No guest this week as Ellen and I kick it around on the ‘What Works’ podcast

No guest this week as co-hosts Ellen Clegg and I run down a number of news stories, including a major deal in New Jersey: the nonprofit Corporation for New Jersey Local Media (CNJLM) acquired 14 weekly newspapers serving some 50 municipalities. The papers were owned by the New Jersey Hills Media Group.

The deal is similar to one announced last year when Colorado Community Media sold its 24 weekly and monthly newspapers in a complex deal involving several nonprofit organizations. The difference is that management of the Colorado papers was turned over to The Colorado Sun, a digital start-up that was awarded an ownership share and could eventually become the majority owner. In New Jersey, the sellers, Liz and Steve Parker, will remain in charge.

Ellen unpacks the story behind a glaring omission in the award-winning documentary film, “Storm Lake,” and we both try to grapple with the blockchain and how Web3 might affect local newsrooms.

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

Exploring the limits of free speech in nonprofit editorial sections

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.

Democratic leaders roll the dice with assistance for local news organizations

Sen. Joe Manchin. Photo (cc) 2017 by Third Way Think Tank.

The Local Journalism Sustainability Act (LJSA), which I’ve written about rather obsessively here, is built upon the foundation of a three-legged stool: a tax write-off for individuals of up to $250 for subscription fees or donations to local news organizations; a tax credit for advertisers in local news outlets; and a payroll tax credit for publishers that hire or retain journalists.

Now the payroll credit has been carved out and added to the Build Back Better bill, which has passed the House and now faces uncertain prospects in the Senate. Marc Tracy reports in The New York Times that the provision would add up to nearly $1.7 billion over the next five years for newspapers, digital operations and broadcast operations.

Tracy notes — rather huffily, if I’m reading him accurately — that large newspapers like the Times would be excluded because they employ more than 1,500 in one location, but giant newspaper chains such as Gannett and those owned by Alden Global Capital would stand to benefit. As I’ve said before, I wish there were a way of restricting the benefits to independent owners; still, this strikes me as worth trying.

What I’m more concerned about is the political wisdom of adding just one part of the LJSA to Build Back Better, which — despite the optimism voiced by President Biden and other Democratic leaders — could be doomed given the seemingly endless demands made by Democratic Sens. Joe Manchin and Kyrsten Sinema.

There is at least some bipartisan support for the LJSA. Moreover, the tax write-off for subscriptions and donations strikes me as more interesting and creative than simply handing money to publishers for not laying people off. If Build Back Better passes, it will be with just 50 Democratic votes and Vice President Harris breaking the tie — and at that point it seems likely that the other two legs of the stool would disappear. If Build Back Better goes down to defeat, proponents of the LJSA will have to start from scratch.

Even so, the benefits that would be provided by the payroll tax credit are not insignificant. Art Cullen, editor of Iowa’s Storm Lake Times, tells The New York Times that the credit would mean $200,000 in just the first year for his struggling newspaper. “We’d be walking in tall cotton,” he’s quoted as saying. (Ellen Clegg and I spoke with Cullen recently on our podcast, What Works: The Future of Local News.)

Providing government assistance to journalism is fraught with concerns about the First Amendment and the need for an independent press. Yet journalism has always benefited from government help, starting with postal subsidies in the late 1700s. The LJSA is worth trying. I just hope that Democratic leaders haven’t outsmarted themselves by splitting up a bill that stood a decent chance of passing and grafting it onto a large package that they just can’t seem to get done.

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

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.”

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‘Storm Lake’ from PBS tells the story of a rural newspaper fighting for its life

Dolores Cullen, photographer and feature writer, holds up a copy of The Storm Lake Times

Previously published at GBH News.

Dolores Cullen is scanning through photos she’d taken at a local elementary school where Abby Bean, the reigning Iowa Pork Producers Pork Queen, had enthused over the finer points of hog production. The kids were encouraged to oink. There was a piglet wearing a diaper. It was the sort of event that oozes cute.

