Will non-profits save community newspapers?

January 18, 2016
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The news last week that the Philadelphia Inquirer and its sister properties, the Philadelphia Daily News and Philly.com, would in essence become a non-profit set off a national debate as to whether this new corporate structure is a panacea for all that ails the chronically ill newspaper industry.

The transformation was made possible by the paper’s owner, philanthropist and ex-cable TV exec Gerry Lenfest. His largesse, which includes seed funding of $20 million, is to be admired. The Inquirer quotes Lenfest as saying, “Of all the things I’ve done, this is the most important. Because of the journalism.”

How true. With 20 Pulitzers, the Philadelphia Inquirer has long-served as the pine tar that binds us together as Philadelphians. Lenfest’s gift is unique unto itself, a savior’s model, unlike the non-profit/trust models underpinning The Tampa Tribune or the U.K.’s Guardian. In both cases, the papers were intended to serve as cash engines for funding the public good of their parent entities. Lenfest believes that his non-profit will secure the necessary funding to keep the patient alive and breathing long enough to figure out how to monetize new digital channels.

And therein lays the rub. The Inquirer’s new non-profit is hoping foundations and corporations will fork over slugs of money to finance the good works of serious journalism, the value of which is undeniable. But what isn’t so certain is whether those other than advertisers will be willing to subsidize the 20th century manufacturing and distribution technologies of newspaper publishing. The glory of printing economics is scale, and the greater the numbers, the cheaper is production. But when those economics run in reverse, publishers are brutalized twice, once when they lose a reader and again when that loss increases the cost of serving all who remain. The problem with community newspapers rests with the mechanics, not in the ultimate good they do rooting out corruption, embarrassing scoundrels or publishing high school soccer scores.

It’s questionable whether non-profits will invest in 20th Century technology to finance journalism. A better route—for profit or not—is to go completely digital.

The Inquirer might do better to make a bolder move and simply stop the madness, stop the presses, and go wholly digital. That’s what’s behind the $1 billion valuation of other news properties, such as the Huffington Post and the brilliance of Henry Bloget’s Business Insider. Regardless of corporate structure, community newspapers can only survive if freed from Gutenberg’s 15th century economics. Let’s hope they come to terms with that reality soon so that their good work, and the public’s contribution to it, can make the greatest possible impact.

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