An option for newspapers with red ink all over

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Another model for potential news media ownership is gaining attention in Congress and will be explored at a conference in Minnesota on June 16 that about sums up the state of affairs for American newspapers.

Ted Venetoulis, chief executive of Corridor Media Inc. in the Baltimore and Washington, D.C., area, a for-profit business news publisher, will speak about the need to change federal tax law to allow some newspapers to convert to 501c(3) nonprofit legal status to continue operating.

In a cynical moment while preparing for the Minnesota conference, Venetoulis said recently that the new initiative “would give legal status to what many newspapers have become.”

But there are problems for media in seeking benefits extended from government, he acknowledged in a telephone interview. Nonetheless, a race against time is on all across the nation as both print and broadcast media cut back on reporting staffs, seek bankruptcy protection while reorganizing finances, and seek out new owners and ownership structures.

The Minnesota conference, entitled “New Economic Models for News,” will be held June 16 at the McNamara Alumni Center at the University of Minnesota in Minneapolis. It is sponsored by the Minnesota Journalism Center at the university, and by the Minnesota Newspaper Guild.

Sarah Saubert, the university’s events coordinator, said interested participants in the conference have until the end of normal office hours Tuesday to register. That can be done by email at Saube014@umn.edu or by calling her at 612-626-1723.

Interest in Minnesota is keen because the Star Tribune in Minneapolis is in Chapter 11 bankruptcy. The St. Paul Pioneer Press, while nominally profitable, is part of a larger news organization; its future is never certain should it become expendable with current owners focusing on newspaper holdings in the San Francisco Bay area or elsewhere.

But it isn’t just Minnesota’s big city publications that are under stress. Suburban newspapers and regional area publications have also sought bankruptcies, ceased publishing, consolidated ownerships and scaled back employment. Broadcast outlets are also letting people go, especially from news staffs.

There is more than technology changes impacting media. The recession has clobbered advertising budgets that have paid news gathering expenses under existing media ownership models.

In a comprehensive report on the status of American journalism for the Free Press nonprofit organization, researchers Victor Pickard, Josh Stearns and Craig Aaron use data from the American Society of Newspaper Editors to show what’s happened to newsroom employment.

The ASNE counted 54,809 newsroom employees at American newspapers in 2006, which had held fairly constant from 2002 onwards. It then started counting online journalists as part of the newsroom in 2007, and the number jumped to 57,000.

A year later, with newspapers reeling under lost advertising revenue, total print and online employment fell to 52,600. And now, the ASNE professional trade group reports, only 46,700 people make up the employment base that brings you most of the news.

The report citing the figures, “Saving the News: Toward a National Journalism Strategy,” can be accessed here.

Venetoulis is among media experts who propose nonprofit organization models for future media ownership. Sen. Ben Cardin, D-Md., has introduced legislation that would allow media owners to convert ownership to nonprofit status, and Venetoulis said that bill has had hearings before a committee chaired by Sen. John Kerry, D-Mass.

The Baltimore Sun, in Maryland, and the Boston Globe, in Massachusetts, are among prestigious major newspapers that are “under stress,” Venetoulis said.

Joining him among speakers at the Minnesota conference are Robert Lang, president of the Mannweiler Foundation and developer of the L3C low-profit, limited liability company model; Joel Kramer, found and chief executive of the Minnpost.com alternative media model; and several media people who are involved with employee stock option plan (ESOP) programs as options for either total or partial ownership of news business structures. These latter speakers include Bernie Lunzer, national president of The Newspaper Guild, Jennifer Towery from the Peoria Guild at the Peoria Journal Star in Illinois, David Shribman from the Pittsburgh Post-Gazette, and John Sturm, president of the Newspaper Association of America.

Minnesota actually has tools that equip us better than news-dependent people in most states. As Minnesota 2020 has noted in earlier reports, the Minnesota 308(b) cooperative business model works similar to the L3C model and could work in tandem with any of the alternative models now being explored.

Nonprofit, low profit, cooperatively owned and shared, and community-supported enterprise models may all be necessary tools to keep journalism healthy until the economy turns around. Longer term, these models may be necessary to sustain news gathering and presentation through economic cycles yet to come.

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