Bylines - Sally Duros

Chicago news hounds have put enough skin in the game

Originally published in Huffington -Post
Show us the money.

“Us” being the new newsrooms.

The whole world has weighed in on solutions: Combine online with newsprint, news blogs with legacy investigative reporters, news aggregation with editorial curation, then crowd-fund, throw in some Google analytics, and subscription and accessibility fan clubs.

I’m not making this stuff up. To make your head spin do a Google or Twitter search on future of news or follow my Twitter stream @saduros.

Newspapers are meeting “secretly” and Google, Yahoo and other Web whizzes are conjuring new delivery systems.

I’ve talked at length with Tom Stites, who has worked at the Sun-Times, the Tribune and the New York Times. He has some great ideas for the future of journalism as a co-op that he’s laid out at the Banyan Project.

But as he says:

“The revenue model for making money from online journalism is a Rubik’s Cube that somebody’s got to crack the code on.”
It’s going to happen so let’s be ready.

Ideas float about like so many soap bubbles. It’s time to stick pins in a few and see which ones don’t pop.

There’s been little talk about the “m” word. The real dirty little secret that it takes time (and money) to report and write news.

Finally the respected Jon Margolis, formerly of the Tribune, weighed in gently May 12 on the “m” word and how it relates to professional journalists vs. citizen journalists.

“That doesn’t mean there’s no place for the devoted, or even obsessed, advocate. But let’s save a place at the press table for the professional journalists, careerist though they may be (and those citizens are not? Gimme a break). Not the worst trait, careerism. Wanting to get ahead by doing the job right helps one…do the job right.
“And it is a job. Jobs in our society do and should come with paychecks, bringing us back to our basic questions: How big should the paychecks be? Who or what will finance them?”

As I write, Senate Bill 0239 creating L3Cs (a low-profit limited liability company that can accept grants) is awaiting Gov. Quinn’s signature. Upon its signing, any social entrepreneur will be able to create an L3C in Illinois.
It’s way past time to stop quacking and launch some new newsrooms for Chicago.

Let’s get everybody who has a stake in Chicago’s news world into a room to advocate and put to laptop their brightest ideas. Then let’s launch a competition to seed the most promising among them for start-up or, if they are already going, sustainable growth.

Let’s create an L3C seed fund for new-style newsrooms. And maybe we’ll find a few hardy news-web entrepreneurs who want to go the L3C route, too.

Come on Chicago. Let’s be bold. We gave the United States its first African American president. Why stop there? Paradigms are made to be shattered.

When I say “Let’s” and “We,” who do I mean? I mean Chicago’s philanthropic community, like the Chicago Community Trust, the John D. and Catherine T. MacArthur Foundation and the McCormick Foundation. I mean family foundations who care. In the L3C, they take on the greatest risk that they will not receive a financial return. Also in the mix should be local businesses that would find an audience for their advertisements on these news vehicles — they represent the second tier of investment.

But I’m betting the seed fund will get a return, maybe some slow money, but money nonetheless. I’m betting the dozens of local entrepreneurs who have so much skin in the game won’t let anybody down.

Let’s build something new that works.

I say this because I have heard enough and seen enough dimness in the news business to last two careers.

Will the light bulbs over the heads of editorial types ever light? Do they really need to be told why their newspapers are sinking faster than slabs of concrete?

On May 21, yet another group of veteran journalists debated the future of news at the IFC Media Luncheon at the Newberry Library. A smart group of good people including my former boss, Don Hayner from the Sun-Times and Carl Bernstein, yes, he of toppling Richard Nixon fame. The end result? Poetic, eloquent mumblings about what used to be and little understanding of future direction, except for this nugget of wisdom that has been thrown at me twice: duck and cover if you are a journalist over the age of 35.

I asked the panel a question. Are there lessons to be learned from the way big businesses have run their newsrooms that could be useful in the future?

The panel response: blank looks.

This in the town where robber barons sucked the Sun-Times dry and Sam Zell is playing monopoly with the Tribune.

Lessons to be learned? No.

No. Of course, no.

