By Joe Smyth
Our little company was one of the pioneers of non-profit ownership of newspapers. Fifty years ago, we made a few decisions that were, in retrospect, pretty unusual.
- To protect their independence, safeguard their mission, and ensure their survival, we gave ownership of our newspapers to a non-profit journalistic trust.
- To extend the First Amendment to the grassroots, we gave our opinion pages to the citizens of our communities.
- To support our communities, we gave a mission of community service to our newspapers and a mission of purposeful neutrality to our newsrooms.
Could newspapers everywhere — non-profit or for profit, print or digital — regain public trust and earn the support of their communities by following the same principles that have guided us: ownership committed to community service, editors who facilitate the community’s civil discussion of public issues instead of dominating it, and newsrooms that report the news with purposeful neutrality?
Let’s delve into each of these three points.
Journalism as a sacred trust
Historically, most American newspapers were owned by families with deep connections to the community they served. For the early generations of those families, journalism was their passion.
My father, Jack Smyth (pronounced like Smith), had that passion. In the late 1940s, he had purchased his hometown newspaper, the four-page Renovo Record in the tiny town of Renovo, Pennsylvania. In 1952, he heard that there was (at that time) one state capital that didn’t have a daily newspaper, so he purchased the weekly Delaware State News in Dover and converted it to a five-day daily.
When Jack started having health problems in 1969, he sold the newspaper to his four children. I was the 26-year-old managing editor and suddenly became the editor and publisher of the lively but still struggling state capital daily.
Soon we all started hearing about a bigger-than-life character by the name of Al Neuharth. As the head of the Gannett company, he seemed intent on purchasing every newspaper he could get his hands on.
As the New York Times described it, “His business model, characterized by stripped-down costs and generous margins, reshaped the industry, tilting the balance between profits and public service and turning Gannett into a darling of Wall Street.”
Many of the family owned newspapers had served their communities well and thrived financially. Perhaps too well. While the founders had been driven by community service journalism, too many in subsequent generations were more interested in money than journalism. Mr. Neuharth would fly in on his corporate jet and buy them out. One by one, these great family newspapers sold out to Gannett or the many Wall Streeters and venture capitalists who followed Gannett’s lead.
It was a fundamental shift in focus from community service to profit margins, and it was a slippery slope. Today, most newspapers are no longer led by journalists, but by highly compensated and highly incentivized financial wizards – by people far more concerned about stock prices, dividends and especially their own outrageous bonuses than the community or its newspaper.
I did not want to see that happen to the Delaware State News. But we did the math. I had three sisters who were not involved in the business. Between the four of us, we eventually had 14 children. There would clearly be too many family members demanding too much money.
My siblings were willing to sell their stock at its appraised value and take a 15-year payout. We changed the corporate name to Independent Newspapers Inc. when the company started to expand beyond Delaware. (The INI abbreviation remained but the name was changed to Independent Newsmedia Inc. USA in 2011.)
We wanted to ensure that the company would remain independent and dedicated to the practice of journalism as a public trust, with a strong commitment to citizen participation, free speech, and independent journalism.
INI publishes two dailies, the Daily Independent in Phoenix and the Delaware State News in Dover, and serves 16 Arizona communities, the entire state of Delaware, seven communities in South Central Florida and Cambridge, Crisfield and Salisbury on Maryland’s Eastern Shore, with digital dailies and a variety of print products of various frequencies.
After years of pursuing this vision, the IRS issued a private ruling in 1991 that allowed me to transfer 100% ownership to a new non-profit journalistic trust, INI Holdings Inc. (My wife and I gifted some stock to the trust; the IRS ruling required the rest of the stock to be purchased from us at the appraised value. We took a 15-year payout and paid capital gains taxes.)
As a result, INI is now a for-profit company that pays taxes the same as any other for-profit. It does not pay dividends to any individuals or groups, however, since it is 100% owned by a non-profit journalistic trust. This means that
• All after-tax profits are reinvested in the company and its mission.
• There are no stockholders who could benefit by selling out.
It is designed to keep our company perpetually independent and undyingly mission-driven.
The five non-profit trustees serve staggered five-year terms, with a new trustee being elected each year. They pledge to uphold the trust’s articles and bylaws, to act as guardians of its purposes, and to perpetuate the tradition of allowing all after-tax profits to be reinvested in pursuit of the operating company’s journalistic mission. Other than receiving a modest honorarium for attending the annual meeting, they pledge to not benefit personally.
