September 3, 2017

"Fractured Lands," a prodigious New York Times Magazine piece last year on the chaos in the Middle East, was an inadvertent window onto a fractured business model.

It was thus relevant that Executive Editor Dean Baquet and Managing Editor Joseph Kahn prominently referenced the piece Friday and its funding by a nonprofit journalism organization when they announced that Janet Elder, a respected newsroom executive and editor at the paper, would "build an operation" to seek philanthropic funding.

The Times' move is predictable and notable. Bosses there know that despite the startling increase in its paid digital subscribers — it has more than 2 million digital-only subscribers, in addition to 1 million print subscribers — it hasn't come close to making up for the revenue lost from the decline in print advertising and the near-duopoly on digital advertising by Google and Facebook.

Its total revenue is way down from a decade ago even as it still maintains a sophisticated editorial operation of 1,300 people. By comparison, The Washington Post, which is often seen as in a print-digital Premier League with The Times, has about 750. Its market value is just over $3 billion, compared to nearly $500 billion for Facebook.

So, it will formalize the need for new sources of revenue. And while such a search is not new for financially pressed media or start-ups — a lot of media operations, including nonprofits (many of which have failed) have tried — The Times remains a point of reference for many in the media both on the editorial and business sides.

Being so forthright about its search for non-subscriber or non-advertising help is notable, especially with self-sustaining future media business models so very unclear.

This search is important and, as folks at The Times know, not without peril.

Taking money from a group like the Pulitzer Center on Crisis Reporting is one thing. The way Pulitzer operates, there is essentially no doubt about editorial integrity. It keeps its journalism partners separate from its donors.

But taking money directly from donors is inherently troublesome. Even if donors don't make clear their desire for a particular thesis or ideological slant, there are the potentials for self-censorship. Money talks.

ExxonMobil won't want to be ripped in a series on global warming. The family foundation of a rich Apple director probably won't be excited about an investigation into labor practices at its primary Chinese manufacturer. Conversely, outsiders might wonder about education reporting backed by a pro-union zillionaire that underscores problems with charter schools.

Whatever The Times tries to do, others will follow — especially in a universe of many vision-less and scared media executives, many of whom don't know what to do these days beyond cutting editorial spending and uttering banalities about the importance of digital.

So getting it right is important for those citizens who truly care about the role of independent media in a democracy.

So, for example, what does Jon Sawyer, who heads the Pulitzer Center, think about The Times' announcement?

"Our work with The New York Times on 'Fractured Lands' is an excellent example of philanthropy and journalism done right," he said. "The Pulitzer Center played a crucial role, raising the money required for an extraordinary journalism and education project — but doing so in a way that left editorial control entirely in the hands of the Times."

He then pointed to the paper's front-page article last week on Google's apparent influence over editorial decisions at the New America Foundation, an increasingly influential Washington think tank. At least in the short term, it's a public relations disaster for New America.

The story, Sawyer said, "is a stark reminder of how fraught this terrain is."

His operation labors hard to keep editorial and funding realities distinct, finding philanthropic help for great reporting while insisting the editorial independence of the outlets that it assists. "It's in the interest of all — philanthropies, news outlets and the public — to keep these buffers in place."

Should one lose sleep over The Times shilling for donors? Probably not. But should one be as confident about the many other media outlets, especially those local organizations desperate for revenue and not having The Times' history, admirable family owners, ambitions and army of great reporters and editors? No.

Alan Mutter, a former newspaper reporter and current industry analyst based in San Francisco, broaches the potential ambiguity of the undertaking.

"Third-party funding necessarily raises questions of (1) whether a topic would have been covered if the money were not available, and (2), whether the reporting and conclusions of the resulting stories were influenced by the need to please donors, especially if the publisher has a hope of obtaining future funding," he emailed me.

The trickier and subtler issue, he agreed, involves what is not to be covered precisely because scarce editorial resources are potentially diverted to funded projects. Partnerships don't mean you go out and hire new people to do certain reporting. More likely, they mean you shift more people from doing one thing to doing another.

"For example, 'PBS NewsHour' appears to cover poetry and health because nonprofits fund it," Mutter said. "There is nothing wrong with that, but there is not similar intense coverage of sculpture and criminal justice because no constituency supports it.

PBS, The New York Times and some other A-list organizations are mindful of the potential for conflicts, he said. But, unavoidably, any dependence on outside funding — as opposed to consumers paying for your product — leaves journalists open to criticism from either skeptical readers or avowed opponents.

Mutter mixes metaphors in finishing his response: "External funding may be a necessary evil in these troubled economic times, but it is a slippery slope for even the most ethical publishers."

There's a substantial amount of early history in the fitful transition to seeking new resources for quality journalism. Indeed, I was part of a two-and-a-half year experiment, probably forgotten already by many rank and filers at The Times, whereby our nonprofit Chicago News Cooperative produced local content for the Midwest print edition of The Times.

We weren't on The Times' payroll and didn't report to them. But, we produced two pages of content twice a week for a Midwest print edition (all our content, including my column, ultimately went through copy desks in New York for final approval).

Editorially, the experiment was deemed a success early and prompted Times expansion to San Francisco and Texas as the paper found other low-cost partners in those locales to provide more local content than it felt it could afford to do with full-time staffers of its own.

But the after early fundraising success, notably with a $500,000 MacArthur Foundation grant, we stalled and closed shop. The Times couldn't hike a modest monthly contribution. San Francisco went under before we did in Chicago, while the Texas-Times partnership endured a bit longer before its demise.

"I hope it works," says Jim O'Shea, who headed the Chicago effort after leaving the Los Angeles Times, where he'd succeeded Baquet as editor (he also did a report several years ago for the Pulitzer Center on its operations).

"When we had our partnership with the Times and the CNC, The Times affiliation was our biggest asset and our biggest liability," he said. "Being affiliated with the New York Times unquestionably gave us credibility. It was the first time in the newspaper's history that Times editors allowed editors independent of the paper to originate and select stores that ran in its pages."

But the Times payments didn't cover the costs of creating the news stories, and many philanthropic funders questioned why they should contribute money to subsidize a money-making private corporation, he said.

He applauds the Times announcement. "However, I think this is just one more stop-gap effort to solve the problems facing the media. As journalists, we must figure out new sources of revenue to finance quality journalism and we must clearly demonstrate that we have standards that distinguish us from people who just repeat and don't report."

But at least the paper has the distinct advantage of catering to an elite audience in business, culture, politics and international affairs that associates it with quality.

That's no small advantage, and one increasingly not enjoyed by local and regional papers as many take the easy route of monotonous mediocrity that doesn't essentially grab readers by the throat and say, 'You've got to read us.'"

It will be far tougher for them, even in their desperation, to go to outside philanthropies and wealthy individuals and convince them of the societal and financial benefits of supporting them. The New York Times will have a stronger hand to play.

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New York City native, graduate of Collegiate School, Amherst College and Roosevelt University. Married to Cornelia Grumman, dad of Blair and Eliot. National columnist, U.S.…
James Warren

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