Washington Commanders quarterback Carson Wentz. Photo (cc) 2022 by All-Pro Reels.
No sooner had I hit “publish” on Monday’s item about The Washington Post than a rumor started circulating that Amazon founder Jeff Bezos was getting ready to sell. The New York Post claimed that Bezos would unload the Post in order to raise money so that he could buy the Washington Commanders.
The rumor made no sense. Bezos, the fourth-richest person in the world, is worth $120.7 billion, according to Forbes, and could presumably buy the Commanders with change he finds in his pants pocket. (The Commanders are valued at $5.6 billion, according to Statista.) Selling the Post would bring in very little — he paid $250 million for it in 2013, and though the paper enjoyed years of profits and meteoric growth, it’s been losing both circulation and money over the past year. Which is to say that he might not be able to get much more for the Post than he paid for it nearly 10 years ago.
As Chloe Melas reports for CNN, spokespersons for both Bezos and the Post denied the rumor immediately. CNN’s Oliver Darcy, in his media newsletter, notes that the N.Y. Post later toned down its headline.
If Bezos ever gets tired of being a newspaper mogul, I hope he’ll donate the Post to a nonprofit organization, as the late Gerry Lenfest did with The Philadelphia Inquirer. But a week after one of Bezos’ rare visits to the Post, there are no signs of that happening.
There’s been some confusion over Chicago Public Media’s acquisition of the Chicago Sun-Times, a tabloid that is the city’s number-two daily newspaper. For example, The New York Times reported that “the ownership structure would be similar to that of The Philadelphia Inquirer, a big-city paper that the nonprofit Lenfest Institute for Journalism has run since 2016.”
Well, no. The Inquirer is a for-profit newspaper owned by a nonprofit organization. If the Inquirer itself were a nonprofit, it would be barred from endorsing political candidates. In fact, the paper continues to endorse candidates and published an “Endorsement Guide” as recently as last fall.
What’s happening in Chicago is different. The ownership of the Sun-Times will be converted to nonprofit with its own board, according to WBEZ, the broadcast arm of Chicago Public Media. The Sun-Times itself reports that the paper will “convert from for-profit to nonprofit status.” That would make it the second major daily paper to become a nonprofit, following The Salt Lake Tribune. Recently the executive editor of the Tribune, Lauren Gustus, reported that the paper is healthy and growing under nonprofit ownership.
As I mentioned, there is one disadvantage to nonprofit ownership: news organizations can’t endorse candidates or advocate for certain legislative actions without endangering their tax-exempt status. Of course, there are plenty observers who see that as a feature rather than a bug. For instance, David Boardman, chair of the Lenfest Institute, greeted the news that the Sun-Times will no longer be able to endorse with this:
Not making endorsements is a plus. One of the great albatrosses of the newspaper business.
But endorsements can be useful, especially in smaller races to which voters may be paying minimal attention. Besides, it’s an infringement on free speech. Such a rule didn’t even exist until Lyndon Johnson rammed it through the Senate in order to silence political opponents back home in Texas.
In any event, with Alden Global Capital disemboweling the long-dominant Chicago Tribune, the announcement that WBEZ and the Sun-Times will soon be covering the region with a combined newsroom is good news. And it shows that people and institutions are willing to step up when market failure undermines local news coverage.
You sometimes hear that nonprofit status is not a solution to the local news crisis. After all, just because a media outlet is a nonprofit doesn’t mean it’s exempt from having to bring in revenue and balance its books.
True. But nonprofit ownership also means local ownership invested in the community. Which is why the latest news from The Salt Lake Tribune, the largest daily paper in Utah, is so heartening.
According to a recent update from Lauren Gustus, the executive editor, the Tribune is growing. The newsroom, she writes, is 23% larger than it was a year ago, with the paper adding a three-member Innovation Lab reporting team and beefing up its reporting, digital and editing operations. After cutting back to just one print edition each week, it’s adding a second. The Tribune is also taking care of its employees, she says, providing much-needed equipment to its photographers as well as a 401(k) match and parental leave.
“We celebrate 150 years this year and we are healthy,” she writes. “We are sustainable in 2021, and we have no plans to return to a previously precarious position.”