With Google, Facebook and Wall Street ownership, newspapers are no longer the financial no-brainers that they once were. So, their corporate owners gut newsroom after newsroom to squeeze out every penny, even while engineering massive mergers that are leaving the industry with only a handful of huge (and often debt-ridden) corporate owners.
Many of those corporate owners are now lobbying Congress to bail them out at taxpayer expense. If they are successful, guess who will benefit the most: the newsrooms or the executives and owners?
There are still a few (mostly smaller) family owned newspapers that are still led by community-oriented journalists. Precious few. Wall Street ownership might be fine for many industries, but clearly not for journalism.
But as dismal as things seem now, is it possible that the trauma the industry is experiencing is a painful but necessary purging of the past, and that brighter days for community journalism could be ahead?
It is true that in recent years some communities have been left with no local journalism at all. But there is now a strong and growing trend toward a revival of community service journalism.
All it takes is a few passionate journalists who get tired of what the giant financial-driven corporations are doing to community journalism. They usually do not have the funds to buy existing legacy newspapers from Wall Street. Instead, they launch an online newspaper, where they can provide digital journalism without the high costs of the printing and delivery of a traditional newspaper product. If the journalism is good enough, people support it with subscriptions or donations.
Or a few journalists band together to create a news site that is devoted entirely to investigative reporting. There are dozens of such sites across the country, and many of them are attracting enough community and foundation support to produce some terrific journalism.
One word of caution is that some non-profit news organizations are funded by political interests that are paying for — and often getting — agenda-driven coverage instead of straight non-partisan journalism.
For many years, the newspaper industry has been far too dependent on advertising. Online shopping has decimated the big chain stores and — even more importantly — the local businesses that have been the primary support of community newspapers.
A pivot already underway has newspapers reducing their dependence on advertising by increasing their revenues from subscriptions, sponsorships, community events, foundations, and individual donors.
The New York Times and Wall Street Journal have proven that some readers are willing to pay for quality journalism. The challenge now is for community newspapers to convince their readers that their local journalism is also worthy of support.
As the non-profit and other digital journalism start-ups are proving, the cost of entry into journalism is a lot less than it was traditionally, thanks to digital delivery.
That may not be good news for Wall Street-owned legacy newspapers, but it is great news for community service journalism and the communities they serve.
Whose opinions really matter?
Most newspapers use their opinion pages to advance the political views of the newspaper’s owners, publishers, or editors. When I first became editor of the Delaware State News, I wrote daily editorials. They were mostly kneejerk opinions since there was little time for research or thoughtful reflection.
When I authored “Newsroom Guidelines for Independent Newspapers” in the 1980s — with input from my teammates — we swore off editorials entirely.
We do not quarrel with the right of other newspapers to use their opinion pages as a platform for their own purposes. But Independent believes our public trust requires that we facilitate community discussion, instead of dominating or stifling it. When we announced this stance, here is how we explained our reasoning:
- We have faith in the public’s ability to eventually make good decisions if we provide them a solid understanding of the issues and a civil platform where they can develop and discuss their opinions.
- When newspapers take editorial stances, the newspaper’s reputation for purposeful neutrality is jeopardized, and its news coverage, however even-handed, becomes suspect.
- Too many citizens have abdicated their public policy decisions to so-called experts, and editorials tend to encourage the trend. We try to involve them in public policy as participants, not just as spectators.
- Government “by the people” is a messy process, but well worth the effort.
Editors who refrain from participating in the debate empower themselves to claim a much more important role: that of facilitator of the community’s discussion of public issues. By not taking sides, the editor is free to make sure that all sides are being heard, and that a civil dialogue is taking place.
All these years later, we are more convinced than ever that our “no editorials” decision was a good one. We instead concentrate on encouraging citizens to participate in their democracy — a much more essential task.
One of our readers recently asked why we print letters to the editor that are critical of the president. The answer, of course: for the same reasons we print letters that praise the president.
We publish a rich variety of pro and con opinions in the form of guest commentaries and letters to the editor. Citizens who are not comfortable with formal writing are encouraged to voice their opinions to be published in popular “Speak Out” columns (by telephone in the early days; by email and social media now).
We purposely gave up our own editorial voices so we could facilitate the voices of the people.
A key to success for all newspapers — print or digital — is to earn the support of the community they serve. That is unfortunately a significant challenge with today’s deeply divided and emotionally charged politics. Regrettably, the media is a big part of the problem.
Far too many citizens get their “news” in all the wrong places.
Most cable news isn’t news but rather partisan propaganda that contributes to America’s great political divide and the demonization of the opposition (both sides).
