Ellen Clegg and I talked with Hillary Chabot of News at Northeastern about our book project, tentatively titled “What Works: The Future of Local News.”
Category: Local News
How a group of Denver area newspapers were saved from corporate ownership
Just before Thanksgiving last year, Melissa Milios Davis was contacted by Jerry Healey, the co-owner — along with his wife, Ann Healey — of Colorado Community Media, which publishes 24 weekly and monthly newspapers in the Denver suburbs.
The Healeys were approaching retirement and looking to sell, and they were hoping to avoid turning over their life’s work to a corporate chain owner or a hedge fund. Milios Davis, vice president for strategic communications and informed communities at the Gates Family Foundation, serves on the executive committee of the Colorado Media Project, which has been seeking ways forward for local news since 2018.
That encounter, Milios Davis said at a recent webinar (you can watch it here; background information here), led to the sale last month of the Healeys’ newspapers to a new entity whose majority owner will be The Colorado Sun, a startup digital news operation that’s run as a public benefit corporation. That means the 24 papers, like the Sun, will not be organized to enrich its owners; any profits they earn will be rolled back into news coverage and other operations.
“These are still profit-making enterprises. It’s a business,” said Milios Davis, adding it would have been a “huge loss” if the papers had fallen into the wrong hands.
Also speaking at the webinar, organized by the Media Enterprise Design Lab at the University of Colorado Boulder, were Lillian Ruiz, co-founder and managing director of the National Trust for Local News, and Larry Ryckman, editor and co-founder of the Sun. The moderator was Nathan Schneider, an assistant professor of media studies at the university.
According a recent article about the deal by Corey Hutchins of Colorado College, the papers will be owned by the newly formed Colorado News Conservancy, which in turn is co-owned by the National Trust for Local News and the Sun. Hutchins reported that the 40 employees who worked for the Healeys, about half of them journalists, would keep their jobs.
The conservancy is currently seeking a publisher, Ruiz said at the webinar, and has invested a considerable amount of attention in the process. “We didn’t want to create just a replication of who have we had some handshakes with over a highball,” she said.
The Sun itself, which was founded after the meltdown of The Denver Post under the ownership of the hedge fund Alden Global Capital, is continuing to grow, said Ryckman — from a staff of about 10 when I wrote about the Sun for the Nieman Journalism Lab last fall to 15 today, with more on the way. He described the chance to save the community newspapers as something that was too important to pass up.
“At least on the Sun side, this came together pretty quickly,” he said. “This absolutely was a cause that was near and dear to our hearts…. We know who’s first in line when it comes to buying newspapers these days, and no one wants to see that happen.”
What helped jump-start the deal, said Milios Davis, was a study that the Colorado Media Project conducted several years ago in partnership with the Colorado Press Association. Among the findings: the number of journalists covering local news had been cut in half over the previous decade, in line with what was taking place nationally; and that of 151 newspapers they could identify, 93 were still locally owned.
“We saw on the horizon that a lot of these were … older owners” who lacked a succession plan, she said, explaining that there were 44 in that category. “We were looking at this as a tidal wave that would slowly crash on the shores,” which led to conversations about how to help them transition to new local ownership.
And then the Healeys came along.
One of the most important takeaways from what is happening in Colorado is that local news can still be run on a sustainable basis, and that corporate control and the gutting of newsrooms are not inevitable. As I wrote a few weeks ago, I would love to see the Colorado story replicated across the country. Ruiz said the exact model being used in Colorado might be unique to that area. But she added that her organization is looking at what might work in other parts of the country — especially in communities of color.
So how do we wrest control of local news away from chain owners? Report for America co-founder Steven Waldman, who’s been everywhere lately (it also turns out that he’s a co-founder of Ruiz’s organization), wrote an op-ed piece for the Los Angeles Times calling for tax breaks for newspaper owners who sell to nonprofits or public benefit corporations.
That would provide an incentive for the likes of Alden and Gannett to take their money and go home. I would add another incentive: tax penalties to be imposed on for-profit owners of newspaper chains of a certain size that are not owned locally.
Communities deserve a chance to take charge of their news and information. Three years after Alden all but destroyed The Denver Post, we’re starting to see a renaissance fueled by a new media venture and an old one that’s been given new life.
Local news as infrastructure
Report for America co-founder Steve Waldman is suggesting that a plan he’s been touting to help the beleaguered local news business be included in whatever infrastructure bill comes out of Congress.
Writing recently for Poynter Online, Waldman said that each American should be given a $250 tax credit either to buy a subscription to a local news source or to make a donation to a nonprofit news organization. He notes that Sen. Maria Cantwell, the chair of the Senate Commerce Committee, has come out in favor of $2.4 billion to bolster local news. Waldman writes:
Local news is, in fact, the civic infrastructure of democracy.
