So you want to be a publisher?

Jun 1, 2020

Today I engaged in the gazillionth discussion of the week about what it will take to save newspapers. Will a non-profit model work? What about direct government funding, with the attendant strings attached? Are the failures of the industry the fault of the hedge funds or of capitalism run amok or the dedicated political voices causing Americans to distrust the news?

Hosts of public-spirited people are searching for solutions. Just in the last week, I’ve explored tax strategies, payroll loans, grant funding and employee–owned buyouts with someone trying to plug the gaps left by closing newspapers. Add to the list the gripes about venture capital and disgust with entitlements of all sorts.

All of it ends with:

WE NEED A NEW BUSINESS MODEL

This debate has been going on for most of my 40-some year career. Yes, we need a new business model. Since the beginnings of newspaper mergers in the post–war era, the model has been based upon monopoly profits. A local newspaper might not have been the only information outlet in town, but it likely was the only one where a local business could successfully advertise itself. Publishers charged what the market would bear for the advertising and with that money, they paid themselves and their newsrooms.

Then along came Walmart, which greatly reduced advertisers. After that was Amazon, to attack Walmart. And Facebook or Twitter, where a used car dealer might buy an ad for pennies that brings in no customers but makes him feel he is following media trends.

Along this path, manufacturing went to China or India and with it went middle–class incomes. The newspaper owners who raised their families on the income from local newspapers aged out, wore out, gave up and sold their titles to whoever could give them retirement funds: likely a CNHI, a Media News or a GateHouse. Before them, it was Thomson or Hollinger. And always a Gannett, founded by the shrewd New Yorker Frank Gannett who built his empire on formula-run newspapers built from titles snapped up from families exhausted by the changing competition.

Now the companies that bought up these titles have been propelled during the pandemic into shutting them down because they have become unprofitable. Investors have been paid off for their ante, funded by cost-cutting at the newspapers. Not much is left. There is no going concern there to sell to anyone. There is only, sadly, a cohort of now-unemployed journalists who continue to believe in their mission of covering the news. Suddenly, the doors are locked, the pensions are threatened and the future looks bleak.

Because journalists closely follow journalism, you can depend upon a new wave of articles from writers who have no idea how the businesses that employ them actually work. How do we save local journalism, they lament? The capitalists screwed it all up. We need a new business model. We need to go back to local ownership.

If you’re the guy or gal tempted to dive into this murky pool to save a local paper — whether as an owner or the operator for some other owner — I’m writing to you. Having been involved in two locally funded ventures in my career and around scores of smart, talented publishers for the past 30–some years, I have some advice for you.

Stop looking for the magic model. There isn’t one.

Success in the future is going to be a formula of reader-funded revenue (subscriptions, mostly) and advertising sales, both print and digital, just as it is now.

The new element in this mix is going to be hard, enterprising work. If there is a benefactor who will promise to underwrite you for several years, a nonprofit model might fly for a while. But you still have to pay the bills. So …

Prepare to sell. And I don’t mean the business. I mean advertising.

Plan on spending most of your time out in your community looking to help people make deals that your newspaper can promote for them.

There are always ideas in the industry to stimulate your creativity — whether it is a special section on businesses operating during social distancing or a promotion for foreign investors looking to build a new factory.

If there is commerce, there is something to promote, and where there is a need for promotion, there is advertising.

Learn how to help them be successful by using the resources at your newspaper. Maybe it is a direct mail piece sent to your mailing list. Maybe it is a website auction. Maybe it is a good old-fashioned ad campaign. Maybe it is lending their names as sponsors of a cause. Whatever it is, you are not there just to sell advertising. You’re there to help to people do deals.

As NNA guru Robert Williams counsels, no one wants advertising. Everyone wants to sell something. Your job is to help them do it.

Forget about penetrating analyses of school budgets or prize-winning editorials as a way to float your boat — although these are important. Don’t spend hours on the phone or at Starbucks with local gossips, thinking you’re doing your job by being the nerve center of your town.

Your first job is to sell.

That will always be your first job, no matter how much your heart is in the newsroom. No amount of brilliant writing is going to help avoid the reality. You aren’t going to successfully hire someone to do the sales for you while you focus on editorial. Job No. 1 is to keep the doors open, one customer at a time.

Buckets of ink have been spilled about the attractions of a nonprofit model. But being a nonprofit is not creating a new business model. That is a tax strategy, which you frankly don’t need to worry much about if you have no profits. You still have to find ways to pay your staff and your printer (or your web host and designers). You still have to market your product. You still have to carry insurance, pay rent and absorb the normal operating costs of a business. Can being a nonprofit help bring in grant money? Possibly. You still have to sell, even if it is to a grant funder.

The tricky part is that the value that a newspaper offers to its community is the trust put in it by its readers. That does require a solid news operation, honest people and candid commentary. If you’re the new publisher, hire those people, inspire them and don’t let your commercial enterprise deter them from their mission. But if you are tempted to cosset yourself in that operation because it is where your heart is, you’re going to fail.

I have watched a score of successful owners sell their titles to a staffer and morosely then watch the business slowly dig its own grave. The new owner didn’t want to sell.

Sales is hard on the ego. It can be demeaning. It isn’t a natural skill for most people, but even introverts can do it if they believe in their product and their town. It requires an intuitive sense of how to put the pieces together for some enterprise that needs what you have to offer. It needs people who see possibilities and are willing to take risks. It is a different skill set from covering the news, which requires analysis, criticism and skepticism. If you don’t have it, you can learn it from your industry groups, your peers and some good books. Sign up for every Pub Aux Live! that talks about sales and promotions — they are there for you to use.

There are plenty of people to help you, but you need to want to do it.

Yes, we must have a new business model. The new business model is about people. We need a new generation of people who can build trustworthy, news–oriented newspapers and still be on the streets in their communities, large and small, helping other enterprises succeed. The commerce is there — or it will be whenever the nation emerges from the pandemic. But it is no longer on automatic pilot. It has to be relit, turned up and displayed with enthusiasm. The person who succeeds will be blessed by a full and rewarding, if exhausting, career and the knowledge that he or she helped knit together an important part of our democracy.

If the person who is turned on by this challenge is you, the future is at your doorstep.

Tonda Rush is the director of public policy and serves as general counsel to the National Newspaper Association. Email her at tonda@nna.org.