In search of the next generation of local media owners
By Lauren Harris
Though a deepening economic crisis continues to plague the local news landscape in the United States, the NewStart initiative has set out to ensure that one aspect is not overlooked: there are some profitable newspapers in the country whose owners are looking to sell.
The NewStart local news ownership initiative—a year-long fellowship program out of West Virginia University—aims to connect people interested in newspaper ownership with long-time owners that are looking for buyers. On the heels of a decade that has seen widespread attrition in local newsrooms and a pandemic that has hobbled the profession’s financial structures even more severely, the NewStart program believes there is still room to capitalize on the resources of long-standing community newspapers—and to make sure sure they're safely in the hands of owners who care about journalism.
I talked to Jim Iovino, the program’s director, about the unique market for small rural papers, the future of news ownership, and what it takes to buy a newsroom.
CJR: Where did the NewStart program come from?
Jim Iovino: At WVU, we were hearing from people—who own newspapers—that they were concerned about the future, because they're still profitable papers. A lot of owners were coming to the realization that they didn't have a succession plan in place. They were coming up to retirement age, and they had two options: to sell to a corporate chain somewhere or to close down the paper. So that's where the idea sparked: what if we could find and train the next generation of media entrepreneurs?
CJR: What allows these papers to remain profitable? How have they avoided some of the challenges that have hit so many local newsrooms and even many national outlets?
Iovino: There are still six or seven thousand weekly papers across the country. These are small, really local. Typically, circulation is under ten-thousand—the majority are anywhere from a thousand to five thousand. Unless you're really into a certain area of the country, you have not even heard of these papers. They're not going to be on Twitter a lot, and if you're not seeing them in your feed, you don't know they’re out there.
A lot of these places are so small that they haven't seen the influx of other online-only startups, or blogs, or anything along those lines that would eat into their core business.
CJR: They're still the only place to get the information they provide?
Iovino: Exactly. In a lot of these cases people are still okay with getting that information in print. Broadband is not very good in some of these areas.
The other aspect is that local advertisers in these markets still rely on these papers to get the word out to people in their community—they still have a good relationship. The mom and pop shops—they're not going to Facebook to post ads, they're not going to Google and buying ads. They're still advertising with the local newspaper. So these publications have been isolated from that digital ad revenue exodus. They’ve been able to hold on to the traditional business model for a lot longer.
But it’s probably inevitable that the challenges are going to come to those smaller towns eventually. That's where we're coming in—trying to provide the business side of things. If you're profitable now, now's the time to invest some of those profits back into the business, and to make sure that you can be sustainable for the long haul.
CJR: So who’s interested in owning a newspaper these days?
Iovino: This past June, we had our first cohort start. We specifically chose to broaden our cohort across the country. Not every area is the same—what works in the state of West Virginia may not work somewhere else. We tried to get a range of people who have different backgrounds, different goals, different focuses, different skill sets.
First, you have current journalists who want to become entrepreneurs. Then, you have journalists who have been laid off and want to own their own destiny. Next, there are people without the journalism experience—people on the business side who realize that media publications are a lifeblood of communities. I know that it's important, so how can I do something about this? Last, there are the current students, entrepreneurs who know that they want to start their own thing—they have an idea in their head. Maybe it's a niche product, or they know a community that really needs a media outlet in some way, shape, or form.
CJR: You’re in your first year of the program. How have things shifted and changed because of the pandemic?
Iovino: This program was always supposed to be an online program. You can take it from anywhere in the country. It has been a challenge right now, for those who want to purchase a paper—it's very hard to determine the price point for any of these publications. You just don't know what the economy is going to be like, not only now, but six months from now.
CJR: What are you purchasing, when you purchase a local newspaper in 2020?
Iovino: For any of these deals, you could be purchasing the name, the brand, the subscriber lists. In some cases, there are also properties involved: you could be purchasing the actual newsroom, or whatever else that the owner has associated with that publication. Very rarely anymore do you see someplace that actually has its own printing press. But purchasing something that already exists—that user base and that branding that an existing paper has in a community—is very, very valuable. If you go the startup route, it's going to take you several years to accumulate the amount of subscribers that an existing long-term publication already has.
