In the early days of the Bolshevik revolution, a question arose of whether suspended press freedoms should be restored. “It is as private property that we must examine the question of the press,” argued a Leninist delegate, saying that the return of confiscated printing equipment and paper would be “an inadmissible surrender to the will of capital.” Then Lenin himself stood and stated that “we Bolsheviki have always said that when we reached a position of power we would close the bourgeois press. He who now talks about the ‘freedom of the press’ goes backward, and halts our headlong course.”
Today our media institutions aren’t being suppressed from without; they are collapsing from within. Yet the vitality of the press once again boils down to a matter of economic independence and strength. Beset with declining circulation and advertising revenues, newspapers and magazines are struggling to find their footing in the new digital landscape where, we are told, information wants to be both free in price and free of control. Those may be contradictory states.
Though they perform what many people consider to be a public service, our great organs of reporting have always been moneymaking companies. The ability to make vigorous profits via mass sales of advertising and circulation has been the first and last source of their independence from government control and other forms of pressure. If news reporting can no longer earn its own keep economically, how durable is this public service?
No less an institution than the Columbia School of Journalism issued a report in 2009 calling into question the future of reporting based on the for-profit model. The Reconstruction of American Journalism noted that shining a bright light on the activities of powerful figures and institutions is one of the most significant purposes of an independent press. In a note published with the report, though, then-dean Nicholas Lemann suggested that the Internet “has brought the days when privately owned newspapers could be the main bearers of this reporting function to an end.”
The report called for, among other things, the introduction of a system of government subsidies to news organizations. It was a startling recommendation in and of itself, but even more so because one of the authors, Leonard Downie, had long taken a radical stand for press independence from government. As executive editor of the Washington Post, he had declared he would refrain even from voting in elections, lest he lose his detachment. Now, Downie was proposing that critical reporting on government and similar institutions should be subsidized by—the government.
Somewhat more promisingly, the Columbia report also called for exploring legislation and regulatory changes to make it easier to operate news organizations as nonprofits, or to create hybrids between limited liability companies and charities. With newspapers’ business model in shambles and government assistance a frightening alternative, is philanthropy the answer?
To the rescue?
There are, and have been for decades, some important nonprofit institutions in the newspaper world. For instance, the most famous of our news wires, the Associated Press. Originally organized in the mid-nineteenth century, the AP now has something like 1,400 newspaper members, including the greatest names in for-profit journalism. It employs more than 2,000 editors and journalists, who are fiercely competitive, including against the association’s own members, and who have racked up an enviable record of Pulitzers and other prizes. The AP aggressively defends its own copyrights.
A few distinguished publications are also seated within not-for-profit structures like educational institutions. When I worked for Alabama’s Anniston Star in the late 1960s, I remember sitting in the paneled study of its publisher, H. Brandt Ayers, one of the heroic southern newspapermen who stood with the civil rights movement, nursing a bourbon and listening to him extol the virtues of family ownership. It is hard to imagine a more idealistic steward of such a trust. Yet when the change of generations came, the Ayers family situated the paper within a journalism school. Likewise, the Tampa Bay Times is controlled by the Poynter Institute, a journalism training center founded by the proprietary family.
The Day of New London, Connecticut, is issued by a for-profit publishing company, but 96 percent of the shares in that enterprise are owned by a trust which has a dual mandate to operate the Day and support a charity established by the paper’s late proprietor. “This arrangement,” the Day says, “ensures that the newspaper will remain independent and locally owned and that profits from the newspaper will be distributed to nonprofit organizations within the Day’s primary circulation area.”
When I called Gary Farrugia, the newspaper’s publisher who is also CEO of the trust, he dismissed concerns that being seated within a not-for-profit might diminish entrepreneurial spirit. He says his executives “dive for every penny,” compete ferociously, and get paid in accordance with their success. The paper, being itself technically for-profit, is unrestricted in its ability to endorse political candidates and advocate for or against legislation.
Farrugia came to the Day long after it was set up in its current structure and arrived from a for-profit newspaper, the Philadelphia Inquirer. He stops short of saying that nonprofit newspapering is the wave of the future. But he does say that it “liberates you to take chances.”
Profit as the armor of the press baron
Many other publications have been supported by philanthropy over the years. The American Spectator and the Washington Monthly are two of many not-for-profit political magazines. The nonprofit ProPublica has set a high standard for online, liberal, investigative reporting (see page 20). Bill Keller, former editor of the New York Times, now leads a nonprofit journalism venture focused on the U.S. criminal justice system.
While I admire all of these journalists and institutions (and write a monthly column for the American Spectator), I am a skeptic of the idea that not-for-profit journalism and philanthropically supported publications are the answer to the industry’s woes. This strikes me as chimerical, and disconnected from the history of our trade and the institutions it built.
One way to think about this problem is to reflect on what newspaperdom was like in the days when it was expanding. Philanthropy played little, if any, role in underwriting the free press, which was operated in a spirit very different from the refined world of nonprofit institutions. Who, after all, are the great builders of newspaperdom? McCormick, Murdoch, the Ochses and the Sulzbergers, Marshall Field, Hearst, Luce, Pulitzer, Dana, Scripps, Bennett, Howard, Cowles, Graham. In all cases these proprietors sought wide popularity and gloried in their profits, and for good reason: Earned profit was the armor of the press.