The Tribune was acquired from the hedge fund Alden Global Capital in 2016 by Paul Huntsman, part of a politically connected Utah family. As I wrote for GBH News in 2019, Huntsman, like many civic-minded publishers before him, discovered that owning a newspaper isn’t as easy as he might have imagined. He was forced to cut the staff in order to make ends meet before hitting on the idea of transforming the Tribune into the first large nonprofit newspaper in the country.
Nonprofit ownership makes it easier to raise tax-deductible grant money from foundations, and it transforms the subscription model into a membership model. Done right, the audience feels invested in the news organization in a way that it generally doesn’t with a for-profit newspaper.
One disadvantage is that nonprofit news organizations are constrained from some traditional newspaper functions, including having a robust editorial page that endorses political candidates. On the latest episode of our podcast, “What Works,” Storm Lake Times editor Art Cullen told Ellen Clegg and me that’s why he and his older brother, John, the publisher, have kept their paper for-profit.
What the Cullens have done instead is set up a nonprofit organization called the Western Iowa Journalism Foundation that can receive tax-deductible donations to support the Times and several other papers. It’s a model similar to that used by news outlets as large as The Philadelphia Inquirer and as small as The Colorado Sun and The Provincetown Independent.
The local news crisis will not be solved by a single model, and there’s plenty of room for nonprofits, for-profits and hybrids. What’s taking place in Salt Lake is important, and is sure to be watched by other news executives.
“The Tribune will welcome more journalists in 2022,” writes Gustus, “because you’ve told us many times over that this is what you want and because if we are not holding those in public office to account, there are few others who will.”
Several readers called this Washington Post piece to my attention over the weekend. It’s about a fundraising drive recently held by the Tampa Bay Times to offset some of the advertising revenue it lost during the COVID-19 pandemic.
Post reporter Elahe Izadi observes that the idea isn’t entirely new. The Seattle Times has engaged in community fundraising drives, and The Times-Picayune and The New Orleans Advocate (one entity) received $1 million over the summer from the Ford Foundation. For that matter, The Boston Globe pays for some of its education reporting with a $600,000 grant from the Barr Foundation.
What makes the Tampa Bay project unusual is that the paper asked for people to donate in support of individual journalists, by name. That makes me a little uncomfortable, and I hope the next time they do this they abandon that particular wrinkle.
As you may know, the Tampa Bay Times, a for-profit newspaper, is owned by the Poynter Institute, a nonprofit journalism education institute. Back when Nelson Poynter melded the Times and the institute together, the expectation was that the newspaper — rolling in cash — could use some of its revenues to support the institute.
Needless to say, that stopped a long time ago. The Times has struggled for the past few years, and has cut back its print edition to twice a week. It’s still a great ownership model, though, emulated several years ago when Philadelphia Inquirer owner Gerry Lenfest donated his paper to the nonprofit Philadelphia Foundation. After Lenfest’s death, the organization that was set up to own the Inquirer and make investments in journalism was renamed the Lenfest Institute.
By the way, I really like the front page of today’s Tampa Bay Times. Let’s just hope they’re not fundraising off a commemorative issue later this week. Go Sox!
Philadelphia City Hall. Photo (cc) 2016 by Dan Kennedy.
It’s one thing for the chain-owned Hartford Courant to outsource its printing. It’s quite another for an independent major metro like The Philadelphia Inquirer to do so.
The Inquirer, recently shorn of its online comments, is owned by a well-funded nonprofit organization, the Lenfest Institute, and it continues to be reasonably well-staffed. Nevertheless, Kristen Hare of Poynter Online reports that the Inquirer will sell off its suburban printing plant and outsource its production to a Gannett-owned facility instead.
The print edition of many newspapers has become such a small part of their operations that printing simply isn’t cost-effective unless they’re able to take on outside customers. No doubt they’re celebrating at Gannett, since the Inquirer deal means less time that their presses will be idle. But when the Inquirer’s shutdown takes place later this year, 500 people will lose their jobs.
