Non-Profit Model for Newspapers May Be the Answer

[DeepModem Mom]

Editor&Publisher: Non-Profit Model for Newspapers May Be the Answer
By Joe Mathewson

NEW YORK (December 22, 2008) -- Does anyone who admires newspapers need to be reminded how precipitously advertising revenue, the lifeblood of the business, is shrinking?

Does anyone think this trend is miraculously going to reverse itself?

Does anyone think that cutting staffs and pages will improve newspapers and turn the business around?

But, doesn't anyone see that the new business model is right before our eyes?

The model is public broadcasting -- or, even better, the Poynter Institute for Media Studies, Inc., which owns the St. Petersburg (Fla.) Times. Not-for-profit, tax-exempt. No longer dependent on commercial advertisers. A brave new world!

These not-for-profits would be supported by corporate sponsorships and by contributions from foundations and public-spirited citizens who care about the community and who understand how it would be diminished by the loss of its newspapers. Will it work? Who knows, without trying. But it's worked for Poynter and the Times, for more than 25 years.

The stay-the-course alternative, sadly, is pretty clear. Young people, even journalism students, don't buy newspapers (though they read their content free online). The generation of newspaper buyers is shrinking and fading. And with them goes the advertising.

Before newspaper owners whittle their newsrooms and their product down to nothing, they owe it to themselves, their employees, their still-loyal readers and their communities -- and yes, to their shareholders, whose equity is shrinking -- to try the not-for-profit route.

There are two ways to do it:

1. If a newspaper, like the Chicago Sun-Times -- which has found no buyer -- has little or no market value, its parent company could simply donate the paper's shares to a not-for-profit foundation, or create one, as Nelson Poynter did in his will. Any residual value the newspaper might have would become a useful tax deduction, assuming the parent corporation is otherwise profitable.

2. If the newspaper still has market value, which probably means it's still making money, a not-for-profit organization could borrow to buy it, then repay the debt from the future earnings of the newspaper, probably in combination with other revenues....

***

A not-for-profit newspaper, of course, should have a vital online version, and perhaps the newspaper, like the Web site, should be free. Young people do read free papers. But if, in the long run, there's insufficient demand for the printed product, at least the staff, the news stream and the audience will have been preserved, and an online-only newspaper is far better for a community than none at all. Such a move, of course, would greatly reduce production expenses, enhancing the financial stability of the Web-only "paper.”...

Could the not-for-profit business plan work for a newspaper? Perhaps desperation, though uninvited and unwelcome, will soon help us find out.

(Joe Mathewson is a lecturer at Northwestern University's Medill School of Journalism. He is an attorney, and a former reporter for The Wall Street Journal.)

http://www.editorandpublisher.com/eandp/columns/shoptalk_display.jsp?vnu_content_id=1003924531

[BeFree]

1. Paper problems

The reason papers are already going the no-profit route are many.

In my book the large coverage of the elites and lack of news about common folk is why readers are leaving,

As an activist on several major local issues, I watched the papers coverage closely, (looking for my name, hey, who wouldn't?) anyway I noticed that none of the activists were quoted, or even mentioned, Only names were officials, and often misquoted.

Only when the action was over and about to be settled did the politicians get really involved and the paper went gaga over them. No big deal, but we activists did get the coverage shaft.

And the reporters I met were all rather dickish elites set up high upon their own pedestals. They say they were just reporting, but when pressed they usually had hard opinions against the citizens' victories. Mainly because it was citizens beating down the elites to get to that victory and the reporters didn't much like that; the elites being beat.

I think the editors seek out such personalities as reporters.

Anyway, I used to read daily, but now DU has replaced the newspaper for me. Thanks yall!