Not For Profit Newspapers Next?
St. Petersburg (Fla) Times the Model for Saving Printed News
Dec 27, 2008
Reports of newspaper after newspaper laying off staff have become almost daily announcements, followed by mergers or complete closing down because of the diminishing readership and shrinking revenue from advertising.
The St. Petersburg (Fla) Times Model
The Poynter Institute for Media Studies that owns the St. Petersburg (Fla) Times may provide the model in the future for owners who are looking for a way for their newspaper’s survival. The model is a newspaper that would be supported by corporate sponsorships and public-spirited citizens, akin to public broadcasting. Poytner and the Times have provided that model for more than 25 years.
The Non-for-Profit Alternative
Most newspapers that are not showing a profit have shrunk their staffs or the size of print editions to cut costs. Apparently, that is not doing enough for them to survive. It is obvious that other ways must be found or printed newspapers may go the way of the Linotype.
Joe Mathewson, writing in Editor & Publisher, (12/22/2008) has proposed a not-for-profit alternative to closing down the newspapers.
- For a newspaper, like the Chicago Sun Times, for example, which has little or no market value, its parent company could simply donate the paper’s shares to a not-for-profit foundation, or create one. Any value the newspaper had left would become a useful tax deduction if the parent corporation is otherwise profitable.
- If the newspaper is still making money, a not-for-profit could borrow to buy it and then repay the debt from future earnings of the paper, perhaps combined with other revenue.
Organizations Qualification for Non-for-Profit Status
Under section 501 (c) (3) of the Internal Revenue Code, non-for-profit newspapers would qualify for the designation. For example, an existing tax-exempt civic foundation could become the owner of a local newspaper. It would have to include a free on-line version and Web site. If there is not a demand for the printed product, at least the staff would be preserved.
The Poynter Institute model is another alternative because under the Internal Revenue Code, tax exempt organizations are prohibited from trying to influence legislation or supporting candidates for public office, but a for-profit paper like the St. Petersburg Times can still carry out the civic functions of a newspaper while still receiving dividends while owned by a non-profit entity.
Whether or not the non-for-profit plan could work for newspaper is a great unknown. However, as one newspaper after another report financial losses and further staff cuts, it is at least an experiment that might be worth a try.
Source: Editor & Publisher
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