical for its expanded Rhode Island coverage. And the URL is intriguing. Rather than going with bostonglobe.com/metro/rhode-island, the address is bostonglobe.com/metro/new-england/rhode-island (emphasis added).
The Globe’s move into Rhode Island has prompted speculation that other regions might be targeted as well. And, as it turns out, there is a New England vertical on the site, although it doesn’t seem to be listed anywhere. You have to type it in. Who knew?
The great irony would be if the Globe made a move into Worcester, where GateHouse just laid off about six journalists at the daily Telegram & Gazette and the weekly Worcester Magazine. In 2014 then-new Globe owner John Henry sold the T&G to a Florida chain after reportedly assuring staff members that he would keep the paper if he couldn’t find a local buyer. Henry later told me he only remembered promising that he wouldn’t sell to GateHouse — which, of course, ended up with the paper anyway.
In any case, it seems that the Globe has built a system that would easily accommodate future expansion.
There is nothing good about the ongoing economic collapse of local newspapers. But if you squint hard, you can see a few hopeful signs amid the gloom. Recently I wrote about The Salt Lake Tribune’s bid to become the country’s first nonprofit daily newspaper.
This week I want to take a look at an idea that, in some ways, is even more audacious: the Arkansas Democrat-Gazette’s announcement that it will abandon weekday print and give an iPad to all of its paying subscribers so they can read the digital edition.
The news came in the form of a letter to subscribers by publisher Walter Hussman, who said that all of the Democrat-Gazette’s customers will be offered an iPad later this year. The emphasis will be on a replica edition — that is, an electronic paper that looks exactly like the print version, an old-fashioned concept still popular with many readers. The paper will continue to offer a Sunday print edition.
“Although newspapers will never be as profitable as they once were,” Hussman wrote, “we believe we have found a way to return the Arkansas Democrat-Gazette to profitability and provide a better and more robust reading experience for our subscribers.”
The shift has already taken place in some Arkansas counties, with Democrat-Gazette employees meeting with befuddled subscribers at Holiday Inns and even in their homes to help them navigate the online paper. Indeed, according to the latest figures from the Alliance for Audited Media, weekday digital now outsells print by about 86,000 to 82,000. Print remains the choice on Sunday by a margin of 118,000 to 10,000. But the ADG, as the paper is known, is rapidly moving toward a day when its weekday print circulation will be zero.
“If 70% of subscribers stay with us, the cost savings will let the ADG hire more reporters,” wroteStyle section editor Celia Storey on her public Facebook page. And just in case you were wondering, Storey also explained that readers who let their subscriptions lapse will soon discover that their iPad no longer works.
The notion of giving away iPads in order to cut the cost of printing and delivering the physical newspaper might seem revolutionary, but it’s been many years in the making. Back in the early 1990s, an executive for the now-defunct Knight Ridder chain named Roger Fidler was telling anyone who would listen that newspapers of the future would give away cheap digital tablets so they could shut down their printing presses. In some ways we still haven’t caught up with Fidler, who envisioned tablets you could roll up and stick in your pocket and that would offer resolution as high as a good quality magazine. (Click here to watch a 1994 video of Fidler explaining his remarkably prescient idea.)
The Boston Globe recently also reached something of a landmark on the road to a post-print world. Writing in the Boston Business Journal, Don Seiffert reported that the Globe’s digital circulation has now moved ahead of its weekday print circulation by a margin of 112,000 to 99,000 — and that represents an overall increase (combined print and digital) of about 7,000 paying subscribers since mid-2016. Can free iPads be far behind? (As with the ADG and virtually every other paper, the Globe’s Sunday print edition remains its largest, with a circulation of 172,000, according to the Alliance for Audited Media.)
What’s happening in Salt Lake, Arkansas, Boston, and a few other places whose newspapers are owned by civic-minded local publishers should offer encouragement. Elsewhere, newspapers are being shackled by corporate chains.
The money-losing McClatchy group reported earleir this month that its 30 properties, which include large papers such as the Miami Herald, The Sacramento Bee, and The Charlotte Observer, have signed up just 179,000 digital-only subscribers — and that’s an increase of 60 percent over a year ago.
The newspaper analyst Ken Doctor writes at Nieman Lab that the bottom-feeding Gannett chain continues to fight off an acquisition attempt by the even worse MediaNews Group (formerly Digital First Media), a battle between unappetizing rivals that I wrote about a few months ago.