You can be sure that Boston Globe owners John and Linda Henry are looking at this move closely. The launch of the Globe’s printing plant in Taunton in mid-2017 was plagued with problems, and after they were fixed the Globe found itself with fewer outside printing jobs than it had expected. With digital far outpacing print, at some point it may make sense simply to sell the Taunton plant and print the Globe elsewhere.
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The Philadelphia Inquirer is getting rid of most of its comments. Why?
Commenting on Inquirer.com was long ago hijacked by a small group of trolls who traffic in racism, misogyny, and homophobia. This group comprises a tiny fraction of the Inquirer.com audience. But its impact is disproportionate and enduring.
A few years ago, after a content-management system upgrade, GBH News killed its comment sections. If anyone complained, I’m not aware of it. Every news organization should consider emulating the Inquirer — including The Boston Globe.
A little gallows humor seems like an appropriate way to greet the news that The Salt Lake Tribune — the largest daily newspaper in Utah — will seek permission from the IRS to become a nonprofit entity. So cue the snare drum:
Q: What’s the difference between a for-profit newspaper and a nonprofit newspaper?
A: A nonprofit newspaper might actually be able to figure out a way to make money.
But hold the snark. Because even though nonprofit status would not relieve the Tribune of the obligation to figure out a way to pay for the journalism it provides, this might be the most hopeful step in newspaper ownership since The Philadelphia Inquirer and its sister properties were donated to a nonprofit foundation in 2016.
The Salt Lake plan would actually take the Philadelphia model one giant step further. The Inquirer remains a for-profit paper even though its owner, the Lenfest Institute for Journalism, is a nonprofit organization. What the owners in Salt Lake hope to do is reorganize the Tribune itself as a nonprofit, enabling it to raise money in the form of tax-exempt contributions from large foundations as well as from (to borrow a phrase) readers like you.
“The Tribune is a vital community asset and should be owned by the community,” said publisher Paul Huntsman, the brother of former ambassador and presidential candidate Jon Huntsman.
The slide at daily newspapers everywhere has been precipitous, but it’s been especially acute at the Tribune. The newsroom has plunged from 148 full-time employees in 2011 to about 60 today. (Huntsman bought the paper in 2016 and eliminated more than 30 positions a year ago.) Print circulation, according to the Nieman Lab, fell from 85,000 in 2014 to just 31,000 in 2018.
The situation in Salt Lake City is complicated by the Tribune’s joint operating agreement with a second daily, the Deseret News, which is owned by the Church of Jesus Christ of Latter-day Saints. That agreement expires in a year. So it will take a while for the dust to settle.
Despite the success of our three national papers, The New York Times, The Washington Post, and The Wall Street Journal, in charging for digital subscriptions, the outlook remains dire at the regional level. Although Boston Globe owner John Henry surprised everyone last December when he said his paper had achieved profitability, the Globe’s financial situation is still murky. Elsewhere it’s Armageddon. As The Wall Street Journal put it in a recent examination of local newspapers: “A stark divide has emerged between a handful of national players that have managed to stabilize their businesses and local outlets for which time is running out.”
As the advertising revenues that traditionally subsidized journalism have dwindled, newspapers are looking more and more like what economists refer to as a “public good” — that is, a service that benefits all of us whether we pay for it or not. The fire department is a classic example of a public good because we all need it, yet few of us would pay for it voluntarily. That’s what taxes are for. But what do we do about a newspaper whose exposé of corruption in city hall, for example, benefits “free riders” who don’t pay as well as those who do?
That’s where the nonprofit model comes in. At its best, nonprofit ownership can break the reliance on revenue from advertisers and readers by getting others to pay for it.
“My view is that one of the things that connects people is a common base of information about what’s going on in this place. That it’s actually a very powerful connector,” the foundation’s president and chief executive officer, Will Ginsberg, said in an interview for my 2013 book “The Wired City.” “And it’s therefore a very powerful ingredient in creating a sense of community.”
From the moment that the internet began undermining the economics of journalism, the paramount question for newspapers has been: Who will pay? If The Salt Lake Tribune is successful in winning IRS approval, we’ll have a chance to see if civic-minded foundation leaders and philanthropists might be one answer. It’s already working at smaller projects such as the New Haven Independent and at public broadcasting operations. It’s worth finding out if it might work for large regional newspapers as well.
