Amid all of the print-is-dead triumphalism, Senator Benjamin Cardin of Maryland has taken the very encouraging step of introducing legislation that would allow newspapers to operate as not-for-profits. This would mean that advertising and subscription revenue would be tax-exempt, and one could make tax-deductible donations to newspaper as educational entities. I'm pretty sure this would also mean that any profits that the newspapers might make would need to be re-invested in the newspaper, rather than paid out to shareholders.
As someone who got his his start in media in public radio, I am enthusiastic that this can work. The traditional cash cow of classified advertising, which sustained large newsrooms for so many years is gone. But we still need large newsrooms, and this looks like a realistic way to fund them — and newspapers have NPR and public radio stations as models for how one can fundraise for high-quality reporting as a non-profit entity.
I asked one of my friends, an editor at a large (for-profit) magazine for his thoughts on the issue. He argues persuasively that a non-profit model will actually provide better quality news than for-profit newspapers that are driven ultimately by the bottom line:
I’ve
always believed that news media as a for-profit venture was a flawed
business model. It’s the fiduciary duty of an executive to make the
most money possible for his company’s shareholders. Call it a
Machiavellian instinct, but successful CEOs run a business with
dispassion. They’re swayed by concerns outside profit margins only to
the extent that customers or clients might find fault in their
perceived callousness. That’s why a company will donate $10,000 to a
worthy cause and spend several million trumpeting its good deed.
I’m
not trying to judge them, just provide some context when I say that the
for-profit business model is an anathema to anything requiring the
public trust. Their true objective is not good journalism, per se. It’s
simply the product of customer demand. That’s not to say that
journalists are tainted—many believe they’re doing the public’s
work—but the product will change to meet customer demands. Great
journalism is the result of a commitment to the truth, whether or not
the intended audience wants it.
A not-for-profit business model shows that a news entity is not
restrained by profit motives. It can run stories that companies, that
might have been advertisers under the for-profit model, may not like.
For example, Consumer Reports regularly runs critical stories about
vehicle safety to the chagrin of Detroit’s Big Three. There’s always
risk of a lawsuit, but the editors at CR don’t have to worry about
offending advertisers. Ditto for the Associated Press and the St.
Petersburg Times.
I like the St. Petersburg Times model because it’s run by a university,
where ideas are encouraged to flourish. I see the paper as one giant
academic experiment. Now, more than ever, with the proliferation of bad
information floating on the web, the public needs news sources it can
trust.
Accidental Blogger 
3 responses to “The NPRization of Newspapers (Andrew)”
Interesting post and interesting comments from our anonymous friend, though when I hit the line about the Associated Press and the St. Petersburg Times, I couldn’t help but think that given the continued, corrupt influence of Ron Fournier over the AP’s Washington coverage, it’s hard for me to think of the AP as a shining example of good journalism in the absence of advertising pressures…
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I agree that some corrupting forces will continue to exert their influences on the news, be it wealthy owners, advertizers or even the biases of newsroom honchos themselves. But I think, on the whole, a trend toward making news outlets publicly owned entities, if that comes to pass, will be a good idea.
My local paper, The Houston Chronicle is shrinking, it is clear. The readership is getting older and subscription rates are falling off. Starting in March, on Mondays and Tuesdays, the paper has begun to combine two separate sections, the Business news and the local reports / editorial and opinion pages of the paper into one condensed version. To save paper or to save on reporting? I don’t know. Not a good sign. I hope the newspaper doesn’t go belly up for lack of revenues. Although I read a fair amount of news on the web, I just cannot imagine my morning cup of tea without a paper.
After reading Andrew’s post, I was fantasizing whether the Chronicle can be revitalized by the UT Medical Center, MD Anderson Cancer Center, the Baylor College of Medicine, Rice University and the University of Houston stepping forward and pitching in as joint sponsors of the paper. These institutions are great at fund raising, command the respect of Houstonians and will interfere little in the journalistic output. I doubt it will happen – not unless someone is really creative.
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I really like this idea. Interesting post!
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