For nearly two decades, newspapers have been challenged to evolve into knowledge-based organizations capable of adapting to the innovations of the Web. Instead of progressing, they’ve been traded as chits in a greedy money-grab game by short-sighted media conglomerates. Their mismanagement has buried the papers with debt and forced record staff layoffs.

The big-time editors have got to know this. Likely they don’t want to publicly admit to the corrosive effects of their industrial-age bosses that view newsroom staff as “things” to cut rather than “knowledge workers” to invest in.

Their policies have resulted in what Jane Stevens so rightly calls Zombie newsrooms.

“Definition of a zombie newspaper: a skeleton staff operating in an organization that provides them little support and no room to make a complete transition to the Web, holding a death-grip on the paper instead of modernizing it.”
Our dwindling newsroom staffs and move to wire copy has had an unintended consequence. In response to the dearth of relevant local news, a new ecosystem of Chicago blogs and news aggregators has developed on the web.

Web journalists operating out of passion found it easy to find stories to report.

There are a million stories in the naked city. And there are a million ways to report them on the Web. We are entering a golden age for journalism — right now.

Chicago has brilliant lights like Adrian Holovaty, who with his partners has created Everyblock, which is a digital age “aha”! How does data delivered by Everyblock — crime, zoning, businesses — change the job description for reporters and editors? Chicago is also home to the much-publicized online non-profit newsroom — the Chi-Town Daily News.

Other sites like those I recently wrote about, LISC’sNewCommunities, and the BeachwoodReporter are run by journalists committed to telling the local stories that the legacy newspapers haven’t had the capacity — or the mission — to report. You can see an extensive list of these types of sites at Community Media Workshop’s site.

As I write, all of these valuable newsrooms — and more –are looking for cash to sustain themselves.

These under-reported and neglected areas of coverage are the bread and butter of tomorrow and many of them are running on vapor.

High-quality local information — which is what readers demand– is something the legacy newsrooms have lost sight of as they have jettisoned staff. News is not throw-away wire copy to wrap around ads but real information that provides insight and history. Editors know this, but what to do when papa corporation needs to pay the shareholders? Look at the collective shrug at the IFC event to understand the answer to that.

A lot of smart people have been sitting round the table at the Chicago Community Trust trying to understand how Chicago’s foundation community can assist. Many of us believe that we must evolve a new way to finance newsrooms and we are looking with hope to the new social enterprise hybrid, the L3C.

As Dean Stackman writes in the Columbia Journalism Review on the failure of the business press to cover its beat and alert the public to the systemic Wall Street’s boiler rooms that led to this “economic winter:”

“Never, ever underestimate the importance of editorial leadership and news ownership, for in them rests the power to push back against structural conflicts and cultural taboos fostered by industry, to clear a space for … journalism to do the job it is clearly capable of, the one job that really needed doing.”
Newsrooms are all about mission, and mission is set at the top.

When newspapers start charging for online news they’ll need to recalibrate their value system. And they’ll need to understand their added value.

The added value for newsrooms online and in paper is local news. Local news that serves the audience. And advertising that delivers information to the targeted audience — and that is local advertising. The businesses that own and operate our new newsrooms will have to understand those values.

There’s a conference June 16 in Minneapolis on Economic Models for News, and several local conferences on Chicago’s news future. You can learn more about these on my blog at www.sallyduros.com.

Carl Bernstein, Chi-Town Daily News, Chicago Community Trust, Chicago Media, Chicago Sun-Times, Chicago Tribune, Community Media Workshop, Don Hayner, Everyblock, Future Of News, LISC New Communities, Macarthur Foundation, McCormick Foundation, News Blogs, Newspaper Industry, Newsrooms, The Banyan Project, The-Beachwood-Reporter, Tim Stites, Chicago News

State of Pay – a Chicago news-blog suspense story

Originally published in Huffington Post-Chicago
Veteran journalists I know really enjoyed seeing themselves played by Russell Crowe in the recent film State of Play.

Handsome, disheveled, world weary and all-knowing, worn down by the events he views and records, Cal is still honest to a fault. Me, I am not as veteran as most — so my favorite was the set design of Crowe’s apartment. He had way too many refrigerator magnets on his fridge. That’s where I am at.

