By Josalyn Perez
Baltimore Watchdog Staff Writer
The nonprofit business model that the Baltimore Sun will likely adopt over the next few months has been tried in the newspaper industry in the past and comes with its own advantages and disadvantages.
A 2020 report by the Knight Foundation, a national organization that provides financial support for various journalism projects, outlined several nonprofit models that are growing at local newspapers throughout the country.
These include cooperatives in which readers become part owners of the news organization; traditional nonprofits that are exempt from paying taxes on their income as long as they serve a public interest; government-supported operations like the Corporation for Public Broadcasting; and mergers between traditional public broadcast stations and hyperlocal digital upstarts like DCist in Washington.
To some industry analysts, the growing interest in nonprofit journalism offers a possible solution to the problem of local newspapers being purchased by large corporations or hedge fund managers that bleed them dry before eventually closing the news operations.
“All of those models offer me reasons to be hopeful because I think it means that [local news organizations] are not going to get sold to these newspaper chains that are known for cutting cost and not caring about the quality of journalism,” said Magda Konieczna, an associate professor of journalism at Temple University.
The Sun, which has been owned by the Chicago-based Tribune Company for two decades, announced last month that it and the other Maryland newspapers owned by the Baltimore Sun Media Group will be purchased for $65 million by the Sunlight for All Institute, a nonprofit created by local businessman and philanthropist Stewart Bainum.
The purchase was part of a $630 million deal in which the hedge fund manager Alden Global Capital LLC of New York will buy the other newspapers in the Tribune chain, including the Chicago Tribune, the New York Daily News, and other papers.
While the details have not be made public, journalists, business leaders, and local politicians hope that the new nonprofit model will refocus the Sun’s key mission from earning big profits to reinvesting in local journalism with more reporters, editors and photographers.
But the new business model doesn’t mean the newspaper can ignore the need for revenue.
“There is still an expectation that these organizations have a revenue stream, but there is less expectation that you’re going to be making a huge profit returning every quarter,” said Elia Powers, an associate professor of journalism at Towson University and an editor at the Baltimore Watchdog. “It’s about serving the journalism mission rather than the mission of reaping the most profits.”
The nonprofit business model removes the stress of needing to make a profit and allows these organizations to focus on news coverage, analysts said.
“In my mind, the nonprofit model means newsroom leadership will be able to invest in the newsroom more, providing more jobs and better salaries,” said Cody Boteler, a former Baltimore Sun reporter who now works at Towson. “I believe that local news should be controlled locally, not by a corporate entity.”
Philip Meyer, a professor at the University of North Carolina, was quoted in a 2010 study saying that allowing charitable foundations to pay for news is probably no riskier than allowing advertisers to pay.
According to a 2020 study by associate professors of journalism Patrick Ferrucci and Kathleen I. Alaimo of the University of Colorado, four social institutions influence how nonprofit news organizations conduct journalism: advertising, donors, the audience and government.
“Many of the news nonprofits that opened since the early 2000s have prioritized incorporating citizens – or the audience – into news production,” the study said.
A more recent approach has been to get the community involved through social media. Ferrucci and Alaimo said this allows news organizations like the Sun to receive story pitches and photos from the community, which allows them to cover local news.
“The Sun keeps a consistently updated Facebook pages that provides links to stories and opens up a mechanism for discussion through comments,” according to the study.
Konieczna warned that the nonprofit model does not necessarily change the economic pressures.
“It’s not like being a nonprofit solves all the problems because you still need to get money somehow,” Konieczna said. “You’re not maybe giving money to shareholders, but you still need to earn money to do journalism and that can be really challenging.”
Even with these challenges, there is potential for nonprofit news models to help gather more local news coverage.
Dan Shaver, an associate professor at the Media Management & Transformation Center at Jonkoping International Business School in Sweden who did the paper that quoted Meyer, also reported that for-profit news operations are not going away anytime soon.
“Not even the strongest supporters of non-profit media believe they will replace for-profit news organizations,” Shaver wrote in his paper. “But many feel that they have the potential to address local news coverage needs created by shrinking for-profit newsroom resources.”