Reportage
For newspapers to survive, they may have to give up profit
The Salt Lake Tribune is considering a switch to nonprofit status, pending the approval of US tax authorities. The news industry is watching the transformation, which would be one of the most radical shifts for a major American daily.
Against the backdrop of a constitutional crisis that is getting more and more severe, and circumstances that are serious enough to justify a legitimate parallel with the Watergate scandal, the crisis of American journalism seems to have no end in sight.
The press, for which Nixon’s impeachment and resignation was its crowning moment of glory, plays a quasi-constitutional role in the origins of the First Amendment (which guarantees the freedom of expression), and was described by the framers of the US Constitution as an auxiliary mechanism, essential to ensure the balance of political powers in the republic and public scrutiny over the activities of the powerful.
However, in the current context, such Jeffersonian pronouncements on the role of the free press risk becoming little more than anachronisms, of interest to historians alone.
It is perhaps no coincidence that the decline of Western democracies, the advent of “bullshitocracy,” the revival of Flat Eartherism, historical amnesia and the rise of entire political careers built on obfuscation and misinformation are coinciding with the crisis of the press. And it is no coincidence that the physical crisis produced by the spread of digital content and the disappearance of advertising revenue due to the monopoly of digital platforms comes at the same time as Trumpism’s full-on assault against reporters, trying to paint them as “enemies of the people.”
One attempt to find a solution to both problems—the financial solvency of newspapers and the protection of information as a public good—is that put forward by the Salt Lake Tribune, which has announced its intention to reinvent itself as a nonprofit entity.
The transformation of this historic newspaper, with a legacy of 148 years of publishing in the state capital of Utah, is the first attempt for a traditional US daily to abandon the market model altogether and attempt to gain the legal status of a nonprofit organization operating for the “public benefit” (an operation which, however, will require the approval of the US federal tax agency, the IRS).
The idea is, in short, to do an end run around the problem of economic survival and the seemingly impossible task of competing with social media platforms, placing journalistic activities outside the realm of market forces. It implies a revival of the conception, dating back to the country’s founding, of information as a sphere of special public interest.
“The Tribune is a vital community asset and should be owned by the community,” said Paul Huntsman, the wealthy publisher who bought the media outlet in 2016 and who immediately found himself having to deal with the daunting problems affecting every newspaper: the shrinkage in the number of subscriptions and the collapse of advertising revenue.
Last year, the Tribune laid off a third of its staff (the newspaper currently employs 60 journalists, compared to 148 in 2011). Huntsman said he had made this decision after analyzing, together with experts, the best options for keeping the newspaper alive.
“In all honesty,” he emphasized, “I never considered the prospect of closing. That’s not why I bought the newspaper.”
The American tax system allows the possibility of forming not-for-profit associations or organizations, if they have “religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition … or for the prevention of cruelty to children or animals.” The Salt Lake Tribune’s application to be included in this category is expected to be based on the “educational” function of the information it provides.
Other newspapers have experimented with partial nonprofit models—for instance, The Guardian has entrusted the management of its archives to a foundation. In the US, the Tampa Bay Times is partly owned by the Poynter Institute, an organization dedicated to journalistic training and professional education. The Philadelphia Enquirer still operates as a commercial newspaper but is also technically owned by the Lenfest Institute for Journalism, a foundation whose avowed mission is “to develop and support sustainable business models for great local journalism.”
If the IRS approves the move, the Tribune model could be a prime example of radical transformation, which might be taken up by other newspapers as well.
“I have always seen The Salt Lake Tribune as Utah’s institution, much like our libraries, hospitals and the arts and cultural organizations that enrich our lives and reflect our shared civic goals,” Huntsman emphasized in his announcement of the move.
“It is imperative that we manage to survive,” said Jennifer Napier-Pearce, the newspaper’s editor. “The society in which we live would be severely impoverished by our disappearance, and by the disappearance of independent journalism.” The only other newspaper published in Salt Lake City is the Deseret News, owned by the Mormon Church.
If it succeeds, this move would bring the newspaper close to the American model of art and science funding, based on private grants that come largely from nonprofit foundations, sometimes coordinated by public bodies (e.g. the National Endowment for the Arts, the National Institute of Health, etc.). The Tribune might also accept funding for specific positions on its staff for a given period of time, in a similar process to the private endowments (subsidies) for named academic chairs.
The most similar model in current US journalism is probably that of non-commercial radio stations operating through the Corporation for Public Broadcasting, which administers both the (modest) federal grants and private donations.
However, the bulk of the public radio stations’ budget still comes from subscriptions paid by their listeners. The success of the nonprofit model presupposes both the existence of a network of foundations and a widespread culture of direct subscriptions by users.
Thus, there are still many unknowns to be addressed, including the potential conflicts of interest that may arise. For instance, it is the practice of American newspapers’ editorial boards to declare their support for particular political candidates, but the tax rules in force explicitly prohibit political activity by tax-exempt entities (while Huntsman has emphasized that the newspaper’s editorial line will never be “for sale” to potential supporters).
Nonetheless, this is an interesting experiment, in the context of the current market model, which seems to be fundamentally non-functional for newspapers. It points toward a necessary evolution of our current ways of thinking about the issues of publishing, information, and the survival of democracy in the digital age.
Originally published at https://ilmanifesto.it/la-rivoluzione-dei-giornali-e-il-non-profit/ on 2019-06-02