Media Nation

By Dan Kennedy • The press, politics, technology, culture and other passions

Tag: Salt Lake Tribune

How the NY Times over-interprets its reporting about billionaire media owners

By

On January 20, 2024

In Media

Jeff Bezos. Photo (cc) 2019 by Daniel Oberhaus.

The New York Times has published a story (free link) that calls into question the rise of billionaires who own news organizations, noting that The Washington Post under Jeff Bezos, the Los Angeles Times under Patrick Soon-Shiong and Time magazine under Marc Benioff are all losing money. True enough. My problem with the story is that reporters Benjamin Mullin and Katie Robertson try too hard to impose an ubertake when in fact there’s important background with each of those examples. Mullin and Robertson write:

All three newsrooms greeted their new owners with cautious optimism that their business acumen and tech know-how would help figure out the perplexing question of how to make money as a digital publication.

But it increasingly appears that the billionaires are struggling just like nearly everyone else. Time, The Washington Post and The Los Angeles Times all lost millions of dollars last year, people with knowledge of the companies’ finances have said, after considerable investment from their owners and intensive efforts to drum up new revenue streams.

The role of wealthy newspaper owners is something of ongoing interest to me. My last book, “The Return of the Moguls” (2018), focused on the Post, The Boston Globe and the Orange County Register in Southern California, owned by a rich Boston-area businessman named Aaron Kushner. At the time the book came out, the Post was flying high, the Globe was muddling along and the Register was failing; it eventually fell into the hands of the slash-and-burn hedge fund Alden Globe Capital. The Post’s and the Globe’s fortunes have since moved in opposite directions.

Here are the particulars that get glossed over in Mullin and Robertson’s attempt to impose an overarching framework:

• Bezos, who bought the Post in 2013, made deep investments in technology and built up the staff. The result was years of growth and profits, which only came sputtering to a halt after Donald Trump left the White House. Former executive editor Marty Baron, in his book “Collision of Power,” suggests that, over time, a disciplined approach to hiring became more lax. In other words, the Post got ahead of itself and is now in the midst of a reset. A new publisher, William Lewis, begins work this month, and we’ll see if he can articulate a strategy that amounts to more than “just like the Times only not as comprehensive.”

• Benioff bought a dog and, predictably, it’s going “woof woof.” Time was the largest of the Big Three newsweeklies, along with Newsweek and U.S. World & News Report; it’s also the only one of the three that still exists in a somewhat recognizable form. Newsweeklies succeeded because, pre-internet, you couldn’t get great national papers like the Times, the Post and The Wall Street Journal delivered to your doorstep. Not only is there no discernible reason for them to exist anymore, but the leading newsweekly these days, at least in terms of cachet, is The Economist.

• Not all billionaire owners are in it for the right reasons, and Soon-Shiong has proven to be an uncertain leader. Does he care about the Los Angeles Times or not? He’s built it up; now he’s tearing it down. He recently pushed out his executive editor, Kevin Merida, the most prominent Black editor in the country, and he’s done some truly awful things such as delivering Tribune Publishing’s papers to Alden Global Capital and more recently selling The San Diego Union-Tribune to Alden.

So what does that tell us about billionaire owners? Not much. As Mullin and Robertson acknowledge, some are doing just fine, including The Boston Globe under John and Linda Henry and The Atlantic under Laurene Powell Jobs. They could have also mentioned the Star Tribune of Minneapolis under Glen Taylor or, for that matter, The New York Times, a publicly traded company that is nevertheless under the tight control of the Sulzberger family. I don’t think the Sulzbergers are billionaires, but they are not poor.

At the moment, it seems that the only two viable models for large regional dailies is individual ownership by wealthy people who are willing to invest in future profitability and nonprofit ownership, either in the form of a nonprofit organization owning a for-profit paper, as with The Philadelphia Inquirer and the Tampa Bay Times, or a paper that goes fully nonprofit, as with The Salt Lake Tribune and The Baltimore Banner. The Banner is a digital startup that nevertheless is attempting to position itself as a comprehensive replacement for The Baltimore Sun. The Sun, in turn, was one of the Tribune papers that Soon-Shiong helped gift-wrap for Alden, and just this past week was sold to right-wing television executive David Smith.

