Public Interest

Item! The most crucial, distinctive product of the newspaper business is neither news nor paper. And the best way to provide it may not be a business.

Newspaper companies are still making money. But their average profit margin of 17% is down from 26% as recently as 2000--just one data point in the industry's Worst Year Ever: "I think 2006 will turn out to be the first year in which print revenues actually were negative for the year," says analyst Rick Edmonds of the Poynter Institute. In the past year, we've seen the venerable Knight Ridder chain dismantled; an attempted sale of the Tribune Co. languish for lack of attractive offers; and McClatchy Co. unload the Minneapolis Star-Tribune to a no-name private equity firm for 44% of what it paid about eight years ago.

So why should you, an unsentimental consumer slurping text from RSS feeds, care about the demise of the daily rag? Thanks to the Internet, up-to-the-second world and local info has become a commodity, just like tap water. But online media, with its much lower ad revenue and few established subscription fees, doesn't yet support labor-intensive professional news gathering. This is the papers' traditional strength, epitomized by giants such as the recently deceased R.W. Apple, who in his day served as a New York Times bureau chief in Lagos, Nairobi, Saigon, Moscow, London, and Washington: authoritative analysis, in-depth reporting, diverse local coverage, and actual boots on the ground around the world.

Perversely, the market is weakening newspapers' core competency before new media can replace it. So far this decade, the industry has lost about 2,800 full-time editorial jobs, estimate the Poynter Institute and the Project for Excellence in Journalism. Buyout packages target the old-growth trees of the newsroom, the senior editors with experience and irreplaceable institutional memory. Deep reportage dwindles. The Boston Globe just closed its three remaining foreign bureaus. Instead, readers get bids for more luxury ad dollars. Thursday Styles Section, anyone?

"I think that public ownership of newspaper companies is inimical to good journalism," says veteran industry analyst John Morton. Many papers look to a billionaire sugar daddy for bailouts, but as Edmonds points out, "Private ownership is a roll of the dice. Is the person interested in good journalism, or does he want to help friends and punish enemies?"

Here's another option: social enterprise. We journalists love the noble idea of serving the public interest. If that's for real, why not let the public support newspapers?

Take the old Gray Lady. She's no less shining an example of New York's cultural heritage than the Metropolitan Opera. So why shouldn't the Times, like the Met, turn itself over to a philanthropic foundation that could invest in long-term quality over quarterly revenues? Whether the future is digital, dead trees, or a combination, the foundation could protect the Times' highly trained staff, research resources, reportorial traditions, archives, and matchless global brand.

Morton calls this "a wonderful idea that nobody is going to endorse." Yet it's not as crazy as it sounds. When the Los Angeles Times was up for sale last year, billionaire suitor Eli Broad proposed running it philanthropically through his own foundation. Nelson Poynter bequeathed the St. Petersburg Times in 1975 to his nonprofit educational institute; the paper grew to boast the largest circulation in Florida.

Paul C. Tash, CEO of the St. Pete Times, says, "We can trade profits in the short term for market share in the long term. We can try to make our papers as vibrant and as compelling as we can, even as we try our hand at some new things. I know some think this is inevitably a dwindling industry and we should wring as much out of it as we can. I'm much more optimistic."

For my money, the best example of journalism as social enterprise is NPR, which is having a hell of a decade. Gone are the days of full dependence on mingy government stipends. Since CEO Ken Stern came on board (as COO) in 1999, revenues from corporate sponsors have more than doubled, as has weekly listenership. NPR is hiring more reporters, opening new international bureaus, and has helped pioneer podcasting.