community newspapers PR

The latest shift from for-profit to not-for-profit media — this time by the leading Quebecois online news outlet La Presse — shows a new way of reporting news that should be embraced by Australian media and governments.

In announcing the shift early this month, La Presse president Pierre-Elliott Levasseur said it was easier for the government to justify giving taxpayers’ money to not-for-profit organisations than to those making money. Australians, fresh from watching Foxtel quietly trouser $30 million from the taxpayer while ABC funding is frozen, may smile at such touching Canadian naivety. But as a principle, it’s hard to argue with.

Not-for-profit means a news organisation can focus on the news, instead of simply making money for its shareholders. La Presse has been a leader in digital transformation, ceasing all print editions in December last year. It cashed in on the tablet boomlet, building about 270,000 tablet subscribers.

La Presse‘s transition can draw on government assistance through the CA$75 million Canada Periodical Fund, set up in 2010 in place of previous postal subsidies to assist community and regional papers, and $50 million over five years committed in the 2018 budget to help not-for-profit-journalism and local news.

In Australia, government and media are getting in the way. Governments prefer to play favourites in exchange for electoral support. The media, themselves, are hamstrung by a competitive zero sum approach: any gain for you must be a loss for me. Growth in the not-for-profit space is only seen as a threat.

As a result, Australia risks being left behind, with The Guardian as our sole example — although one which remains dependent on being part of a multi-national network.

The move by La Presse is the first major shift by a traditional media organisation since the major Philadelphia papers — The Inquirer, the Daily News and Philly.com — were donated to a not-for-profit in January 2016. These organisations continue to rely on philanthropic support.

More common in the US has been the establishment of not-for profit news organisations from scratch, such as the state politics focussed Texas Tribune, the investigative Pro Publica, or the long-standing Center for Investigative Reporting, funded through a mix of donations, philanthropy, memberships, subscriptions and product sales.

The lack of transitions is no accident. Traditional media bring legacy costs for staff entitlements, including health care and pensions in the US. Without support, these would cripple a not-for-profit. That’s why La Presse is being sent off with about $50 million from its former parent. That’s a lot — but not much more than a standard Australian redundancy round.

As the banks are discovering — and as media reputation surveys have long taught us — “for-profit” and “trust” don’t necessarily go together. For-profits are embedded with that noxious concept of shareholder value: the idea that a company exists primarily to make money. 

More prosaically, there’s rarely enough money going around to both fund quality journalism and pay the sort of dividends fund managers have come to expect. Some return is critical, as not many people are hanging onto their newspaper shares in hope of capital gain.

But as US newspaper group Digital First Media shows yet again, in an industry with social responsibilities, focus on profits drives bad behaviour. (Did someone mention the banks again?) The hedge fund owned DFM is the country’s third largest group, with roughly the revenues of either News Corp’s or Fairfax’s papers in Australia and New Zealand. Yet, as a recent report shows, their slash and burn approach is delivering an operating margin of 17% — for the time being. Despite the company name, there seems little pretence of attempting to manage any sort of digital transition.

It’s over 40 years since the Boston Consulting Group gave us the metaphor of the “cash cow”: in a mature industry, you’re a mug (from a fundie’s perspective) if you don’t take the opportunity to milk all the cash you can, for as long as you can. Bugger the social responsibility of journalism!

Journalists know that it’s in this social responsibility that we find the real value of journalism. The not-for-profit model offers journalists, media organisations and even governments an opportunity to embed these responsibilities in a new framework.

Peter Fray

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