I Read the News Today, Oh Boy

Posted in: Featured | By: | November 03, 2009

When I heard the announcement about Texas Tribune coming along to add strength to government and political coverage in our state, I was deep into the details of a similar endeavor.  There is one critical difference, however: our new journalism business is designed to make money.  In fact, just before John Thornton of Austin Ventures announced the Tribune, my colleague and former student Paul Adrian, a recent mid-career graduate of Harvard, had been in discussions with Thornton about investing in our company, Press for the People, www.pressforthepeople.com We had tentative meetings scheduled with Thornton but ultimately demurred because we realized we were likely going to be doing little more than providing information to a future competitor.  Thornton too, lost interest in our project.  No need to wonder why.

There is no doubt Thornton’s intentions are honorable.  He is as astute a social observer as he is an investor and understands what happens to a democracy when the media leave the government unwatched.  I disagree, however, with the Tribune’s approach and think the vision of success is, in this one case, naïve on the part of Thornton.  The challenge becomes even more profound because of serious missteps prior to launch.  Nonetheless, Texas, possibly more than any other state, needs reliable journalism coming from it capitol.  The mystery is how that undertaking is to be funded.

Non-profit journalism isn’t a bad idea; it just isn’t the best one.  NPR is the best example of making a non-profit perform at critical levels in journalism.  However, the iconic news broadcast has recently cut several programs and dozens of staffers trying to endure our present economy.  A senior NPR executive recently told me donations from corporations and wealthy individuals have taken a serious downturn and that the news broadcast has begun to rely more and more on the hundreds of millions in the endowment that came from the Kroc Foundation, which was established by the founder of McDonalds.

The climate is not much better in Texas.  Regardless, Thornton’s influence and a personal financial commitment of a million dollars have gotten the Tribune off with a nice cash flourish.  Several estimates have the bank account balance at around $4 million.  A decent portion of this comes from a campaign to solicit $50 donations from readers and individuals interested in improving the state of journalism.  There is also at $250,000 grant from the Knight Foundation.

Thornton’s determination to remain non-profit shows up in the bold numbers of salaries.  Evan Smith, the former editor of Texas Monthly, is being paid $315,000 annually.  (Thornton approached Smith about helping to find an editor for the Tribune and Smith pulled a Dick Cheney and found himself.)  Ross Ramsey, the Tribune’s managing editor, may actually be worth the $165,000 he is being paid since his insightful Texas Weekly brings a base of smart readers to the start up Tribune. Ramsey is also among the best reporters to ever track his boots across the marble rotunda floor. The highest-paid reporter at the Tribune will earn $90,000, according to a detailed report in the Austin Chronicle.

Having once earned $176.34 take home pay every two weeks as a radio journalist, my support for well-paid reporters need not be stated.  However, I’m fairly confident that a significant number of those $50 donors are rethinking their check writing after learning of Smith’s and Ramsey’s compensation packages.  The people most in need of quality reporting out of the legislature are wage-earners like teachers and state employees and they are the type of donors most likely to give up a $50 night out in exchange for better information about their government.  They are probably somewhat disinclined to donate to an executive earning six times their incomes, regardless of how many magazine awards earned by that executive and his team.  Even the Knight Foundation’s board is probably considering a few second thoughts after learning that its quarter million dollar gift to the Tribune did not even cover Smith’s salary.

Thornton has also been more than a bit clunky with his launch of the new news enterprise.  On his blog, Insomniactive www.insomniactive.com the entrepreneur has burned a lot of data and maybe some bridges in descriptions of the sorry state of the newspaper business.  He has criticized the industry’s failure to adapt and its outmoded business model and then, before his disc drive had stopped spinning, he has suggested those same sad operations will jump at the chance to run big stories from the Tribune. Implicit in this thinking, of course, is the notion that Thornton thinks the papers are doing such a poor job they will gratefully publish the work from his people because they are great journalists and like Mighty Mouse have come to save the day.  What inclination does any editor or publisher have to do business with a company that was launched by bashing the very people it wants to consume its product?

Thornton’s take on reporters isn’t much more flattering.  They sound like commodities in his narratives when he describes how many of them are out of work and how easily and affordable they are to hire.  Unfortunately, a few months after he offers his buyer’s market interpretation of worker bees, Thornton goes out and pays top dollar and, either by design or stumble, insults everyone working at other media by indicating there is a reason he is shelling out the long green in a market where he clearly thinks he can spend a lot less.

“You don’t want clowns who can’t get a job working for public media; you want the best you can find,” Thornton told the Austin Chronicle. “Did I ask Evan to take a pay cut? No.”

I’m not going to make an argument there is no need for more and better news coverage of government, politics, and issues.  I was a TV reporter for 20 years at the state capitol and acted as a bureau chief for two Houston stations during that tenure.  Every TV news operation in Houston, Dallas, and Austin maintained news operations full time at the capitol.  Today, there is no TV bureau to cover the legislature.  The state’s two major newspapers, which used to be staffed with more than twenty people between them are down to about a dozen and their work struggles to find placement even on an inside section.  The door to the people’s business is open, the cash register drawer is slung wide and full of folding currency, and there is not a soul to stand in the way of the tempted.

At www.PressforthePeople.com we believe there is still a market for diligently reported and rigorously non-partisan information and that people will pay to receive that quality product.  Evidence of this abounds.  George Friedman’s Stratfor www.stratfor.com of Austin is a fine example.  He has tens of thousands of paid subscribers reading clear-headed political and business analyses from around the globe and provided by his staff and their contacts.  Even Rupert Murdoch, who had considered knocking down the pay wall at the Wall Street Journal after he bought the publication, is glad he hesitated.  His readers pay and consider the product worthy of their investment.  The problem with non-profit news is obvious: donations are temporary; revenue streams have longevity, if a business is well-conceived.  When papers stop giving away local, reliable information for free, subscribers will gladly pay.

Our business plan calls for the establishment of beats on various areas of interest ranging from immigration to education, health care, politics, environment, and any other topic that is of interest to Texans.  A certain amount of information will be available for free but subscribers will be asked to pay for detailed and exclusive reporting on critical issues.  We intend to assign expert journalists to beats where they have contacts and understanding; we will pay them well but also give them ownership in the company, which ought to begin to end the historical whining about being overworked and underpaid, which is often the mantra in newsrooms.  Our products will also include TV news reports that will be syndicated out to affiliates across the state.  This will be a reliable method of driving visitors back to our web site, increasing traffic, ad revenue, and subscriptions.

The greater goal of www.pressforthepeople.com is to engage the reader and viewer beyond the snarky comment at the bottom of a posted story.  We will monitor and facilitate discussions, help conceive and refine reader and viewer ideas, and encourage participation in the political process.  Our purpose is to be a part of facilitating policy change that will be brought about by people reacting to reliable information.  This is elemental to democracy.  We will inform the public and energize its discourse in a manner that helps hold government accountable and shapes the legislation that affects all of our lives.

And we will turn a profit.

2 Comments for this entry

  • bill crawford

    No matter what the business, $300 K + for one salary in a start up with no revenue is way too much. It reminds me of the dot com boom here in Austin. In 1999, I worked for IdeaMarket, a company that was designed to license content and resell it online. We had contracts with the New Yorker and numerous other orgs. Why did the model implode? Two reasons. First, no one wanted to pay for content. Second, the boss sucked up too much of the vc $$.

    I’m afraid that content is going to get cheaper. People like video, not text. And no one needs to pay for good video when millions of people around the world with a Flip camera can shoot, edit and distribute on the scene news footage for free.

    That being said, I work for a book publisher. Go figure!

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