Leave a comment | Read comments

Terry Williams of The Keene Sentinel on journalism in rural communities

By

On September 9, 2022

In Local News

Terry Williams, right, speaks on rural journalism at the Knight Media Forum 2020 in Miami. Photo (cc) 2020 by the Knight Foundation.

The “What Works” podcast is back from its August hiatus. This week, Ellen Clegg and I talk with Terrence Williams, president and COO of The Keene Sentinel in Keene, New Hampshire, one of the oldest newspapers in the country.

Terry and the Sentinel are the creators of the Radically Rural conference, now in its fifth year, which will be held Sept. 21 and 22. The conference looks at issues such as housing, farming, the environment and — most important to us — community journalism.

I’ve got a Quick Take on The Salt Lake Tribune’s new venture, called Mormon Land, an interesting example of how a local news organization can leverage news in its own backyard in order to attract a national audience.

Ellen highlights a podcast called Shevotes, which recounts the battle for suffrage and recounts historic efforts at voter suppression. Award-winning journalists Ellen Goodman and Lynn Sherr cohost, and actress Christine Baranski makes a contribution, too.

You can listen to our conversation here and subscribe through your favorite podcast app.

Exploring the limits of free speech in nonprofit editorial sections

By

On January 29, 2022

In Local News

Photo (cc) 2015 by Edgar Zuniga Jr.

Lately I’ve been trying to figure out the where the line is for free speech in the editorial sections of nonprofit news organizations. I know they can’t endorse political candidates lest they lose their nonprofit status, the result of a law rammed through the Senate by Lyndon Johnson back in the 1950s. And a few people have told me that nonprofits can’t endorse specific legislation, either.

But what else? When Ellen Clegg and I asked Art Cullen, editor of Iowa’s Storm Lake Times, on the “What Works” podcast if he’d considered taking the Times nonprofit, he said he hadn’t because he was afraid he wouldn’t be able to write editorials. Cullen won the Pulitzer Prize for editorial writing in 2017.

Well, here’s a concrete example. The Salt Lake Tribune — the first major daily newspaper in the U.S. to become a nonprofit — recently ran a tough editorial holding state leaders to account for their failures in responding to COVID-19. It began:

That wan fluttering noise you hear coming from the direction of the Capitol building is the sound of the state of Utah waving the white flag of surrender in the battle against the COVID-19 pandemic.

It’s tragic. It’s disgraceful. And there is lots of blame to go around.

Naturally, the editorial led to death threats, as Erik Wemple reports in The Washington Post. Although the threats came after Fox News host Sean Hannity denounced the Tribune for advocating vaccine mandates, what Hannity said, in Wemple’s recounting, wasn’t even remotely a call for violence or threats. It’s just America in 2022.

The death threats notwithstanding, the Tribune’s editorial is an indication that nonprofits can in fact take a strong editorial stand on matters of public interest, including governmental actions, without risking their tax-exempt status. They should be able to endorse candidates and advocate for legislation if they so choose. But at least they are not entirely prohibited from exercising their freedom of speech.

With Chicago Public Media’s acquisition, the Sun-Times will soon go nonprofit

By

On January 20, 2022

In Local News

Photo (cc) 2011 by Seth Anderson

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:

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.

With Alden on the prowl again, it’s time to stop hedge funds from destroying newspapers

By

On December 1, 2021

In Local News

Photo (cc) 2007 by Mike

Previously published at GBH News. It’s rather late in the game to ask whether hedge funds can be stopped from buying up every last one of our local newspapers. After all, about half of us are already stuck with a paper that is owned by, or is in debt to, the likes of Alden Global Capital (Tribune Publishing and MediaNews Group), Apollo Global Management (Gannett) and Chatham Asset Management (McClatchy).

Still, with Alden having now set its sights on Lee Enterprises, a chain that owns 77 daily newspapers in 26 states, we need to take steps aimed at preventing what is already a debacle from devolving into a catastrophe.

So what can be done? Steven Waldman, the co-founder of Report for America, which places young journalists in newsrooms, has some ideas. At the top of his list: redefining antitrust law.

