The recession that accelerated the newspaper industry's transition is creating new models where local journalism can survive, writes Times Editorial Page Editor Ryan Blethen. One model known as the L3C — for low-profit, limited-liability corporations — could give rise to an era of local and independent ownership of newspapers.
By Ryan Blethen
For nearly 40 years, newspapers have been acquired by publicly traded corporations or ever-expanding privately held, but highly leveraged, companies. The inexorable, greed-fueled feast might finally be coming to an end.
An industry-transforming recession has exposed the decay of decades of corporate and profit-driven newspaper ownership.
In the detritus comes real opportunity. Some of the remaining Bigs are going to have no choice but to get out of the newspaper business or shed a number of what corporate types call "properties." This jettisoning of newspapers and the near valueless Wall Street assessments could give rise to an era of independent and local ownership.
One of the many intriguing ideas that could again place newspapers in the hands of local ownership is a new take on a tested business model: low-profit, limited-liability corporations. The new incarnation is called an L3C.
The L3C might be the perfect pairing for journalism and business. It would permit a company to act as a nonprofit and attract investors but allow for modest earnings. Even better, the overriding reason for an L3C is the public role it endows. This is a model made for the mission of newspapers.
Victor Pickard is examining L3Cs as senior research fellow at Free Press, a national media-reform organization. He said that L3Cs could free up newspapers to focus on serving communities with quality journalism.
"The low-profit model would let newspapers focus on their social good — that is, newsgathering — and not just the bottom line. It takes from the nonprofit and for-profit worlds: giving a return to investors, creating new avenues for philanthropy and focusing on local community service."