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.

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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