Sure, Newspapers Could Just Die A Painful Death; But Here’s Another Option
If you want to watch news travel fast, make sure it’s about the newspaper industry. Fitch, a credit-rating service, has predicted that some daily newspapers will go out of business as their parent companies default on their debt and are forced to liquidate. But this prediction is extreme: There are interim steps that papers can take to stave off the cash drain.
Even if Fitch is right, what if instead of liquidating the assets, the papers were reclassified and/or contributed to a not-for-profit? Presumably, someone could benefit from the tax write-off. Sam Zell, owner of Tribune, sold Newsday earlier this year; perhaps there was a gain he wants to offset. He could contribute the Baltimore Sun to a newly established not-for-profit. There was a group in Baltimore that wanted to buy the paper when Tribune was originally for sale—that group could serve as management for the paper and oversee the not-for-profit.
While converting to a not-for-profit won’t improve the financials, it would allow the paper to ask for philanthropic support, not unlike public radio or television stations. This isn’t meant to be a solution to the industry woes but instead a thought that came about after reading that McClatchy (NYSE: MNI) was collaborating with the Christian Science Monitor, a not-for-profit, in some of their overseas news bureaus. I hadn’t realized there were any not-for-profit papers. I’m also encouraged by the establishment of ProPublica, a not-for-profit investigative-journalism organization led by former Wall Street Journal managing editor Paul Steiger.
Recently, I had an on-air personality from one of the local PBS radio stations present to my media-management class at Kent State University. Listening to him discuss the support for the station and the support for National Public Radio, I have to believe there’s enough support out there for a newspaper. If the goal is to save some of these daily newspapers, perhaps this idea could save a few.
Lauren Rich Fine is ContentNext’s Research Director.
Photo Credit: iboy_daniel
Related StoriesPosted In: Media & Publishing, Newspapers, lauren rich fine
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Comments (9)
Dec 4, 2008 6:37 PM
Would this imply that at some point, the general public would subsidize newspapers?
Dec 4, 2008 8:20 PM
Newspaper and magazine firms should at least halt the hypocrisy of being publicly traded companies. Go private, re-trench to excel (not just survive) in a digital world and stop believing that re-visiting margins from 20 years ago is just around the corner.
Dec 4, 2008 11:15 PM
The Ultramercial end-to-end solution is a new business model these papers need to consider. It’s tried, tested and true.
Dec 5, 2008 10:12 AM
Linger -
Well said. The business model of the old newspaper organization was premised on a monopoly, and its major costs have been undercut by digital technology. There is no return to the days where newspaper profits provided returns on the level of other publicly traded companies.
Dec 5, 2008 5:20 PM
There IS enough support out there for a newspaper. Management may have run the Rocky Mountain News into the ground, but their daily circulation is still 250,000. Not chump change for a paper that may have to close.
Dec 5, 2008 5:31 PM
There are non-profit models that exist, at least in the magazine world. Consider Mother Jones magazine and its website, http://www.motherjones.com, which are published by the non-profit Foundation for National Progress. Since its founding 1975, Mother Jones has been supported by a mix of donations, subscriptions, and advertising. This model may be the one best suited to support investigative and long-form journalism, which increasingly is no longer the province of commercial, mainstream media.
Dec 5, 2008 6:31 PM
I belive The Poynter Institute, a non-profit, publishes The St. Petersburg Times.
Dec 5, 2008 7:05 PM
I can’t think of a worse thing that taking a newspaper to non-profit status. One of the reasons newspapers are in the trouble they are in is the near-monopoly status most of them enjoyed in their markets over the past few decades. There was no incentive to innovate, no incentive to appeal to newly emerging groups of readers. Today newspapers are in a fiercely competitive situation, with most of the competition coming from the Internet. It is painful, and some newspapers will die. But the necessity to turn a profit and be responsive to readers and owners will provide much-needed incentive to innovate and change.
Dec 9, 2008 12:38 AM
I’ve been blogging about the NYT Company going public to private in some sort of not-for-profit, or what I call, Capitalism 2.O model, for soime time now. If you’d like to follow my thinking on this, and for how long I’ve been blogging about it, go to the blog for readers of the NYT owned property, the IHT, called http://www.ihtreaders.blogspot.com
You’re behind the wave on this one.
Obviously not for profit isn’t a solution to long term problems but what it most certainly is is a device to keep the NYT Company solvent until they can work out what to do. It’s essentially a private bail out. As I’ve blogged, 100 of NY’s great liberal great and good stumping up $10 million each would reduce that $1.2 billion of debt for which the NYT has now had to mortgage its own home to carry on paying.
Why is no one getting how close the NYT is to going bust?
Wake up NYT lovers and read this blog.