But let’s get less metaphorical. If the health of democracy wasn’t reason enough, there’s another, practical reason why help for local news should be part of the infrastructure bill. If the government is going to spend a trillion or so dollars on public works projects, we need local watchdog reporters to make sure the money is spent well.
Waldman has been promoting the $250 tax credit for some time, and he says it has some bipartisan support. But the idea of rolling it into the infrastructure bill seems worth exploring as a way of actually making it a reality.
Waldman discussed his Poynter piece with Brian Stelter last weekend on CNN’s “Reliable Sources.” He’s also involved in an organization called the Rebuild Local News Coalition, comprising more than 4,000 local newsrooms (up from about 3,000 at the time of the Poynter piece) and journalism advocacy organizations.
The Washington Post blows the whistle on a dubious investigative website
The Washington Post published a story of paramount importance last Friday. According to reporter Elahe Izadi, a website called the Checks and Balances Project is offering the sort of deep investigative reporting that most local news outlets no longer have the resources to carry out.
But there is a huge catch. There have been some prominent instances of pay-to-play, with organzations making donations that are followed by stories that will either make them look good or their enemies or competitors look bad. Izadi writes:
When it investigated the hotel industry, it was after it had received a grant from Airbnb. A high-profile investigation into Arizona utility regulators came after Checks and Balances received money from a solar power company, the company disclosed in 2015.
Now Checks and Balances is investigating a massive hospital system in Virginia named Sentara, publishing regular stories and asking patients and employees to send tips that might reveal how the nonprofit hospital “piled up $6 billion in liquid assets,” among other issues.
These stories started appearing the same month that a medical school in a complex dispute with Sentara hired a public relations firm that happens to share a founder and financial ties with Checks and Balances.
Communities are vulnerable to a site like Checks and Balances, of course, because of the demise of local news over the past generation. If your local newspaper shut down or has been so decimated that it can’t offer more than cursory news coverage, then you’re going to be vulnerable to arrangements like this.
The Checks and Balances website touts itself as an “Investigative Watchdog Blog
Holding Government Officials, Lobbyists and Corporate Management Accountable to the Public.” Izadi is careful to point out that the project has done good work over the years, some of which has been picked up by larger media outlets. Its editor was formerly employed by USA Today. Scott Peterson, the executive director, told the Post that funders do not influence the site’s journalism — but Izadi writes that those sources are not always disclosed to readers, either. Moreover, most of its funding comes from an organization called Renew American Prosperity, which does not reveal its donors. From the organization’s website:
We encourage you to be public about your identity as a donor. We’re proud to have the support of such notable funders as philanthropist Lucy Rockefeller Waletzky, legendary entrepreneur Brad Mattson of Siva Power, Silicon Valley attorney Mike Danaher, and communicator extraordinaire Matthew Lewis.
Should you want to keep your support for Renew American Prosperity private, as do others, we also welcome your donations. Private donor support will remain strictly private, out of respect for 501(c)4 tax law that allows donors who wish to be private to remain so. We will never sell or make available to other organizations our supporter lists.
Peterson pushed back on the notion that Checks and Balances isn’t transparent, arguing that what he’s doing is no different from what mainstream outlets do when they accept advertising or, in the case of nonprofits, grants and donations. And of course these things have to be seen on a continuum. When news executives decline to report an important story because they don’t want to offend an advertiser, that’s a scandal — if the public ever learns about it. Ethical nonprofit news outlets are scrupulous about disclosing the sources of their funding, and in making it clear to funders that they will have no influence over coverage. Checks and Balances, at least as described by the Post, appears to go beyond that.
The Post’s story comes at a time when we’re also dealing with the scourge of “pink slime” journalism — community websites set up in areas that are unserved or underserved by local news outlets and that are actually controlled by partisan political interests. As I wrote last fall, most of these sites are Republican, but some are Democratic as well. What they’re not is independent, which is a key part of ethical journalism.
Coming up with funding for investigative projects, especially at the local and regional level, is incredibly difficult, and the Checks and Balances folks may have believed they could cut ethical corners without it harming the integrity of their work. But it looks like dangerous business to me, and I hope it’s not the start of a trend.
A Northeastern study shows how animation can enhance local TV news
My Northeastern colleagues Mike Beaudet and John Wihbey, along with some amazing students, have been studying ways to improve local television news. Their latest installment looks at how animation can increase viewer interest, attract younger viewers and make it easier to understand the essential facts of a story.
