If you think America’s drowning local newspapers can save themselves by transforming into nonprofit organizations, The Salt Lake Tribune isn’t going to quickly prove you right.
If you picture the first nonprofit daily paper in the country getting by on biannual fund-drives like NPR or PBS, you’d be wrong, too.
Think bigger and slower.
Last month, publisher Paul Huntsman finished the legal handoff of his newspaper to a nonprofit organization. The investor says he aims to build a $60 million endowment in the next five years. This will be a year of planning and reorganizing, with few visible changes until 2021.
The Tribune’s history is a capsule of the free press system in America. Family-owned for most of its first 100 years, The Tribune has in recent years been through a series of mergers that landed it, in 2010, in the hands of Alden Global Capital, a newspaper-owning hedge fund famous for hacking newsroom expenses to generate greater profit.
After watching The Tribune’s newsroom shrink and coverage retract, Huntsman negotiated for two years and bought his hometown paper. One of several sons of what is arguably Utah’s most wealthy and powerful family, Paul Huntsman was an establishment figure in charge of what had long been the anti-establishment paper in a town where the other newspaper is owned by the Church of Jesus Christ of Latter-day Saints.
Huntsman soon proved his independence as a publisher, taking the church (of which his billionaire father had been a top officer) to court in 2017 to expose documents that showed Brigham Young University mistreated campus rape victims.
It was sweet affirmation when that story won the Pulitzer Prize for local reporting, just a year after Huntsman had rescued the paper.
But The Tribune was unprofitable and Huntsman was covering the newsroom payroll out of his own pocket, something he says he could not continue to do.
By 2018, Huntsman had cut the Tribune’s staff by a third, continuing the exact pattern he’d meant to break. “I came to my own conclusion that this entire industry was busted and broken,” said Huntsman, who operates the private equity fund that manages his family’s chemical, manufacturing and investment property.
“My day job is: I run our family office. I buy businesses,” said Huntsman. “I would never buy something like this in a million years because there’s no business model.” Although cutting expenses and staff works for some companies the Huntsmans own, it is not a sustainable way to run a newspaper, he said.
Looking for solutions, he studied the for-profit papers in Philadelphia and Tampa, which are owned by nonprofit organizations. Rather than handing off earnings to a nonprofit, Huntsman decided to go all-in, making the paper itself a nonprofit.
Courageous independence is his goal so that readers can depend on the paper to hold the powerful accountable. Hence, the whopping endowment, which Huntsman would like to build to $100 million by 2035.
As new as that approach is, it would restore the cushion of 50 years ago, when newspaper profits routinely hit 30% and publishers had little to fear from government or business interests who might want to kill stories or influence coverage.
In the era of digital advertising controlled by Google and Facebook, newspaper revenue has sagged so far that many publishers have stayed afloat by cutting staff, cutting print days, shrinking paper size and avoiding controversial investigations. That’s no way to build for the future, Huntsman said.
Even though his family foundation has pledged the first $10 million, and few doors in Utah are closed to a man whose father, Jon Huntsman Jr., gave away a half-billion dollars in his lifetime, building a $60 million endowment may take time.
Meanwhile, the pandemic-prompted economic freeze is killing newspapers across the U.S.
Endowment building is slow, said Jay Shelledy, former Tribune editor and member of the new nonprofit’s board. But he says it is preferable to seeking and relying on government subsidies, which is one solution newspaper owners pursue. Public radio and TV subsidies, though small, make them subject to pressure from Congress.
Shelledy said there is plain evidence the Utah public supports investigative reporting, even when sacred cows are gored. When The Tribune announced last fall it had won nonprofit status, there was a burst of donations from the community, Shelledy said. “Without much of a prompt, readers, individuals, not foundations … threw in over a million bucks, just on their own.”
Huntsman is aware most publishers don’t think going nonprofit will fix the financial problems that threaten to wipe out newspapers across America.
Instead, industry trade groups take, as a given, that newspapers will continue to operate as private corporations and are lobbying Congress for new laws and subsidies to correct what they say are structural inequities.
News industry analyst Ken Doctor expects Tribune journalism to benefit from Huntsman’s nonprofit experiment.
“If you don’t need to be profitable, you can aim for a lower (profit) number, which means you can invest more in the company and the newsroom,” he said.
While Huntsman says the new nonprofit system won’t be operating until next year, the Tribune’s journalists are aggressively doing their jobs for their community.
Just last week, The Tribune caught a University of Utah police officer showing off nude photos from a case file. The photos had been used to blackmail a student who was eventually murdered by the blackmailer.