You Still Have to Break Even

There's plenty of excellent commentary challenging Sen. Benjamin Cardin's proposal to give non-profit status for newspapers, and there's not a whole lot I can add. But I'll contribute this sardonic line from a publisher I talked to recently: "What's the point? We're already non-profit."

And that's the point. As I've pointed out before, even non-profits have to break even (just ask the non-profit-owned St. Petersburg Times). Losing money is eventually a dead-end game. And many papers are losing lots of money. What they need to do is fundamentally rethink their business—not look to the government for strings-attached handouts. 'Nuff said.

Comments

[Dave]

I've done a lot of 2 things in my professional and community life -- asked for ad dollars and asked for donations (for non-profits such as the United Way). The challenge isn't much different.

If all the time that was spent on discussing non-profit models was spent actually talking to local advertisers we'd be much further ahead.

To transition from a for-profit to a non-profit model isn't for the faint of heart. Be prepared to convince all the shareholders on board to donate their assets into the non-profit (talk about shareholder battles and lawsuits waiting to happen!). Then be prepared to fire and re-hire your staff. Finally, you should expect to reconstitute your board as the IRS doesn't look kindly on an org that just looks like it's trying to avoid taxes and is otherwise the same as before. Expect to lose a good solid year while you wrestle with all these issues and strife. That doesn't sound like the promised land some think it is.

[Terro]

Well, my experience is that many non-profits spend more money on their leadership and staff than their expressed purpose. I think it is ridiculous to expect taxpayers to support news organizations that cannot market their own product.I think that forbidding news organizations (or anyone else) from expressing a political opinion violates the first amendment.Instead, try teaching Americans to actually read, comprehend and think critically. A newspaper needs an educated public. But please don't think throwing federal dollars into school districts will accomplish that.

[Howard Owens]

You have to do more than break even, you have to be able to maintain high margins in boom times, you have to bank profits, in order to ride out lean times, because newspapers are exceptionally cyclical businesses -- something CEOs for many publicly traded companies seem to have forgotten over the past several decades.