Amid such chaos and greed, it’s important to keep in mind that some newspaper owners continue to search for a business model that doesn’t require slashing their newsrooms to irrelevance. Seen in that light, accelerating the transition from print to digital is an investment in the future.
The math to get from seven-day to one-day print remains daunting. Print subscribers are still more valuable. Not only do they pay more, but print ads are worth much more than commodity digital advertising. But if newspapers can get to the point over the next few years at which they can dump print, it will save a ton of money that they now spend on what is essentially a 19th-century manufacturing and delivery operation.
The Arkansas Democrat-Gazette may show the way.
I’m going to be talking with Barbara Howard on WGBH Radio (89.7 FM) this afternoon about the news that The Boston Globe now has more paid digital than print subscribers — a significant landmark that has nevertheless led to some head-scratching among those who are wondering what it means.
The Globe has been lucky to have an attractive market with higher-than-average education and income; it’s been smart to keep cuts to the newsroom smaller than what its peers have. And it’s also still a good newspaper — something that’s harder to say about other metros that have been cut to the marrow.
Here’s some perspective. A lot of us thought that the Globe was the first large regional daily cross this particular line. (Our national newspapers, The New York Times, The Wall Street Journal and The Washington Post, have been selling more papers online than in print for quite some time.) That’s not quite true. As I was researching another story, I discovered that the Arkansas Democrat-Gazette beat the Globe to it. But there are some unusual aspects to the case of the ADG, which I’ll be writing about next week.
I think it’s safe to say that the head-scratching comes about from a suspicion that the Globe’s supposed digital success is really more a sign of print failure. And there’s no question that the Globe’s print operation is on life support. But the digital accomplishment is real.
Take a look at Seiffert’s chart. In June 2016, the Globe had 67,429 digital-only subscribers and 135,231 print subscribers, for a total of 202,660. By March of this year, the numbers were 112,241 digital and 98,978 print for a total of 211,219. That’s an overall increase of 8,559 paid subscribers. And though digital doesn’t bring in as much as print, it’s still real money — especially with the Globe’s unusually high digital rate of $30 a month once initial discounts have worn off.
Not only has the Globe under John Henry’s ownership maintained its quality better than most major metros, but its user experience, if not great, is at least good enough. It’s also in the midst of transitioning to The Washington Post’s Arc content management system, and though there appear to be a few bugs to work out, we paying customers should expect to see an improving digital product in the months ahead.
But no, print is not doing well. If you want to go back to the Globe’s heyday in the
1980s early 1990s, the paper at one time sold more than 500,000 papers on weekdays and more than 800,000 on Sundays. As recently as the fourth quarter of 2015, weekday print circulation was still 143,348 and 255,735 on Sundays. Now, in addition to that 98,978 figure for weekdays, Sunday is just 172,067. (Figures from the Alliance for Audited Media.)
What happened is no different from what’s happening anywhere, except that there were some special circumstances with the Globe. First, in early 2016, the Globe changed home delivery vendors, with disastrous results. The paper was able to recover fairly quickly by switching back to the original vendor. But then came the opening of the new, not-ready-for-prime-time Taunton printing plant in mid-2017, and it was months before printing and distribution returned more or less to normal.
Unreliable delivery and the high cost of a print subscription ($1,000 a year) no doubt helped drive a lot of customers to digital-only. In the long run, that’s going to benefit the Globe, especially given how cheap it is to add digital subscribers. But since print readers remain more valuable than digital subscribers, moving toward an all-digital future more quickly than is absolutely necessary results in money left on the table.
There is a ridiculous quantity of media news to sift through this morning. I just want to make a brief comment about The Boston Globe’s report that publisher-owner John Henry twice tried to buy the Everett casino.
Newspaper owners can do what they like. The Globe already has the challenge of covering Henry’s Red Sox, and The Washington Post must negotiate owner Jeff Bezos’ ownership of Amazon. Patrick Soon-Shiong, the billionaire surgeon who owns the Los Angeles Times, is an entrepreneur who’s been involved in his share of controversies. Corporate chain owners have their own business entanglements.
Still, casinos are a miserable, contentious business. We should all be glad that Henry stayed out of it — and I wish he’d realized even before making an inquiry that it would put his journalists in a difficult position.