But that’s not what was on Cullen’s mind. While driving through Albert City, she was hit with an odor so foul that she couldn’t stop talking about it. “It was so putrid I almost gagged, from hog confinement,” she says. When she commented on the smell during a visit to the post office to deliver newspapers, she was told it was from corn that had been put out to dry.

“No,” she says she responded. “This is not the smell of drying corn. This is hog shit.”

Welcome to The Storm Lake Times, a 21-year-old twice-weekly newspaper with a circulation of about 3,000 that covers Buena Vista County, Iowa. The paper is the subject of a documentary, “Storm Lake,” that will be broadcast on most PBS stations this coming Monday, Nov. 15, at 10 p.m., including GBH-2 in Boston.

The film, by Jerry Risius and Beth Levison, tells the story of a small rural newspaper’s fight for survival at a time when local papers across the country are cutting back and shutting down. At the center of that story are the Cullens, a remarkable family who persevere through calamities such as the rise of agribusiness, which wiped out much of the local advertising that had once sustained the paper; the spreading tentacles of the internet, which grabbed another big chunk; and, finally, the insidious invasion of COVID-19.

The Times was already among our better-known rural newspapers by virtue of a Pulitzer Prize that it won in 2017 for a series of editorials written by Art Cullen, the editor. As the Pulitzer judges put it, the paper “successfully challenged powerful corporate agricultural interests in Iowa.” Cullen’s editorials so enraged those interests that the Iowa Senate refused to approve a resolution of congratulations, a tidbit that did not make it into the film.

Cullen later wrote a book about his life as a small-town newspaperman, but his notoriety appears not to have been of much help to the Times’ bottom line. Indeed, “Storm Lake” is a story of struggle. At one point the publisher, Art’s older brother, John, explains how he spent months listening to readers in order to pare the television listings down from 80 channels to 31 without sparking too much outrage, thus saving about $10,000.

Art Cullen is the narrative center of the film. Rail thin, with a shock of unkempt white hair (less unkempt after he submitted to a haircut administered by Dolores, his wife), a bushy horseshoe mustache and wire-rimmed glasses, we see him interviewing a range of characters, from a farmer talking about how a surplus of rain has stunted the corn crop to then-presidential candidate Elizabeth Warren on stage in front of hundreds during the run-up to the Iowa caucuses. We’re treated to several samples of his lyrical writing as well.

The caucuses provide a welcome break from the monotony of rural life. Democratic candidate Pete Buttigieg drops by, and he’s not allowed to leave until he’s autographed an enormous “Storm Lake Times” sign that adorns the newsroom. Art takes part in an MSNBC panel moderated by Chuck Todd. Art and his son, Tom, report from the scene on caucus night, their disappointment palpable as it becomes clear that problems with the app used to tally the results mean that there would be no results for quite some. The Times’ headline: “Who Won the Caucuses? Not Iowa.”

Tom, Art and John Cullen

“Everybody thinks this is going to kill the Iowa caucuses,” Art says. “It shouldn’t, but it will.” A short time later he adds: “It’s not the process that broke down. It’s the app. It’s kind of too bad that we just can’t be more patient with democracy.”

The COVID-19 pandemic followed the caucuses by just a few weeks, and it nearly put the Times out of business. Advertising was down 50% in March 2020. Art and John muse about walking away rather than piling up more debt, or selling the Times’ building.

But they prevailed. We learn at the end that the paper held a successful GoFundMe campaign, signed up more than 100 new subscribers and unveiled a redesigned website that was attracting 1.2 million page views per month. The paper would survive.

Risius and Levison have provided a fascinating close-up look at the local news crisis, which has claimed some 2,100 U.S. newspapers over the past 15 years. At a moment when corporate chains control thousands of papers, squeezing out profits while cutting back on news coverage, the Cullens stand out as notable — and noble — exceptions.

“The pay is lousy and the hours are terrible,” says Art. “But you can change the world through journalism.”