For local and regional news organizations, nothing is more expensive — or more important — than investigative journalism aimed at holding government and other large institutions to account. Despite the economic challenges that continue to shrink the newspaper business, The Boston Globe continues to provide a steady stream of such stories. And over the past few days, the paper demonstrated the results of two innovative ways to fund such reporting.
First, on Saturday, the Globe published a major update on how Catholic bishops have failed in their response to the sexual-abuse crisis. The story, which appeared in print on Sunday, was reported and written by a team of journalists from the Globe and The Philadelphia Inquirer, with funding from the Lenfest Institute for Journalism. The institute, a nonprofit organization, owns the Inquirer and two sister media properties, the result of a gift from the late Gerry Lenfest in 2016. (I wrote about Lenfest’s legacy for the Globe after his death in August.) Here is how the Globe describes the partnership:
Boston and Philadelphia have been ground zero for the Catholic clergy sex abuse scandal — both cities have endured years of church investigations, allegations, prosecutions, and lasting scars. Now, amid a rising tide of revelations about misconduct by US bishops, the Inquirer and Globe pooled their resources for a deeper look at the crisis. Reporters from the two newsrooms visited nine states, conducted scores of interviews, and reviewed thousands of pages of court and church records to produce this report. Funding for the effort came from the Lenfest Institute for Journalism.
Then, today, the Globe published a story by Jana Winter on attempts by hackers to penetrate voting systems across the United States. Fortunately, her reporting shows that officials are well aware of those attempts and that they appear to be on top of it. Equally interesting, though, is that Winter is the Globe’s Spotlight Fellow — a program funded by Participant Media, which produced the movie “Spotlight.” The fellowship, according to the online description, provides “awards up to $100,000 for one or more individuals or teams of journalists to work on in-depth research and reporting projects.”
As if to underscore the need for alternative funding for accountability journalism, the Globe unveiled a shrunken business section on Sunday, moving innovation columnist Scott Kirsner to Monday.
Quick note about my weekly @bostonglobe column, “Innovation Economy”: after more than a decade of running on Sunday, it’s moving (back) to Monday. Not my decision but I’m psyched to keep it going. It originally launched in Feb 2000 on Mondays.
Kirsner’s column was usually the main event in the Sunday business section. Given that it will continue, this isn’t too much of a loss. But it does show that the Globe’s finances remain precarious, as publisher John Henry admitted when I interviewed him during the summer for WGBH News:
The Globe cannot ever seem to meet budgets — on either the revenue side or the expense side and I am not going to continue that. This has always been about sustainability rather than sizable, endless, annual losses. That is frustrating and due to a combination of mismanagement and a tough industry.
In such an economic environment, it’s essential that the Globe find new ways to pay for what really matters.
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.
If newspapers are going to survive and thrive, then various types of nonprofit/for-profit partnerships will almost certainly be part of the mix.
At the extreme end is the Philadelphia Inquirer, which, along with its sister paper, the Daily News, and their joint website, Philly.com, were donated earlier this year to the nonprofit Philadelphia Foundation. The media properties still need to find a way to break even, but it does save them from the pressure of cutting their way to profits in order to satisfy a corporate owner.
A more modest step was announced in today’s Boston Globe. Zoë Madonna, a young prize-winning critic, will be paid through a nonprofit grant to write about classical music for the next 10 months while Globe critic Jeremy Eichler is on leave at Harvard. The money will come from the Rubin Institute for Music Criticism, the San Francisco Conservatory of Music, and the Ann and Gordon Getty Foundation.
According to a press release from the Rubin Institute, which awarded her its 2014 prize in music criticism, the benefactors “will consider an ongoing strategy to support this endeavor on a national scale” once Madonna’s stint at the Globe has been completed. Globe editor Brian McGrory is quoted as saying:
We could not be more delighted to participate in this novel experiment with such worthy partners. We are excited about the benefit to our industry, to some of the great cultural institutions of Boston, and most especially to our readership, which will very much appreciate the proven talents of this young critic.
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