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How A New Business Model Could Save America's Disappearing Local Newsrooms

The Salt Lake Tribune masthead.
Chelsea Naughton / KUER
The Salt Lake Tribune announced Monday that it had received the required IRS approval to become a non-profit entity. It is the first legacy newspaper to become a non-profit.

Kathy Stephenson has worked as a reporter for The Salt Lake Tribune since 1982. She’s taking this fellow journalist on a tour of its downtown newsroom and points to a row of empty, gray cubicles.

“We have a great big newsroom that used to be filled,” Stephenson says. “But as we've had layoffs, you know, it's a little lonely in certain parts of the newsroom that don't get used.”

She’s seen the ups and downs of the news business. Before the Internet, newspapers like this were flourishing. Companies bought ads, you could sell your car in the classifieds section, and journalists made a good living reporting on what the local government is up to.

But now we can sell stuff on Craigslist and get our news for free on sites like Facebook. This has all but doomed local newspapers. Last year, The Salt Lake Tribune, Utah’s largest paper, cut a third of its staff.

So it’s trying something new — a business model that looks a little bit more like public radio. 

Last week, the Tribune, after receiving IRS approval, became the first legacy newspaper in the country to transform itself into a nonprofit organization. This means it’s shrugging off private ownership and instead will rely mostly on cash donations, corporate donors and a planned journalism endowment created by some of these funds. 

Kathy Stephenson stands in front of the Salt Lake Tribune logo on a wood paneled wall.
Credit Nate Hegyi / Mountain West News Bureau
Kathy Stephenson, reporter for the Salt Lake Tribune, says local newspapers keep governments accountable. "How are they addressing the environment, traffic and all the things that are really important to you and your family," she says.

“It doesn't work anymore,” Jennifer Napier-Pearce, the Tribune’s editor-in-chief, says of the old business model. “It's broken.”

The organization hopes this new model will open the door to donations from both regular readers and philanthropists who want to support public service journalism. 

“It’s interesting,” Napier-Pearce says. “I came on as the editor of the Tribune three years ago. A lot of people say, ‘I love the Tribune. It's such an institution in the state of Utah. How can I support it beyond my subscription?’ And I had to say, ‘Advertise.’ You know, there weren't a lot of options. Now there's another option where people can support the paper, the institution that they love and get a tax deduction.”

This business model is novel for a legacy newspaper, but it isn’t new. Media outlets such as High Country News and The Texas Tribune have been running as nonprofits for a while. 

“I think it makes a lot more sense than the current business model,” says Mi-Ai Parrish, a professor of media innovation at Arizona State University and former newspaper publisher. 

Parrish says going nonprofit can resolve an inherent conflict. Many media companies are beholden to shareholders or corporate interests whose bottom line is making money. But she says a journalist is beholden to readers. “So a nonprofit model is much more reflective of the mission that we have,” she says. 

Though it’s by no means a magic bullet. “It still costs money to do the journalism,” she says.

Sometimes that cash only comes from a few big donors. So if they pull out, the organization can fail. That’s what happened recently to the Pacific Standard. The magazine was primarily backed by a single foundation that abruptly decided to pull its support this summer, and the magazine shut down. That fate is on the mind of Larry Ryckman, editor of The Colorado Sun.

“I've seen too many nonprofits who have gone before us, who went down that road,” Ryckman says.

There's a thing called democracy, and I hate to get too lofty about it, but really, I mean, if you do not have reliable information, you cannot self-govern — Jennifer Napier-Pierce, The Salt Lake Tribune

The Colorado Sun is an online news outlet started by former staffers from The Denver Post after that legacy paper downsized. Ryckman says the Sun has shied away from having a single big source of money and instead relies on corporate donations and members who give $5 or $10 a month. But like public radio, you can still get its reporting for free. Unlike public radio, the Sun is still a for-profit business, although Ryckman says they aren’t raking in the cash. 

“We're not trying to get rich off of this,” he says. “We're trying to do good work for Colorado. And so far, so good.”

Back at The Salt Lake Tribune, editor Jennifer Napier-Pearce is putting her money on the nonprofit model. She says she’s optimistic her readers will step up and support an important institution that’s been around for more than a century. 

“There's a thing called democracy, and I hate to get too lofty about it, but really, I mean, if you do not have reliable information, you cannot self-govern,” Napier-Pearce says.

She hopes that the Tribune’s new nonprofit status will chart a course for other struggling, local papers across the country.

This story was produced by the Mountain West News Bureau, a collaboration between Wyoming Public Media, Boise State Public Radio in Idaho, KUER in Salt Lake City, KUNR in Nevada, the O’Connor Center for the Rocky Mountain West in Montana, and KRCC and KUNC in Colorado.

Nate Hegyi is the Utah reporter for the Mountain West News Bureau, based at KUER. He covers federal land management agencies, indigenous issues, and the environment. Before arriving in Salt Lake City, Nate worked at Yellowstone Public Radio, Montana Public Radio, and was an intern with NPR's Morning Edition. He received a master's in journalism from the University of Montana.
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