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Newspapers as nonprofits: Would it work?
Forum: General Discussion
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John ZhuOffline
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  Posted: Wed Jun 27, 2007 8:51 am
 
Can daily newspapers be reinvented as nonprofit organizations, something akin to NPR or the BBC? What are the challenges? What would be advantages and drawbacks? There are already some examples of such operations, but is it feasible for an entire industry, and can an industry of nonprofit newspapers have the same reach and breadth of coverage as they do now (e.g.: would the small-town dailies cease to exist?)?

Some articles I found on the subject:
http://www.carnegie.org/reporter/11/nonprofjourn/index.html
http://dealscape.thedealblogs.com/2007/03/would_newspaper_industry_make.php
http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_content_id=1001525768

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Douglas E. JessmerOffline
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  Posted: Wed Jun 27, 2007 12:19 pm
 
I may be wrong, but I'm pretty sure public broadcasting, NPR and the BBC have government support. The facilities for American public broadcasters are generally state-owned, and in the case of the Beeb, the government charters the BBC and imposes license fees to keep the networks running. It's like "pay TV."

Don't count on government-supported media to probe into the misdeeds of government, because they won't bite the hands that feed them. Count on an independent press, beholden to no one and guaranteed by the First Amendment, to do it.

The media provide an additional layer of checks and balances in a democratic society, as long as the citizenry stays vigilant (as it should). It's the American way!

So newspapers have to survive and thrive in the marketplace, as they should. Instead of rewarding failure with subsidies, a la Amtrak, why not change the way we do business and strive to succeed?

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Jim McBeeOffline
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  Posted: Wed Jun 27, 2007 1:29 pm
 
Doug, I don't know that going nonprofit would necessitate government intervention. Gov't does provide some, but not all, of NPR's budget -- 15 percent was the figure I read, but I can't verify that. Does St. Petersburg get any gov't money, or is it self-sufficient?

The upside of a nonprofit would be relieving the pressure to skim off 20-30 percent of the revenue. It may very well mean detaching from the short-sighted quarterly and monthly effort to satisfy hungry shareholders and executives with MBOs to fulfill. That industrial model makes sense for a manufacturer or retailer, but makes little sense for a business whose aim is to be an indispensible part of the community.

The downside is you'd have to pry that newspaper out of the hands of a corporation or rich family that probably has other ideas for it. It would also make it more difficult to get capital for big projects designed to spur the company's growth, such as buying a new press.

I don't see where going nonprofit would solve the deeper problem of people turning away from print news, but maybe it could buy a little time.

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John ZhuOffline
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  Posted: Wed Jun 27, 2007 2:12 pm
 
On NPR's web site, it says 1-2 percent of their annual funding comes from federally funded organizations, so it's a very miniscule amount. Besides, even with it getting money from the government, I don't think anyone can't say NPR has a pro-Bush agenda.

Jim McBee wrote::
I don't see where going nonprofit would solve the deeper problem of people turning away from print news, but maybe it could buy a little time.


I think if newspapers can make a nonprofit model like NPR work for them, it WOULD help retain readership. Public radio gets part of its funding from its audience, and it seems like that helps foster a stronger bond with its audience, almost a sense of community ownership. I suppose if you give money to something, you're more likely to pay more attention to it. Also, I think it'd help change the relationship between the paper and the readers from consumers buying a commercial product to more of a case where people of a community contribute to maintain an operation that they recognize as a crucial service to the community.

Also, as Jim mentioned, it'd help to relieve the pressure to turn 20-30 percent profit margins. Newspapers are still raking in cash by the boatload, just not as much as before. The reactionary cuts in staff and budget would only go to hasten the demise of the business by diluting the product. Without the pressure to turn ridiculous profits, a paper can afford to invest more back into its product, which would in turn become more appealing.

One concern I have is whether a local newspaper can get enough funding to do the kind of intensive local coverage it does now. If you look at the public radio model, most local stations have a small staff and produce only a few programs, and they don't do saturated local coverage (they cover the big local/regional stuff, but not your neighborhood bake sale). A big bulk of the content are nationally produced. It's great content, very informative and entertaining (and quite frankly, often more useful than a report from the local park bond committee meeting), but it does run counter to what's supposed to be newspapers' greatest strength right now: their ability to intensely cover local news. Radio can do this because it doesn't try to be the first source of local news. Instead, it picks the best/most important/most interesting and does a really good job of investigating the topic. Would this be a practical route for newspapers to go?

Another concern: Would the newspaper's audience then be limited to the better educated, more affluent portion of the population (as is the case with public radio)? Does that mean interests of the lower class would not be served? Personally, I think NPR does a decent job covering topics that are a concern for the lower class, not just the affluent. But many of its programs do appeal more to a better-educated audience.

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Douglas E. JessmerOffline
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  Posted: Wed Jun 27, 2007 8:56 pm
 
Jim McBee wrote::
Doug, I don't know that going nonprofit would necessitate government intervention. Gov't does provide some, but not all, of NPR's budget -- 15 percent was the figure I read, but I can't verify that. Does St. Petersburg get any gov't money, or is it self-sufficient?

St. Pete was a privately owned, for-profit enterprise, and still is. It's owned by Poynter, which was endowed with the newspaper once Nelson Poynter died (will someone from The Times correct me if I'm wrong? Heck, you're across the county from me, for Pete's sake). The newspaper's profits are intended to help perpetuate the institute, if I remember correctly from my time at Poynter.

Going nonprofit wouldn't necessitate government intervention, you're right. I just wanted to point out that NPR and the BBC aren't good examples because they are government-supported enterprises — they were chartered, equipped or funded by government. There wasn't an investor out there who shelled out the capital and took the risk to start NPR or the Beeb. (Air America, on the other hand, was a risk taken by investors, and because it didn't suit the market, it floundered.)

Jim, you said the upside of going nonprofit would be relieving profit pressures. I think privatizing newspapers would do the same thing. Wall Street wants profits, and if they don't like what they see, The Street wants to chop away. But Carl Icahn's tactics won't work in print journalism, and haven't. Patient, passionate ownership is what newspapers need right now, it seems to me.

EDIT FOR CLARIFICATION: In the last graf, where I mentioned "privatizing newspapers," I really meant private control, not stockholder control. In other words, get the profit-only-and-profit-by-any-means crowd out of the driver's seat. Two classes of stock at publicly traded companies (a la The New York Times) is acceptable, though the Sulzbergers are getting plenty of heat. But maybe what's happening at Tribune Co. is where we should be headed?

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