June 17, 2016

In a week when Pew Research and the Reuters Institute dropped massive reports on media, it was easy to miss an insightful paper from the Knight Foundation on owner Gerry Lenfest’s gift of the Philadelphia newspapers to a newly-formed nonprofit.

The findings are well-summarized in this Nieman Lab post. Also author Tim Griggs expands on some of the questions I and others raised covering the deal when it was announced in January.

But there is fresh detail in the paper that you may want to sample. Some questions and answers:

Why a report now when the structure is still being set up?

Knight’s Jon Sotsky, director of strategy and assessment, told me, “We wanted to lay out the right structure for thinking about it. There are not many experiments of this scope. As with any experiment, you want to document the structure before you start getting results and assessing them.”

What is new and noteworthy in how the new nonprofit institute and and the papers are set up?

There are many differences with past efforts (say the Poynter/Tampa Bay Times model). Two in particular broaden the available options.

Philadelphia Media Network has been reincorporated as a public benefit corporation “a designation allowed in some states that gives its leadership a wider berth to consider not just its fiduciary responsibilities but also mission and public-interest concerns.”

Also, the new Institute for Journalism in New Media is affiliated with, but at arms length from, the Philadelphia Community Foundation. Knight and others hope that more community foundations with a wide mandate to spend on improving their home cities will consider bolstering local journalism on various platforms.

Who is running the institute, how much money will it have and what will it do?

That is all to be determined. Griggs said that he understands that an executive director will be appointed within weeks. Lenfest donated $20 million to get the institute started, and more is forthcoming. He has approached other friends in the city’s philanthropic community and some are beginning to come onboard.

“It is not like they have a specific goal they must hit,” Griggs told me, “but I think $100 million is in reach. That would allow them to go after some BHAGs (Big Hairy Audacious Goals).”

Any hidden pitfalls?

Griggs, a consultant fresh from two years as publisher of Texas Tribune, shrewdly identifies the potential for what he calls “undue influence.” However well-intended, grants from the Institute to support a particular journalism project may advance a pet agenda. Avoiding real conflicts of interest or even the appearance of one could be an issue. Editors at PMN will need to learn how to say yes, no, or change- that-a-little, as ideas are being floated.

A good model, free of such problems, predates the institute but was funded by $1 million from Lenfest. A class at Drexel University developed an app aimed at connecting young people to civic issues through news alerts and personalization.

How is all this going to save the Philadelphia papers and their digital sites?

Clearly it is no revenue panacea. However the arrangement should provide stability after an especially volatile succession of short-term owners. And it can be an occasion for a fresh start on digital products and strategies — a casualty in Philly to date after too many changes of direction by the many ownership groups.

Will the new structure — or a variant — catch on in other cities?

Of course that will depend on results. The legal barriers to a direct conversion of a newspaper to a non-profit remain formidable — let alone trying to break apart a chain or deal fairly with shareholders of a publicly traded company. But the possibility is there. The Fairbanks Daily Miner and a sister Alaska daily were sold last December to a family foundation created by its former owners.

Griggs’ paper concludes:

Of course, every market won’t have a wealthy media owner donating the company and a small fortune to endow local journalism experimentation. But aspects of the Philly approach…will certainly have broader relevance and the opportunity to learn.

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Rick Edmonds is media business analyst for the Poynter Institute where he has done research and writing for the last fifteen years. His commentary on…
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