Nonprofit Newspapers: Worth a Try

Jonathan Weber is not a fan of the nonprofit newspaper. Why not? I think it’s a vague sense that being nonprofit is un-American, a bit like bank nationalization:

That newspapers should be run as nonprofit organizations strikes me as a cop-out. We’re only in the early innings of figuring out how new business models might replace the industrial-age structures of traditional newspapers, and we’re already throwing in the towel.

But the non-profit model isn’t a last-resort option; if anything, it’s a first-best solution for anybody who wants to put journalism first and have the business side of the operation serve the editorial side, rather than the other way around.

Weber is right that the quality of foreign news you read is not necessarily directly proportional to the number of full-time foreign reporters that your local newspaper employs. But I think he overstretches here:

What happens when "saving journalism" is no longer a cause of the moment? How can a news organization properly go about its business when it’s constantly on bended knee looking for funders?

The fact is that all of the nonprofit models I’ve seen, including the ones which already exist in the UK and the US, start with a fully-funded endowment. I don’t see the Scott Trust or the Poynter Institute "on bended knee looking for funders", and in fact I’m quite sure that anybody who tried to donate money to the Guardian would be looked at very suspiciously indeed.

Weber has a for-profit news organization; he says that

we are held to the brutal discipline of the market, which is very unpleasant a lot of the time but I think is ultimately a healthy thing. The core problem that a nonprofit newspaper will never be able to solve properly is deciding what is worthy.

Really, that’s not a problem at all. "In a nonprofit," writes Weber, "either the board or the employees decide what is worthy–and why them?"

The answer is that they know best what they’re doing and what they’re trying to achieve. Does Weber really think that People magazine has the best journalism in America?

But then Weber does an astonishing 180, and decides that anything that people really like is not worthy journalism:

Let me give a few examples. Does the nonprofit newspaper cover sports? Why? How about movies? Surely the market is filling the need for sports and movie coverage…

Suppose the nonprofit newspaper limited itself to serious, worthy public-policy matters, with a sober nonpartisan approach-and therefore had the readership that tends to go along with that. Circulation has been falling at newspapers for decades because people find them less useful and necessary. How many copies of the Warren Buffett Times would need to be sold to make that $200 million-a-year newsroom a worthwhile investment? What would happen when the managers went to Warren and said, you know, the numbers aren’t even close to panning out (even nonprofits have to hit their numbers), so we’re going to have to pay attention to Britney–or maybe go online-only. Would the foundation mission allow either?

None of this makes any sense. Is there any conceivable reason why a nonprofit newspaper shouldn’t write about sports or movies or Britney Spears? These are all important parts of the world we live in, and newspaper readers care about them, and newspaper advertisers like to advertise in those sections. There are good reasons for a newspaper to cover "serious, worthy public-policy matters"; there are no good reasons for a newspaper to cover nothing else. If the fluffier sections aren’t profitable, then by all means discard them. But if they’re subsidizing the rest of the paper, then let a thousand glossy Sunday magazines bloom!

But eventually Weber reveals the real reason he’s scared of nonprofits:

If these nonprofits are going to sell ads-that "incremental revenue" is important, after all–isn’t that unfair to the myriad tax-paying online companies that are also trying to sell ads? As an entrepreneur, it’s hard enough to compete without facing subsidized rivals.

I’m sorry, Jonathan, but entrepeneurs have no legal or moral right to have any marketplace to themselves. Commercial radio stations happily compete with NPR; commercial banks happily compete with credit unions; and in general whenever a nonprofit organization starts selling something, the very fabric of capitalism somehow manages to remain untorn.

Weber says that before news organizations decide to go nonprofit, "give the entrepreneurs a chance". But really, that’s not necessary: the entrepeneurs always, by definition, have a chance. They can start up new news organizations wherever and whenever they like. They can buy existing news organizations, much as Sam Zell did with Tribune. (And we saw how that worked out.) Entrepeneurs have never lacked for chances, and they never will. And if someone wants to try some other business model — like an endowed nonprofit — they should be welcomed into the marketplace with just as open arms as any entrepeneur would be.