I used to suggest to friends who watched Fox that they give equal time to CNN, and that friends who watched CNN consider giving equal time to Fox. It was bad advice.
Now I urge them to avoid cable news entirely. With rare exceptions, the cable network anchors and commentators are not journalists. They are entertainers who earn ratings by catering to the political biases — liberal or conservative — of their target audience. The more outrageously they push their opinions and demonize the opposition, the more ratings they get.
Regrettably, it is not just cable news that promotes a political agenda. The New York Times is a great newspaper, with many terrific writers. But the Times has developed a progressive culture that cries out not just from the editorial pages, but from nearly every page from front to back.
Clearly — and not just at the New York Times — there are a lot of people who went into journalism to push a political agenda. That is not how our company views our role.
We ask our journalists to think of themselves as humble representatives of the public. Their reporting should not “take sides” but rather help our readers understand what is happening. They interview the key players on both sides of an issue and leave it to our readers to form their own opinions. Many of our journalists spend their entire careers with us because they are so comfortable with our commitment to straight, balanced and non-partisan reporting.
But many readers are so overwhelmed by agenda-pushing media — on cable news, on the internet, national media, and too often even in their local newspaper — that they suspect all media of fake news, biased reporting and one-sided editing. Sadly, their confusion is understandable.
But people are also starting to realize that much of the “news” — on cable news, in some newspapers, and from the internet — cannot be trusted and is often planted by special interest groups. This realization should trigger a movement toward more trustworthy media.
Untainted journalism can restore public trust
Independent Newsmedia publishes community newspapers in four states — Arizona, Delaware, Florida, and Maryland. They give us the geographic and economic diversity that we felt we would need for long-term stability, so we have no need to expand to additional states.
We will do all we can to prevent news deserts in the states that we already serve, and that will be a big enough assignment. But we will encourage other dedicated journalists to fill those voids in other states, and we are delighted that so many are doing precisely that.
Our ambition is not to accumulate newspapers, but to serve our communities well. We are humbled and gratified that many of our readers recognize and appreciate that we are different. Here are some reader comments, with one from each of our four states.
A reader in Sun City, Arizona, writes:
Some of the things I like best about your paper: pages that say what someone said and then state the facts; truth about local and state news, court rulings, etc.; current events, including programs/classes I might want to attend; last, but not least, my favorite comics. Thanks again for the informative and entertaining Daily Independent.
A subscriber in Dover, Delaware, recently urged others to support the newspaper, stating his reasons better than we could have:
1. In additional to national coverage, the Delaware State News is truly a hometown bulletin board. It focuses on news relevant to local communities, publishes their coming events and often provides event coverage. Reader photos and comments are regularly solicited. There are few, if any, nonprofit or volunteer organizations that have not benefited through partnerships with the paper, its outreach to organizations and individuals, and celebration of their events.
2. It strives for balance. Its mission, stated every day, reflects that. Because it doesn’t have an editorial board that signals management positions, readers are encouraged to state their point of view without fear of censorship. Submissions from all perspectives are published daily.
3. The Delaware State News holds their reporters accountable for what they write. Its reporters, news team and editors are readily available for feedback and follow up. Their contact information is listed every day and …the key to credibility and ethics is keeping their biases out of their work.
Here is one from a reader in Okeechobee, Florida:
We have been so impressed with your newspaper and enjoy reading it both in print and online.
Seldom, nowadays, does one find a paper that does not constantly push a political agenda or that does not get caught up in the contentious debate over state and national issues. We have noticed that your paper does not carry a lot of such stories which come over the big news wires but focuses mostly on local news.
To read and see how much space you give to what is happening on our community, in the schools, and in surrounding communities is refreshing. To rejoice in the success of local people, both young and old, is what we should be doing more and more. Your paper gives us that news!
We have become acquainted with many local citizens who have accomplished amazing things in their lives. We would not know about their stories if it were not for your publication. Thank you for example you set for people all over the nation who love local, uplifting news. We need more of that!
And finally, this one from a reader in Salisbury, Maryland:
I want to applaud you for having the most truthful, balanced and informative news outlet we have. I look forward to your paper every week. It gives a balanced view of local issues and is a great discussion starter. Delmarva is lucky to have the Salisbury Independent. Believe me, I cannot watch the news anymore w/o a spike in blood pressure. Thank you and please keep doing what you do.
We are confident that our company will survive because our readers value what we do and how we do it. They will support us through thick and thin and we will reward them with unfettered journalism and a platform for civil discussions of public issues.