Friday, September 27, 2019

Local ownership, which doesn't require as much profit as private-equity chains, can help small papers stay viable

Ed Miller and Teresa Parker with the first issue of
The Provincetown Independent (Photo by Sophie Ruehr)
James and Deb Fallows have spent the past six years writing stories about small towns all over the U.S. for their "Our Towns" project. More recently, they've been highlighting examples of local newspapers in those towns that are doing well, in hopes of showing other small newspaper owners some strategies that can help them succeed.

"The conventional view of the local-journalism crisis is that running a small-town newspaper just isn’t a viable business anymore—now that internet advertising has drained off revenue, and now that virtual communities and social media have displaced real-world connections and communities, James Fallows writes for The Atlantic.

Though those issues are real, success stories suggest that the ownership structure of local news organizations matters just as much in determining which papers survive and which don't. Specifically, local ownership may help smaller papers survive. "Increasing evidence suggests that the local newspaper business may still be viable, simply as a business. What it can no longer do is provide the super-profit levels that private equity groups expect from their holdings, and that they demand as a condition of even letting the papers exist, Fallows writes. "But the same papers that are doomed under private-equity ownership might have a chance in some different economic structure."

In 2008 the Provinctown Banner was sold to private-equity firm GateHouse Media, now the largest
owner of U.S. newspapers. Since then, the Banner has been subjected to a familiar profit-maximizing model: cutting costs to produce short-term profits, mainly by layoffs, until there's little left of the paper and it closes or declares bankruptcy. The Banner had a staff of 20 when it was sold to GateHouse; earlier this year it had four, Fallows writes.

Provincetown, in Barnstable County
(Wikipedia map)
Ed Miller, who started as an editor at the Banner in 2015, told Fallows that content or usefulness to the readers was incidental to GateHouse: "The fact is, they couldn’t care less what you write," he said. "Their only interest is how much profit you can squeeze out of the operation, so the way they actually undermine the reporting of news is simply by laying off staff. The cuts make the job so overwhelmingly difficult to do that there’s just no possibility that you will get into serious news coverage, or investigating the stories that need to be dug out."

This July, Miller quit, and this month he and his wife Teresa Parker started a new weekly called The Provincetown Independent. The paper covers all the towns in outer Cape Cod, and Miller notes that the communities are home to a lot of people who are interested in the news and able to pay for it. Their business model mixes for-profit and non-profit, Fallows reports.

"The business plan is based on a four-year, hoped-for course to profitability, at which point the paper would have total paid circulation of 6,000 per week, and 19 full-time staffers," Fallows writes. "So far Miller and Parker have raised a little more than half of the business capital they are looking for. The nonprofit operation has raised three times as much as its original target." The money will go to special projects like training young journalists, investigative reporting, and long-term projects on issues the community cares about.

"People are saying we need to come up with a new business model" for small newspapers, Miller told Fallows. "Actually, the old business model for a local newspaper that really does its job can actually work pretty well."

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