Who can imagine any of these piratical—in the best sense of the word—press barons structuring their businesses in a way that prevented them from pocketing their profits and butting heads with politicians? Why would it make any more sense to structure a newspaper as a not-for-profit corporation than it would to structure a blast-furnace or an airline or a chip maker as a public charity? No doubt there are a few great industrial companies that are owned by charities (Hershey’s chocolate comes to mind). But they weren’t owned by charities in their years of expansion.
My own sense of this situation isn’t original. As early as the 1920s, none other than President Calvin Coolidge dismissed concerns that the press was controlled by “men of wealth” and might support “the private interests of those who own the papers.” He declared that “there is little cause for the fear that our journalism, merely because it is prosperous, is likely to betray us.” He argued that “a press which maintains an intimate touch with the business currents of the nation, is likely to be more reliable than it would be if it were a stranger to these influences.” This is the context in which he famously declared: “After all, the chief business of the American people is business.”
More recently, one of the greatest editors of my generation, Jack Fuller of the Chicago Tribune, in his classic book News Values, warned that “the future of the newspaper, as vital as it is to the future of society, cannot be allowed to depend on charity.” Its future “is most secure if the decisions concerning it make financial sense…. Colonel McCormick was right. The first objective of a newspaper is to make a profit.”
Media competition
It’s not that I haven’t explored the nonprofit approach myself. In the 1990s, I established a public charity to raise money to provide grants to journalists of all backgrounds working on Jewish stories. At the time, I was editor of the Forward, a nationally circulated weekly aimed at Jewish readers. My little charity was designed to direct money to journalists working a beat that wasn’t, it seemed, large enough to sustain a for-profit effort. It raised and distributed to reporters several hundred thousand dollars.
There were rewarding moments. And no doubt similar satisfactions occur at other charities designed to foster journalistic work on particular subjects—religion, health care, free markets, whatever. My own experience, though, led me to doubt that grantmaking could become a fundamental solution to the difficulties of publications with small audiences or declining revenues. Indeed I came to the conclusion that philanthropic efforts could actually damage for-profit newspapering, though I blame the newspapers as much as the foundations.
The problem arose with the advent of the modern op-ed page. The idea of opening up a page for opinion opposite the editorial page was originally launched in the 1920s by Pulitzer’s New York World. Newspaper columnists and opinion writers became huge circulation-drivers. Their pictures were plastered on delivery trucks. Spencer Tracy and Katharine Hepburn played the archetypes in the popular film Woman of the Year.
The modern op-ed page, introduced by the New York Times in 1970, flung open the door to opinion journalism not just to newspaper staff but to public intellectuals and academics ensconced at nonprofit think tanks and colleges. Over time, this migration of press stars from inside the journalistic tent to nonprofit institutions undermined the business model of journalism.
I felt this when I was editing the New York Sun, a newspaper I launched in 2002, in partnership with managing editor Ira Stoll and a group of private investors. We aimed to, among other things, seize the local New York City beat from the New York Times, and provide a principled counterpoint to its left-leaning editorial stance. One of our keenest frustrations was with well-meaning not-for-profits employing some of the best columnists in the business and incenting them to publish in as many of the papers in town as they could. So it was harder to exploit them for competitive purposes. In the circulation war, they were, in effect, hors de combat.
When I was unable to raise additional capital to cover operating losses, we ceased printing. One of the ideas pressed on me at the time was that we transfer the publication to a not-for-profit institution. But I had no enthusiasm for this strategy, and I eventually purchased the Sun’s copyrights and trademarks, and operate it as a web publication today. This experience caused me to see the proliferation of nonprofit information sources as something that undermines the viability of commercial journalism.
I’m not suggesting that news organizations be protected from the threat of philanthropy. That would be akin to, as Frederic Bastiat famously satirized, a “candlemakers’ petition” to blot out the sun in order to subsidize those who sold wax and wicks. But the experience contains a lesson for anyone who believes that the competitive and dynamic nature of the news business will be unaffected by dependency on charitable or, heaven help us, government funding. (Is it a coincidence that commercial radio stations providing local news reporting and classical music died off when NPR arrived with its mix of charitable and government funding?)
On the road to elsewhere?
The dispersal of the punditry, the shift of reading to the Internet—these kinds of developments are not going to reverse. So it is all the more urgent for news organizations to find a for-profit model that holds up in the digital age. Can philanthropies help in that transition? Probably. But on the margin. By far the best result will still be the emergence of a business structure that allows reporting organizations to pay their own bills, hire good people, and retain their economic independence and self-reliance.
From the Bolshevik revolution to the golden age of newspapers, the lesson of history is that self-supporting profitability provides both the entrepreneurial force and the absolute autonomy that make a powerful and independent press possible. Philanthropists who want to keep journalism vigorous might therefore want to spend less energy setting up ersatz newspapers and more time building up the profitability of our marketplaces, and protecting the right to private property—which is what the press ultimately is.
When the whole history of the press is written, the greatest bastion of its freedom may well be seen to be the 30 percent profit margin. Lenin, whatever else can be said about him, knew his enemy.