These days, it’s best to decorate the fridge, rather than open it. The shelves aren’t bare exactly, but they’re not stocked either.

I’d have to say that’s due to the current “State of Pay” in the journalism field.

As new and unexpected methods of news delivery reveal themselves, systems of vetting and hierarchy will develop, and established journalism will find itself embedded somewhere in this news delivery ecosystem developed by Steven Berlin Johnson, one of the founders of Outsidein.

Our emerging newsrooms will be staffed in part by a generation of newshounds — yes, journalists — who’ve taken on the task of news delivery through the Web on their own.

You can learn more about this world of independent news bloggers at The Chicago Media Future Conference, a free afternoon event Saturday, June 13, put together by Scott Smith, a senior editor at Playboy.com, and fellow co-conspirators, Barb Iverson, teacher of all things digital and journalistic at Columbia College, and Mike Fourcher, founder of Purely Political Consulting.

Meawhile, read on. I talked to a sampling of these entrepreneurs and here’s their review of the current “State of Pay” in Chicago.

The Beachwood Reporter
Steve Rhodes

“We just added a fantasy sports columnist,” says Steve Rhodes, editor and publisher of the Beachwood, “in addition to a new horse-racing correspondent and auto-racing correspondent.”

“We just posted another YouTube parody song, Wee Love Q by Green Bay Bill, Tom LaTourette and Joe Dillo. It has already been played on the radio.”

This follows a notable success. The Society of Professional Journalists in April honored a joint investigation by Chicago Talks and The Beachwood Reporter with the SPJ’s 2008 national award for online investigative reporting by an independent media outlet. The Better Government Association assisted with the investigation into the activities of Chicago City Council committees.

“The award was nice because it is the second year in the row that we have won while working with (Journalism Professor) Suzanne McBride’s class,” Rhodes says. “If Beachwood can do this without any money at all, with just a little bit of money we could compete with the legacy media,” Rhodes says. “It’s not like the newspapers are the only ones who can do it.”

Named after Rhodes favorite Wicker Park bar, The Beachwood Reporter is unique among Chicago’s news blogs. Searing political commentary is Rhodes’ signature and the rest of the coverage — on music, TV, politics, sports, books and People, Places and Things — shimmers with humor and creativity.

Joining a stable of 20 contributors associated with The Beachwood are
new columnists Dan O’Shea on fantasy sports, Thomas Chambers on horse racing and Carely Lundin on auto racing. Each and every one is a volunteer.

Recently, Rhodes says, one feature is soaring in popularity: Ferdy On Films, a member site of the Beachwood Media Company, is getting 40,000 unique views per month.

Windy Citizen
Brad Flora

“WindyCitizen’s front page is a snapshot of what is new and most interesting in Chicago right now,” says Brad Flora, editor and publisher. “It will all be local and it will all be interesting.”

Flora was one vocal guy at the Chicago Journalism Townhall in February. We won’t repeat what he said, but it was passionate and angry. He’s calmed down since then, and focusing on the business side of his site.

“We are very similar to a Digg or a Reddit,” Flora says. “It’s a people-powered editorial approach to pulling together the news of the day.”

As a crowd-powered front page for Chicago, on any given day Windy Citizen will feature local blogging, video, photos, news reporting that contributors have brought to the site. Flora says Windy Citizen has 42 blogs in its network, who are compensated by enhanced visibility. But none of them are PR writers, he said.

It’s a central place where links can be shared and content can be voted up and down.

“The stuff that gets the most votes floats to the front page using an algorithm,” Flora says.
He’s currently running a fundraising drive and he’s making some money. But the general state of money things?

“It’s been paying my rent and Ramen noodle bill,” Flora says.

New Communities
Patrick Barry

“We have some fermenting going on here and pretty soon the cork’s going to pop,” said Patrick Barry, an editor and writer at NewCommunities.org. “I hope that when the cork does pop it will unleash a bubbly cascade of champagne.”

