flickr: Hamed Saber
Everyone’s talking about nonprofit newspapers these days, but could they actually work? Penelope Muse Abernathy , the Knight Chair for Journalism and Digital Media Economics at University of North Carolina Chapel Hill, is presenting a paper next week examining four ways the New York Times might be saved. We got our hands on a copy of the paper (you can too) to see what the Grey Lady’s chances of survival are.
Abernathy lays out the following four options:
1. Establishment of an endowment that would provide funds to support the Times news department’s annual $200 million budget.
2. Foundational support for some portion of the Times’ journalistic endeavor â€“ perhaps its foreign or cultural coverage.
3. Purchase of the Times by an educational institution or university.
4. Sale of the Times to an “angel” investor, who would be willing both to adequately compensate the Sulzberger family members for their century-long stewardship and to assume or retire the debt and other liabilities.
Which of these solutions could work? Read on.
1. The endowment, Abernathy calculates, would have to be $5 billion in order to earn back enough money to run the Times. $5 billion. Only six people in the world have a net worth of more than $20 billion (apparently it’s reasonable to assume that nobody would donate more than 25% of their net worth to a newspaper). But why, asks Abernathy, would anyone donate $5 billion to the Times when that person could just buy the whole thing?
2. So why not subsidize the expensive parts of the paper’s coveragelike the foreign desk? This would require a $1 billion endowment or $60 million in grants and donations annually. Abernathy seems to think that this could work but that continually seeking new sources of funding would be a resources drain.
3. If the Times was purchased by a university and run like Harvard Business School Publishing, the paper could still be run as an independent unitbut would still be at risk of losing money and might come under fire from its parent organization to be more profitable, Abernathy suggests. And “Even in the best of economic times, managing and operating one of the nation’s largest daily newspapers is infinitely more complicated than overseeing a periodical and book company (Harvard Business School Publishing) with a fraction of the Times’ revenues.”
4. “Given the management and administrative concerns that a university or institutional purchaser might encounter, would a single investor fare any better?” Abernathy doesn’t actually answer her own question, but points out that both New York City mayor Michael Bloomberg and Mexican telecommunications mogul Carlos Slim Helu could be perfect “angel” investors for the Times. They have the money, the smarts, and the motivation. But how likely is it that someone will really pony up that kind of money to buy a newspaper, even one as venerable as the Times?