According to a summary of their findings that they wrote along with graduate student Anna Campbell for RTNDA.org:
After viewing the local news stories that took a fresh approach to animation and graphics, viewers preferred that style across the board, with audiences more likely to rate the animated stories as clear, compelling, and memorable. The graphically-enhanced stories were generally perceived both as more relevant in content and resonant in tone. Animation also captured positive descriptions in the open-ended questions we posed.
As you’ll see if you watch the video presentation above, animation essentially takes the place of irrelevant and boring B-roll. And when Beaudet, Campbell and Wihbey refer to animation, they don’t mean something you might see on “Adult Swim.” Rather, they’re talking about presenting visualizations that help viewers understand what they’re watching.
Media observers like me don’t always pay much attention to local TV news. But it’s incredibly important — it’s the second-most popular news medium that we have (the internet comes in first), and it’s more trusted than other forms of news. So congratulations to my colleagues and their students for finding ways to make it better.
You can find more of their work at Storybench, a School of Journalism web publication that covers media innovation.
A conversation about news deserts and ghost newspapers
I had a chance Thursday to talk about news deserts and ghost newspapers with Gina Baleria, the host of the podcast called “News in Context.” Baleria is a former radio journalist who’s now an assistant professor of journalism, media writing and digital media at Sonoma State University. You can listen to our conversation or grab the feed right here.
And so the cutting begins
Alden Global Capital is wasting no time in taking a chainsaw to its newly acquired newspapers. NPR media reporter David Folkenflik tweeted a thread that contains some horrifying details about what the hedge fund has in store for Tribune Publishing:
$60MM of that debt carries a 13% rate – it was borrowed from Media News – Alden Global's other newspaper division.
h/t to @benyt for initial tweet about NYDNews & memo
— David Folkenflik (@davidfolkenflik) May 26, 2021
How about that? A $60 million loan with a 13% interest rate that Alden will pay to itself.
The cuts, by the way, will come on top of massive downsizing that took place in 2020, when Alden was a mere minority shareholder. Tribune’s Chicago Tribune reports:
Last year, Tribune Publishing employment fell by 30%, dropping from 4,114 employees at the end of 2019 to 2,865 employees at the end of 2020, according to the company’s annual reports. The company had a total of 896 newsroom employees across its eight markets entering this year.
Finally, the New York Post’s Keith Kelly writes that Los Angeles Times owner Patrick Soon-Shiong, who was in a better position than anyone to stop the sale of Tribune to Alden, is “taking a lot of heat” for not voting against it — or at least for not abstaining in a way that would have stopped the deal.
Kelly quotes an unnamed source who calls Soon-Shiong “second most despised man in newspapers today behind Heath Freeman,” Alden’s president. Nice quote. I wonder who said it?
Can independent local news succeed? It already is. And we’re going to tell that story.
A big announcement from Ellen Clegg and me: We are working on a book about successful community journalism projects across the country. The tentative title: “What Works: The Future of Local News.” Today we outline our plans for the Nieman Journalism Lab.
This hasn’t been a secret. We actually started our reporting more than a year ago but had to hit pause when the pandemic came. Now we’re starting up again. And I’m really excited to be working with a pro like Ellen. Much, much more to come.
The book is scheduled to be published by Beacon Press in the second half of 2023.
Alden’s victory marks a dark day for newspapers — but it could lead to a brighter future
It was, in a sense, the perfect ending to the disastrous $630 million sale of Tribune Publishing to the hedge fund Alden Global Capital. After Tribune’s board voted earlier today to turn over its nine major-market dailies to the worst newspaper owner in the country, it wasn’t entirely clear that the vote was valid. And I’m guessing that the Newspaper Guild, which has been fighting the sale, will file a challenge. Elahe Izadi and Sarah Ellison of The Washington Post explain:
But participants also remained uncertain well into Friday afternoon about the potential impact of Patrick Soon-Shiong’s surprise announcement, made via a spokeswoman, that he “abstained” from the vote. The California biotech billionaire owns the Los Angeles Times — which is unaffected by the sale — and about one-quarter of Tribune shares, meaning he had enough votes to torpedo the takeover.
According to Tribune Publishing proxy filed on April 20 with the Securities and Exchange Commission, an “abstain” vote would be counted as “against” the merger. Yet it appears that Soon-Shiong ultimately did not cast his ballots in a way that would have stopped the Alden sale. Unnamed Tribune Publishing officials told the Chicago Tribune that the proxy ballots registered to Soon-Shiong were submitted without the “abstain” box checked, and that his votes were counted as “yes” for the merger.
Had he not voted at all, his silence would have been recorded as a vote “against” the merger. But ballot submitted without any boxes checked at all were understood as endorsing the board’s recommendation to approve the merger.
David Folkenflik of NPR has a comprehensive account of what went down today and what it means for the future.