“In general, antitrust law for the past three or four decades has focused on whether mergers would hurt consumers by raising prices or reducing competition,” Waldman wrote recently for the Washington Monthly. “But before that, antitrust regulators looked at mergers more broadly, including whether they would hurt communities. And that’s what needs to happen here.”

Waldman would also provide tax incentives for nonprofit organizations seeking to buy newspapers as well as tax credits to make it easier for news organizations to hire or retain journalists. That latter provision is part of the Build Back Better legislation, whose uncertain fate rests in the hands of Sens. Joe Manchin and Kyrsten Sinema.

“This will strengthen local news organizations of all shapes and sizes, making them less vulnerable to vultures,” Waldman argued. “The legislation could be a powerful antidote to the sickness spreading within local communities.” Trouble is, the tax credits would benefit the Aldens and the Gannetts just as much as they would the independently owned news organizations that are struggling for survival. Still, it seems like a step worth trying.

The problem with hedge funds owning newspapers is that such funds exist solely for the purpose of enriching their investors. Newspapers, of course, aren’t exactly lucrative. But they still have advertising and circulation revenues, even if they are much smaller than they were, say, 20 or 30 years ago. Cut expenses to the bone by laying off reporters and selling real estate, and you can squeeze out profits for the enrichment of the owners.

Alden is notorious for being the most avaricious of the bunch. Which is why shock waves ripped throughout the journalistic community last week when Rick Edmonds of the Poynter Institute reported that Alden — just months after feasting on Tribune’s nine major-market dailies — was making a bid for Lee, whose papers include the St. Louis Post-Dispatch, The Buffalo News and the Arizona Daily Star. (Julie Reynolds, an investigative reporter who has been dogging Alden for years, recently spoke about the hedge fund with Ellen Clegg and me as part of our podcast, “What Works: The Future of Local News,” at Northeastern University.)

Lee’s papers also include the Omaha World-Herald, and therein lies a sad story. The World-Herald was at one time the flagship of hometown boy Warren Buffett’s newspaper chain, which he began assembling in 2012. But despite Buffett’s self-proclaimed love for newspapers, he failed to invest in their future, cutting them repeatedly and eventually selling out to Lee. Now they face the possibility of a much worse fate.

Or not. Several days after Alden offered to buy Lee in a deal valued at $141 million, the Lee board of directors adopted a poison pill provison. As reported by Benjamin Mullin in The Wall Street Journal, Alden — which currently holds about 6% of Lee stock — would be forbidden for the next year from increasing its share above 10%. If nothing else, the move provides some time for other buyers to emerge. Perhaps the chain will be broken up, with some of Lee’s papers being acquired by local owners.

As Waldman suggests, there is nothing inevitable about local news being destroyed at the hands of venture capital. About two and a half years ago, I wrote about The Salt Lake Tribune, acquired from Alden by local interests and converted into a nonprofit news organization. Now, according to Lauren Gustus, the Tribune’s executive editor, the paper is adding staff and resources. “We celebrate 150 years this year and we are healthy,” she wrote in a message to readers recently. “We are sustainable in 2021, and we have no plans to return to a previously precarious position.”

Alden’s acquisition of Tribune Publishing (not The Salt Lake Tribune; I realize there are a lot of Tribunes to keep track of here) was an avoidable tragedy, made possible by a board that placed greed above the public interest. Since closing the deal, the hedge fund has been hacking away at Tribune newspapers that were already much diminished, including the Chicago Tribune, New York’s Daily News and the Hartford Courant.

Yet some good may come out of it, too: Stewart Bainum, a hotel magnate who had competed with Alden for Tribune, is starting a well-funded nonprofit news site, The Baltimore Banner, that will compete with Tribune’s Baltimore Sun. Maybe that will lead to similar efforts in other Tribune cities.

Meanwhile, Lee Enterprises’ newspapers are safe, at least for now. What will happen a year from now is anybody’s guess. But as long as the vulture can be kept outside the cave, there is hope for the millions of readers who depend on a Lee newspaper to stay informed about what’s happening in their community.

In our latest podcast, Penny Abernathy talks about news deserts and what to do about them

By

On November 22, 2021

In Local News

Penelope Muse Abernathy

Penelope “Penny” Muse Abernathy, a visiting professor at Northwestern University’s Medill School of Journalism, arguably launched a movement with her path-breaking research on “news deserts” and the forces undermining community newspapers across the nation.