Barry works with Gordon Walek to put out a suite of news sites that report on Chicago neighborhoods at Newcommunities.org.

Recently Walek and Barry launched NeighborhoodSportsChicago.org. They pulled everything together — reporting, writing and graphic design — and published it in 11 days.

“It was our latest experiment in trying to create new avenues for underreported stories,” Barry says. “We got decent traffic during that week.”

Built almost five years ago, New Communities sheds light on media-neglected Chicago neighborhoods and the organizing and economic growth going on in those places. It’s the kind of coverage that was the bread and butter of Chicago’s newsrooms in the days when newspapers were more prone to report on stories relevant to the entire demographics of a city instead of the top 50 percent income demographic.

The sites have sustained funding from the MacArthur Foundation, so unlike the editors of many news sites, NewCommunities editors and writers get paid for their original reporting. But still, since they are a nonprofit, their search for operational revenue is never-ending.

“I don’t want to simply pass on something from somebody else,” Barry says. “I want to create original content that is not provided anywhere else and provide some insight into why it deserves to be up there.”

“That takes work,” Barry says.

“I think people really have very little understanding of what goes into putting out news. The layers and layers of editing, reporting, graphic support and now technology support.”

Barry says NewCommunities coverage brings alive the language of community development in a powerful way.

“It’s allowed people to understand what community development means,” Barry says. “We just showed them by running stories and photos. You can touch and feel it a lot more rather than some theoretical presentation of comprehensive community development theory.”

Barry says the sites have been successful because of the vacuum they’re filling.

“The search engines saw the stuff immediately,” he says. And once they started publishing the sites, the neighborhoods got involved and started building their own grassroots sites.

“They realized that they could have their own voice,” Barry says.

Gapers Block
Andrew Huff

“We are soldiering on,” said Andrew Huff, editor and publisher of Gapers Block, a Chicago-centric Web publication providing information on news and events around town.

“We are looking for some new contributors in art. Our editors get a small stipend as an indication that we do want to try and pay everybody.

Chicago’s network of news bloggers is “definitely collaborative, and extremely supportive, but unfortunately that doesn’t translate into financial success,” said Huff, who launched Gapers Block six years ago.

And that’s what’s holding everybody back.

“I believe that the future of journalism is a whole bunch of little sites,” he said. “The newspaper isn’t being destroyed. It’s being exploded.”

And everybody is flying out and doing their own thing — pay be damned.

“In the past, newsrooms were considered to be almost a community utility,” Huff says. “But since investors started expecting ever-increasing returns, the money equation for newsrooms hasn’t made sense.” In the old days it was a stable profit, not an ever-increasing profit.

“I don’t think money people know how to make money with news,” Huff said. What does that mean for Huff who writer for business blogs to make ends meet?

“If I left, the site would die,” he said.

Community Media Workshop
Gordon Mayer

Thom Clark and his Community Media Workshop are making a list and checking it twice to understand what is happening in Chicago’s online news streams as part of a Chicago Community Trust project.

“One of the things that we are doing is building a list,” says Gordon Mayer, vice president. “We know how to do directories.”

“We found 70-80 solid online news sites. There are a couple of questions about what does and doesn’t fit into this category. That’s what’s going to be in the report,” Mayer says. “It’s basically impossible for a single organization to come up with an authoritative list.”

Mayers says that In looking at newspapers, “what really shifted was their mission of who they delivered information to. The audience shifted from everybody in Chicago to an audience that was more monied.”

And the Internet is clobbering newspapers because of it, Mayers says.

The Community Media Workshop’s portal opens into a plethora of channels aimed at assisting nonprofit communicators and others who want to connect with the legacy broadcast and newspaper press. Its NewsTips service offers insight into the kinds of stories nonprofits are seeking to place in the press.

The CMW is doing the report for the Chicago Community Trust and planning to build its own newsroom, Mayer says.

CMW’s annual conference June 9-11, Making Media Connections this year on June 11 includes a session on social media and the news that’s free. But if you want to attend anything else at the conference the cost is $95 for the half-day workshops and $190 for full-day workshops.