There are two villains here in the looming destruction of some of our most important newspapers, including the Chicago Tribune, The Baltimore Sun and, closer to home, the Hartford Courant. One is Soon-Shiong. I realize he has his hands full with the LA Times, and I’m glad that he appears to be recommitted to that paper after rumors circulated earlier this year that he was looking to sell. But all he had to do today was vote “no,” buying more time for another bidder to emerge. Instead, Soon-Shiong will walk away with $150 million.
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The other villain is a Swiss billionaire named Hansjörg Wyss. At one point, Baltimore hotel magnate Stewart Bainum put together a $680 million bid that was largely aimed at breaking up the chain and finding local buyers. Wyss wanted the Chicago Tribune — but reportedly decided against it once he learned that its finances were in worse shape than he’d been led to believe. He also reportedly lost interest after his advisers convinced him that, no, the Trib couldn’t be transformed into a national paper in league with The New York Times or the Post. With a net worth of $6.4 billion, though, Wyss easily could have sucked it up rather than walking away.
I’m not going to single out mega-billionaire Jeff Bezos as a villain, even though I recently argued that he should add Tribune to his ownership of the Post. It would have been nice, but there was never a hint that he had any interest.
And here’s a really terrible wrinkle. Earlier this year, Alden had agreed to buy Tribune and then sell The Baltimore Sun to Bainum, who in turn planned to donate it to a nonprofit. Bainum decided to try to buy the entire chain after concluding that Alden was trying to chisel him on the terms of the deal. Now Alden will keep all nine Tribune metros plus some pretty vital smaller papers, such as the Capital Gazette of Annapolis, Maryland.
Alden will soon control two newspaper chains. In addition to Tribune, Alden owns MediaNews Group (also known as Digital First Media), whose 100 or so papers include The Denver Post, the Orange County Register in Southern California and, in Massachusetts, The Sun of Lowell, the Sentinel & Enterprise of Fitchburg and the Boston Herald. Its papers are mere shadows of their former selves, barely able to cover the communities they purportedly serve.
If there’s a bright spot — and there is — it’s that entrepreneurial journalists move in where there is market failure. Former Denver Post journalists are now operating The Colorado Sun, a digital operation that recently acquired a chain of 24 regional newspapers around Denver. In Northern California, two former Alden journalists are now running a news co-op called The Mendocino Voice. And in Baltimore, Bainum says he’s going to investigate launching a nonprofit alternative to the Sun.
This may be the darkest day in the history of American newspapers. My hope is that, five years from now, we’ll look back and see that something good came out of it.
Show us the money: NYC’s innovative approach to funding local news
One of the more vexing dilemmas in thinking about ways that the government can help ease the local news crisis is how to maintain independence between the dog and the watchdog.
It’s not easy. Nonprofit status brings with it tax advantages that amount to an indirect benefit. Steven Waldman, the co-founder of Report for America, has proposed a $250 refundable tax credit to pay for local news subscriptions or to donate to nonprofit media outlets. Such approaches, though useful, fall far short of what’s needed.
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In New York, Mayor Bill de Blasio has come through with something much more direct and substantial: a vast increase in what the city spends on advertising in community newspapers and websites. As a result of his executive order in May 2019, city agencies must devote 50% of their print and digital ad budgets to such outlets. According to a study of the initiative by CUNY’s Newmark School of Journalism:
In its first year of implementation, the executive order far outperformed its own expectations, delivering 84 percent of the budget, nearly $10 million, to more than 220 outlets serving New Yorkers in every neighborhood in all five boroughs in 36 languages besides English.
Keep in mind that Facebook recently announced that it would set aside just $5 million to help local news organizations across the entire country — only if they would agree to set up shop on Facebook, of course.
In a commentary for The New York Times, Newmark Dean Sarah Bartlett and Julie Sandorf, Charles H. Revson Foundation, president of the Charles H. Revson Foundation, wrote that de Blasio’s program has had a dramatic effect. For instance, Brooklyn’s Haitian Times, which nearly went out of business in 2013, received $73,489 in advertising revenues from the city and was able to continue covering its community during the COVID pandemic. Bartlett and Sandorf add:
The federal government has an advertising budget of $5 billion, so a program like New York City’s could provide an enormous boost to community news organizations at a time when local journalism around the country is in crisis.
A program such as New York’s doesn’t provide the true firewall that would be needed to ensure that news organizations aren’t slanting their coverage in order to keep the money rolling in. City officials could cut back or eliminate spending on media outlets whose coverage has offended them. Community groups that are insulated from politics could be charged with making the spending decisions, but those have their own biases.
Still, give de Blasio credit for finding a way to help local news organizations at a time when viable solutions are few and far between.