Slouching Toward Nowhere
The stream of bad news for newspapers has been almost constant for months. Yesterday, we heard that the New York Times would be cutting pay across the board (New York Times set to impose 5% pay cut on all staff). Last week, Gannett announced 1 week of paid furloughs (2 for higher paid employees) in Q2 of 2009 (Gannett calls for second-quarter furloughs). This is in addition to a week of furloughs imposed on employees in Q1 (where old newspapers go to die). This is exactly the same as a pay cut except with the added bonus of giving people extra free time to stew about it. Who says big companies don’t care about morale?
But wait! There’s hope! US Senator Benjamin Cardin (D-Maryland) (Cardin’s official website) has introduced the Newspaper Revitalization Act, which would allow newspapers to operate as non-profits – That is, as organizations exempt from taxes on their profits because of a stated dedication to a purpose approved by the government as being beneficial to the greater good, as opposed to their common current status as “failing to make a buck in spite of trying REAL HARD.” Apparently the theory is that letting them keep all of the money they make will help them stay healthy (Don’t ask why that doesn’t apply to the rest of us. I don’t know). In order to justify the non-profit designation, papers would no longer be allowed to endorse political candidates (apparently the Senator thinks we don’t know who the papers favor otherwise).
For some discussion of the bill see
- Editors Give Cardin Nonprofit Newspaper Proposal Mixed Reviews
- Senator’s Solution To Dying Newspapers: Become A Non-Profit
- U.S. bill seeks to rescue faltering newspapers
I haven’t read this bill, so I won’t even go into obvious questions like, if a newspaper changes to non-profit status, who pays back the stock holders for the share value that ceases to exist? And I won’t bother addressing the obvious unconstitutionality of limiting newspaper speech (churches are also unconstitutionally forbidden from endorsing political candidates, though many do anyway).
Instead, I want to point out the three flaws in this plan:
- It won’t work
- It won’t work, and
- It’s been tried. It doesn’t work (at least, not well enough to save an entire industry).
No, I’m not being facetious. Non-profits cover a lot of ground but roughly equate to what we normally think of as charities. How many charities are out there that are not continuously begging for money? Even NPR, a non-profit news organization that recieves government subsidies seems to be constantly running obnoxious fund drives. Touting their own importance and the moral worth of supporting their programs is what charities do. There is a subset of charities that exist solely for the purposes of raising money.
For an interesting education in the ways that charities use and abuse money, check out some of the articles at Charity Navigator.
The reason non-profits hunt for money so obsessively is simple. There are lots of worthy causes but only so many dollars that people have to give away. People will buy almost anything but they tend to be very discriminating about what they will finance without expecting something in return.
Oh, you say newspapers are different because they do give something in return? The trouble there is that people are not willing to buy papers at the price that the papers charge. Calling the price of the paper a donation really won’t change that disconnect, which seems to be one of quality. That is, the quality of the product does not, in most people’s minds, justify the cost.
This is economics 101. When I worked at the newspaper I was continuously amazed at how upper management never seemed to understand it. And now a US senator has also failed to figure it out. Working as non-profits might help a small number of newspapers. It seems likely that the New York Times and the Washington Post could find wealthy patrons willing to keep them in business out of sheer idealism (or more likely the prestige of being the savior of an institution). But most cities in this country have newspapers and it’s highly unlikely that there are as many people who would rather give money to journalism than, say, cancer research. Or AIDS research. Or hospitals. Or homeless veterans. Or … get the idea?
The idea of non-profit news is not new, as demonstrated by this piece from just over 3 years ago: Non-Profit Newspapers? Seems Inevitable or this one from last year Nonprofit journalism on the rise or this one from earlier this year, before the senator’s bill was introduced, A Nonprofit Panacea For Newspapers? or this one Who Would Fund America’s Largest Nonprofit Newspaper?
In a larger sense, reporting the news because it’s worth doing is a noble idea. The trouble is that reporters need to be paid and if Gannett or whoever they work for can’t pay them, they’re going to have to find someone who will. It’s because of that inconvenient eating thing these humans do. Once they have real jobs, if people still want to do the news, that’s wonderful. Having those other jobs will, however, cut down on the time and energy they have available to devote to it.
The driving idea behind the current incarnation of the non-profit newspaper idea, Senator Cardin’s bill, doesn’t seem to be directed at attracting donations or volunteer workers, though. It seems to have the more modest goal of easing the pressure on newspaper bottom lines. At best, this is no more than a stopgap. As noted above, the problem newspapers have is not that their expenses are so high but that the public doesn’t want to pay for their product.
In real life, that means the product needs to change. Admitting that is the first step to recovery.
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