CJR: Right now, a lot of people are talking about community-engaged journalism. The business models are failing. We're also realizing ways in which traditional journalistic models are falling short. We have this opportunity to do two things at once: to reimagine the business model and to reimagine a publication’s relationship to its community. Are you having those kinds of conversations with students?
Iovino: The students right now are just finishing up an audience development and audience engagement course. And that's really focused on—if you have an audience right now, you know, are you reaching everyone in your community? Or are there sections of your community that you're missing out on? And how do you develop a relationship with them?
CJR: What are your goals this first year?
Iovino: We would love for everyone in this first year to come out of this with something in place for them to purchase or take over. It's looking pretty good for that so far, even with all the economic turmoil and everything that's going on.
We need to find people to run these publications, and no matter what form they are going forward, to run them as community publications, and not something that's part of a big corporation. That was our initial goal, and that's still a major focus for us. And we would love it if everyone started thinking about these types of issues. If someone replicates this program at another university that's great—the more the merrier.
CJR: Purchasing a newsroom requires financial resources. How is that a potential limiting factor for who is able to participate in this program?
They're not coming in with piles of cash. Within West Virginia, we do have some partners who we're working with to help them obtain funds, such as Mountain State Capitol. But there are tons of funding opportunities out there to start small businesses. You just have to know where to look for it, and how to find it. And that's where we can help.
The types of papers that we're looking at right now, especially in the rural weekly realm—you can purchase one of these for as much as or for less than it costs to buy a house. It's really a buyer’s market right now. Owners are very willing to make deals. I wouldn't consider finances a big limitation on anyone who's thinking about this; there are many creative ways to go about it.
CJR: What makes a good newspaper owner? What are you looking for in your fellows?
Iovino: You need to be able to realize that in this industry, change is going to happen. No matter what you start out with, don't be dead set on that being the end product. You need to know how to do the journalism, but you also need a little bit of a business sense or surround yourself with people on that side. And you have to really love the small town and want to be part of the community, because it's not going to work another way.
The Journalism Crisis Project aims to train our focus on the present crisis, tallying lost jobs and outlets and fostering a conversation about what comes next. We hope you’ll join us (click to subscribe).
EXPLORE THE TOW CENTER’S COVID-19 CUTBACK TRACKER: Over the past six months, researchers at the Tow Center have collected reports of a wide range of cutbacks amid the pandemic. Now there’s an interactive map and searchable database. You can find it here.
CONTRIBUTE TO OUR DATABASE: If you’re aware of a newsroom experiencing layoffs, cutbacks, furloughs, print reductions, or any fundamental change as a result of covid-19, let us know by submitting information here. (Personal information will be kept secure by the Tow Center and will not be shared.)
Below, more on recent media trends and changes in newsrooms across the world:
- LOCAL OWNERS KEEP SMALL PAPER AFLOAT IN ARKANSAS: A few weeks ago, The Arkansas Democrat-Gazette reported the story of two Arkansas who men bought their local paper, the Helena World, after it was shut down in 2019 by owner GateHouse Media. Under its new ownership, the paper is now a weekly. The World—which did receive some funding from the Paycheck Protection Program—has some four hundred subscribers, and the owners hope to reach sales of a thousand copies a week. "This has been the funnest job I've ever had," owner Andrew Bagley told the Democrat-Gazette. "It's not lucrative, but it's a blast."
- STUDY LINKS LOCAL NEWS AND VOTER PARTICIPATION: A recent report by the UK government found a correlation between local newspaper circulation and voter turnout, Press Gazette reported. As local newspaper coverage erodes, so does voter participation. In a September newsletter, I noted that similar studies in the US have also found links between the decline of local newspapers and the decline of voter participation, in addition to increased government salaries, higher taxes, more misinformation, and more partisan voting.
- ADVERTISERS SEE VALUE IN HYPER-LOCAL: Patch, a local news platform, has recorded a growing interest from advertisers in reaching hyper-local audiences, Digiday reported last week. As COVID-19 spreads through communities in different ways and local leaders, public health officials release unique guidance for each community, and polling requirements differ from state to state—particularly amid a pandemic—advertisers are taking note of the increased attention to hyper-local news. In September, Patch recorded a record month in local sales. “That’s due in large part to national brands wanting to take advantage of the trust that local publishers have built within these communities,” Kayleigh Barber writes.