Abernathy, a former executive with The New York Times and The Wall Street Journal, was also Knight Chair in Journalism and Digital Media Economics at the University of North Carolina from 2008 to 2020. She talks about why this is a pivotal moment for community journalism, about her forthcoming research and about why her journalism students are still bullish on speaking truth to power at the local level.

In Quick Takes, Dan reports that the nonprofit strategy at The Salt Lake City Tribune is actually working out, and Ellen tunes us in to Heartland Signal, a new digital outlet with a Democratic spin that is setting up to cover the midterm congressional elections.

Please give us a listen — and subscribe via Apple Podcasts, Spotify or wherever fine podcasts are available.

The Salt Lake Tribune, now a nonprofit, reports that it’s healthy and growing

By

On November 16, 2021

In Local News

Salt Lake City. Photo (cc) 2011 by Jazz Spain.

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.”

Please become a member of Media Nation for just $5 a month!

Ben Franklin would be horrified at what the Postal Service is doing to newspapers

By

On January 5, 2021

In Local News

Benjamin Franklin, publisher and postmaster general

As if local newspapers didn’t have enough to contend with, they are now being threatened by the Postal Service. According to Jacob Bogage of The Washington Post, newspapers are simply not being delivered in some parts of the country because of the recent mail meltdown. And publishers are facing a rate increase of as much as 9% in 2022, cutting deeply into their already precarious bottom lines.

“These are little, tiny rural communities, and typically papers like mine are the only sources of information about that community,” Brett Wesner, chair of the National Newspaper Association and publisher of 12 papers in Texas, Oklahoma and New Mexico, told Bogage. “Most don’t have digital coverage of any kind. Most don’t have radio stations. We are the source of community information, both in terms of covering community events but also the city council, the school board, the county commission.”

It’s not an exaggeration to say that American newspapers were built on reliable postal service and affordable rates. As the Post notes, the first postmaster general was Benjamin Franklin, who was himself a newspaper publisher. Paul Starr, in his sweeping history of journalism, “The Creation of the Media” (2004), wrote that newspapers were given a boost starting in Colonial times through postal subsidies. By contrast, European governments, more wary of the press, kept postal rates artificially high.

In his book “Democracy without Journalism?” (2019), Victor Pickard put it this way:

Because the postal system served a higher civic purpose as a news and information infrastructure upon which a self-governing populace depended, policymakers determined that the state would directly subsidize the dissemination of newspapers with low postal rates.

That policy, Pickard wrote, was supported by founders such as George Washington and James Madison and prevailed until the “market fundamentalists” of the Reagan era began to argue that the Postal Service should be run like a business and turn a profit. And, of course, that move was hypercharged under President Donald Trump, who appointed an unqualified (at best) postmaster general, Louis DeJoy, who undermined postal operations in what may have been an attempt to suppress mail-in voting and help Trump win re-election.

So why not shift to digital delivery? That option is available to larger daily papers, especially as the steep decline of advertising takes away one of the last remaining reasons for having a print edition. The Salt Lake Tribune, our only nonprofit major metro, is moving from daily to weekly print in order to save money.

But the tiny newspapers, mostly weeklies, to which Brett Wesner refers most likely don’t have that option. Their communities may not have broadband, and the papers themselves may not even have websites. Print is vital for them to be able to serve the public. Unfortunately, it looks like one of Trump’s final legacies will be to make it that much harder for them to survive.

Please consider becoming a paid member of Media Nation for just $5 a month. You’ll receive a weekly newsletter with exclusive content. Click here for details.

Federal bill would ease the way for nonprofit local news

By

On June 11, 2019

In Media

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.

Talk about this post on Facebook.

Can nonprofit ownership be an answer to the crisis facing local newspapers?

By

On May 15, 2019

In Media

Photo (cc) 2004 by Cool Hand Luke.

Previously published at WGBHNews.org.

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.

Hiyo!

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.

Take, for instance, the New Haven Independent, a nonprofit, online-only news service that has received considerable support from the Community Foundation for Greater New Haven since the Independent’s founding in 2005.

“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.

Talk about this post on Facebook.

Powered by WordPress & Theme by Anders Norén