Read More: Andrew Huff, Barb Iverson, Beachwood Reporter, Brad Flora, Chicago Blogs, Chicago Media Future Conference, Chicago News, Chicago Newspapers, Community Media Workshop, Future Of News, Future-Of-Newspapers, Gapers Block, LISC New Communities, Making Media Connections, Mike Fourcher, Patrick Barry, Scott Smith, Steve Berlin Johnson, Steve Rhodes, Windy Citizen, Chicago News

Oh, News of the Future!

I have a new article on the Huffington Post about the death of newspapers, Newsrooms must die, Long Live newsrooms.

The point is the old ways have been dying, new ways have been emerging, and they will come together in something entirely new. Innovations from the web and old line practices that create credibility must inform each other. The split is perfectly expressed in the contingent ideas of Transparency and Image. Transparency sees a flattened hierarchy, and a community bubble up of ideas. Old line Image Makers see creation of experts from the top down by media giants. The new way recognizes that innovation bubbles up and is recognized. Image follows expert form. Imposition of Image (without the community bubbling up) will inevitably fail or be recognized as false.

I see a hybrid (NPO/For Profit) model of operation that will stabilize the staffing needs of newsrooms and deliver information to intended audiences through myriad distribution channels. Newsrooms will deliver by community-based mission and their staffing will be protected by the essential nature of their mission. Yet unlike mission-based non-profits that beg to sustain themselves, the new L3C newspaper will be self-sustaining through profits earned and investors.

Chicago Journalism Townhall and L3Cs

To the Panel of the Chicago Journalism Townhall:

A low-profit limited liability company (L3C) is not a non-profit (NPO). An L3C is a for-profit business that gets a kick-start from foundation funding and then welcomes investors to follow in, or vice versa. It has rules around making a profit and those rules include the fact that if you are getting foundation money to meet your social mission, you cannot neglect your social mission to make a bigger profit. That would mean in the case of a newsroom, that you could not lay off the staff because they cost too much, not as long as the staff is meeting their social mission.

The panel of expert journalists at the Townhall Sunday â€” sage and talented as they all are â€” would benefit from expanding their thinking. The non-profit model works well when it has achieved scale and is able to tap into the passion of the news consumers â€“ good example WBEZ.

But in an L3C, passion is built into the model. It is initially monetized by the presence of foundations and investors who expect a return in money and mission. Unlike the NPO mode, profits are welcomed and encouraged. But mission trumps profits.

I will be writing about this more in the Huffington Post tomorrow.

Meanwhile read through these excellent materials American for Community Development.

And as I said a few weeks ago in my article on L3CsHuffPo article, the Peoria papers are looking at it.

How to save newsrooms

Chicago’s newspapers could find a lifeline to solvency and a return to social purpose in a new kind of business structure called an L3C, or low-profit limited liability company.

Why is that?

Illinois foundations have $350 billion in assets and they are required to invest 5% of that, or $17 billion, in programs that serve a social purpose each year. If the Chicago Sun-Times and the Chicago Tribune were to be reborn as L3Cs — a structure that encourages foundation investment while allowing a profit –they could tap into some of that $17 billion. With foundation heavyweights on board, other investors seeking a decent, but not excessive, return might contribute to the coffers.

Bill SB 239 creating the L3C hybrid was introduced to the Illinois legislature Feb. 4 by Sen. Heather Steans (D-Chicago). Prospects for the bill are good, supporters say.

The L3C structure was signed into law in Vermont in 2008, and into law in Michigan and the Crow Nation in January. Legislatures in Georgia, Montana, North Carolina and Oregon are also expected to pass L3C legislation this year.

In Washington, D.C., draft legislation called the Program Related Investment Promotion Act of 2008 is being considered by staff in the Senate Finance committee. While many types of businesses–from community yoga centers to affordable housing–could benefit from L3Cs, the successful creation of newspaper L3Cs is largely contingent on passage of the Federal law, which would effectively expand charitable purposes to include newspapers.