- US HOUSE CONCLUDES TECH ANTITRUST INVESTIGATION: For CJR, Mathew Ingram summarized the conclusion of a fifteen-month investigation by the House Subcommittee on Antitrust into monopolistic practices at Facebook, Google, Amazon, and Apple. The report recommends strengthening antitrust laws and assuming future acquisitions to be anti-competitive, Ingram writes. “The report has been described as bipartisan, but while it may have started out that way, it ended with only Democratic signatures on the document, and not one but two alternative documents issued by dissenting Republican members of Congress,” he adds. All four tech giants publicly criticized the report’s conclusions. Axios recapped the response.
- NEWS CORP BACKS OFF BIG TECH: News Corp. CEO Robert Thomson recently published a statement praising Google’s billion dollars in support for news publishers, Axios reported. “News Corp. has for years been the driving force behind much of the regulatory scrutiny of Big Tech and its impact on the publishing industry,” Sara Fischer writes. “Now it's becoming a beneficiary of the massive pockets of several of the largest tech companies.” Fischer outlines the company’s partnerships with tech companies like Facebook and Apple News, suggesting that News Corp. may be changing its tune.
- PROPUBLICA THROWS MORE SUPPORT BEHIND LOCAL REPORTING: ProPublica has scaled up its support for local investigative journalism by launching new regional reporting hubs, supplying more reporters to some of its existing units, and ramping up grant funding to provide more fellowships for localized investigations.
- LA TIMES RECKONS WITH ITS PAST: For NiemanReports, Sewell Chan wrote about the Los Angeles Times’ recent decision to publish its “reckoning with racism,” a project attempting to chronicle and come to terms with some of the paper’s failures in hiring, listening to, and representing the people of color in its community. “[N]ewspapers are actors in their communities, not merely disinterested observers,” Chan writes. “The toughest work is ahead of us — reorienting ourselves around new audiences even as we push forward a digital transformation, in an environment of scarce resources.” (Elsewhere, for NiemanLab, Mark Coddington and Seth Lewis wrote about two emerging approaches to fixing the crisis in trust: one more traditional, the other focused on community relationship-building).
- OUTLIER MEDIA WILL EXAMINE ACCOUNTABILITY JOURNALISM: Five years ago, Detroit’s Outlier Media launched a publication aimed at serving low-income readers and readers of color. “Too often, legacy news organizations write only about – but not for – these communities and focus instead on an ideal reader that already has the information and resources they need,” Sarah Alvarez writes. Last week, the publication announced intentions to broaden their scope, using a Democracy Fund grant to research accountability reporting to identify the elements that make it most effective. The announcement says that Outlier will continue to maintain its SMS-based information services.
- JOURNALISM TRENDS: For the Reuters Institute, Rasmus Kleis Nielsen wrote about his observations about news consumption amid a pandemic: that there is a minority group of news lovers who believe in the mission and function of journalism, that local news business models will only get more complicated in the coming months and years, and that many people will never pay for journalism. And for the Reynolds Journalism Institute, Yvonne Leow argued that local news needs a funding pipeline.
- MORE LAYOFFS, CLOSURES, SALES: CBC announced plans to lay off dozens of staffers across Canada, with most of the cuts happening in Toronto, The National Post reported last week. Emerson Collective has severed ties with Pop-up Magazine productions, which owns California Sunday Magazine and Pop-Up Magazine, The New York Times reported—at least eleven staffers have lost their jobs and CalSunday has suspended publication. The Philadelphia Inquirer has announced that it will sell its printing facility, eliminating five hundred jobs at the plant.
JOURNALISM JOBS AND OPPORTUNITIES: MediaGazer has been maintaining a list of media companies that are currently hiring. You can find it here. The Deez Links newsletter, in partnership with Study Hall, offers media classifieds for both job seekers and job providers. The Ida B. Wells Society announced that its micro-loan program for journalists would no longer require recipients to repay their loans—you can apply here and donate here. The Successful Pitches database offers resources for freelancers. The International Journalists Network lists international job opportunities alongside opportunities for funding and further education. And The Lenfest Institute has begun the Lenfest News Philanthropy Network, which offers training and support for news publishers of many sizes and business models.