H.F. “Gerry” Lenfest didn’t want to run a newspaper. In 2014 the Philadelphia billionaire, who died last week at the age of 88, unexpectedly won an auction to buy the city’s paper of record, the Inquirer, and its sister properties, the Daily News and Philly.com, media outlets that he already owned in part and was hoping to unload. “He did not expect to have to write a check that day,” Joel Mathis, a former reporter for Philadelphia magazine, told me. “He thought he was going to be getting a check that day.”
Just a few weeks later, Lenfest’s business partner, Lewis Katz, was killed in a plane crash along with six others, leaving Lenfest as the sole, unhappy proprietor. Lenfest’s solution to his dilemma was an act of generosity that continues to reverberate, and that could serve as a possible blueprint for saving the shrinking newspaper business. In early 2016 he donated the properties to a nonprofit organization, the Philadelphia Foundation. And he endowed the institute that the foundation set up to run the properties — now known as the Lenfest Institute for Journalism — with an initial $20 million from his fortune.
“Of all the things I’ve done, this is the most important. Because of the journalism,” Lenfest said when the complicated transaction was announced.
As it happened, I had already scheduled interviews with a number of Philadelphia journalists for a book project. I arrived on the Amtrak in the aftermath of a monumental snowstorm. What I encountered was a warm sense of (to invoke a cliché) cautious optimism.
Bill Marimow, the respected editor who had been fired or demoted twice through years of musical-chairs ownership, was particularly enthusiastic about the structure Lenfest had set up. Though the three properties would be owned by a nonprofit, they would be run as a for-profit “public-benefit corporation,” which meant that they would not be legally required to serve the financial interests of shareholders or investors.
“There’s parity between the mandate to do great journalism and the mandate to have an economically viable business,” Marimow said. “But the priority is no longer maximizing profits. It’s having sufficient profits to keep producing good journalism.”
These days, of course, there’s no guarantee that newspapers will have the resources to cover the communities they serve even without the pressure to turn a profit. Newspaper advertising, both in print and online, plunged from a high of $49.4 billion in 2005 to an estimated $16.5 billion in 2017, according to the Pew Research Center. Full-time newsroom employment fell by nearly half during roughly the same period.
Here and there a few wealthy newspaper owners are trying to figure out ways to revive their struggling businesses. Jeff Bezos’s efforts at The Washington Post are the best-known, but he runs what he has repositioned as a national digital news organization. The economics of large regional papers like the Inquirer are very different — and much more difficult. For every paper like The Boston Globe, where billionaire owner John Henry has attempted to minimize newsroom cuts while figuring out a path to sustainability, there are dozens owned by hedge funds and corporate chains that have plundered their newspapers in order to squeeze out their last remaining profits.
The nonprofit/for-profit hybrid model that Lenfest set up in Philadelphia is not a panacea. Ultimately, the papers still have to break even, an enormous challenge in the current environment. Still, the Philadelphia experiment has brought stable ownership, community-minded oversight and a journalism-first mindset to the Inquirer and its sister properties after years of chaos. That is a commendable legacy — and one worth emulating elsewhere.