The L3C structure plays well in Peoria where the Peoria Newspaper Guild, and a coalition of
Journal Star employees and community leaders have been quietly looking for two years at alternatives including co-ops and employee stock ownership plans (ESOPs) to operate the Peoria Journal Star.

The one idea that really clicked was the L3C.

“We are looking at long-term ownership that puts journalism first,” said Jennifer Towery, President of the Peoria Newspaper Guild and also Neighbors Editor for the Peoria Journal Star. “[The L3C] just resonated. It has so much potential.”

Because it can tap into foundation money, an L3C is sustainable, and because an L3C business must meet a social purpose, it realigns newspapers with their mission of community service.

“It insists that serving the readers is your mission,” she said. “If it doesn’t serve the readers to cut your newsroom staff you can’t do it.”

While good news judgment is essential to accomplishing the social return, the L3C structure has significant sweeteners to generate returns for investors.

“The participation of the foundation, which is seeking high social return but low monetary return serves as a catalyst for high investor return,” said Marc J. Lane, a Chicago-based attorney who authored the Illinois L3C legislation and last year launched Chicago’s chapter of the Social Enterprise Alliance, which believes in investing in businesses that do well by doing good. “You can end up with a blended financial return that is fairly modest but skewed toward the private sector investor.”

“Capital is formed,” Lane said. “Social purpose is achieved.”

The L3C is different from a typical nonprofit because it can earn a return, but the social purpose must trump the financial purpose.

Lane says that he expects the Illinois law will pass with little debate. “I see it sailing through,” he said. But even if it doesn’t, Illinois news gathering organizations could incorporate in Vermont or other states that have legalized L3Cs.

The creator of L3Cs, Robert Lang, CEO of the Mary Elizabeth & Gordon B. Mannweiler Foundation, says the Federal legislation is essential for any of these good news scenarios to play for newspapers.

Lang, an economist and businessman by trade, devised the L3C structure to address the problems he was having while trying to invest family foundation money in a sustainable and effective way.

“Historically, the IRS has not accepted newspapers as nonprofits,” Lang said. “The Federal legislation mentions L3Cs specifically and it lists newspapers specifically.”

The problem newspapers are dealing with today is that investors turned news-gathering into Wall Street product.

“The Peoria paper still makes money,” Lang said. “The problem is it cannot make enough profit for all the games normal for-profits get involved in.”

But in the L3C scenario, newspapers can make “enough” money.

“What we are looking at is the newspaper as a self-sufficient entity,” he said.
“It will not be a high profit entity.”

The idea of the Newspaper L3C is to bring back those journalistic contributions like neighborhood reporting, music reviews and book sections and make them part of the community service. And ads are part of the mix too.

“I think there is a lot of viability to newspapers still,” Lang said.

Could the L3C save Chicago’s newspapers?

“Somewhere you still need a newsgathering organizations,” Lang said. Newspapers still drive much of the news circulating on the web, he added.

“I’m not saying that we can save the Chicago Tribune and make it what it was 10 years ago,” he said. “But at least the money that’s made today can go toward improving the product not paying off leveraged debt.”

Meanwhile back at the Journal Star, which has an owner and is not for sale, Peoria Guild President Towery says, “We are all interested in finding models that others can replicate. It’s not saving the paper, it’s saving journalism. ”

“One of the bright spots is that [newspapers] have lost so much value that it is now feasible for communities to buy their newspapers.”

Read More: Americans For Community Development, Chicago Sun-Times, Chicago Tribune, Doing Well By Doing Good, Heather Steans, Jennifer Towery, Journalism, l3c, Low-Profit Limited Liability Company, Marc J. Lane, Mary Elizabeth And Gordon B. Mannweiler Foundation, Newspaper Industry, Newspapers, Oregon, Peoria Journal Star, Peoria Newspaper Guild, Program Related Investment Promotion Act Of 2008, Robert Lang, Saving Newspapers, Social Enterprise Alliance, Chicago News

How to save newsrooms [papers]

Published in the Huffington Post – Chicago.

By Sally Duros
Chicago’s newspapers could find a lifeline to solvency and a return to social purpose in a new kind of business structure called an L3C, or low-profit limited liability company.