With the arrival of the Internet and it’s maze of blogs and other opinionated avenues with which to get information, it seems that print newspapers have been put on life support.
Many print newspapers across the country are struggling to keep up with an outdated business model that no longer seems to work in the 21st century as much of their circulation dwindles as a result of the web.
Granted many newspapers are making the transition to the web, some better than others, but web-based revenue doesn’t make up for the loss of print revenue.
So I have been hearing a lot about what’s a newspaper to do, with some recommending newspapers embrace the endowment model followed by universities. I first came across the idea on Gawker and then again as I read this op-ed in the NYT yesterday.
What an endowment model would do is give newspapers a source of capital with which to provide a permanent (hopefully), source of income. Kind of like how the rich live off of their wealth. Think about it. Let’s say Bill Gates has $60 billion, give or take a couple billion. If the man stopped receiving any income at all and had to live of a return of say 1% a year that would be $600 million a year coming in as interest. Not exactly a frugal lifestyle.
So, how large an endowment would a newspaper need?
According to the op-ed piece, “The news-gathering operations at The New York Times cost a little more than $200 million a year. Assuming some additional outlay for overhead, it would require an endowment of approximately $5 billion (assuming a 5 percent annual payout rate). Newspapers with smaller newsrooms would require smaller endowments.”
This would turn newspapers into non-profits which has many benefits including greater “journalistic independence”. We wouldn’t have to worry about reporters trying to please or at least not offend their advertisers. The newspapers wouldn’t need a bailout, which is ludicrous to begin with. There’s no way a paper could be nationalized without it turning into propaganda. It’d basically instantly lose all credibility.
Because of the non-profit tax laws the papers wouldn’t be allowed to endorse candidates but they could still press against and investigate government activity. Not to mention the benefits of non-profit status such as tax exemption on income and deductions for donators.
So this seems a likely way to go. With the Tribune Company filing for bankruptcy last month it’s only a matter of time before others follow.
As stated in the Times, this non-profit route “would transform newspapers into unshakable fixtures of American life, with greater stability and enhanced independence that would allow them to serve the public good more effectively.”
And that’s good for all pop culture.
News You Can Endow [New York Times]
image: gawker.com
