Key practitioners forming a new model of community media ownership reflected on a critical milestone: the acquisition of 24 local newspapers in Colorado by the National Trust for Local News (NTLN). Staff from NTLN and its financing partner FJC discussed the origins of this unique partnership during a breakout session at the Public Media Development and Marketing Conference, which was hosted and sponsored by The Google News Initiative. [VIDEO]
The acquisition of Colorado Community Media (CCM) represents a first-of-its-kind partnership to preserve local mission-focused community ownership. The Colorado News Conservancy, a public benefit corporation jointly owned and operated by NTLN and The Colorado Sun, acquired CCM, an independent, family-owned group of 24 community newspapers and websites. The acquisition was financed with a $1.5 million loan from FJC, alongside a coalition of local and national impact investors.
Chris Jansen, the Head of Local News, Global Partnerships at Google, framed the conversation, describing this acquisition as “unlocking a new path forward for acquiring—and financing transformation of—local newspapers, and bringing in both local and national funders.” He said that the innovative partnership attracted the interest of the Google News Initiative, which aims to help journalism thrive in the digital age and is a seed funder of NTLN.
Asked about the origins of NTLN, co-founder Elizabeth Hansen Shapiro said that she and her co-founders intended to create an organization that was “like a nature conservancy for local media.” The media landscape has evolved rapidly in recent decades, putting strain on traditional news business models. She noted that public broadcasting companies had benefited from a combination of pooled investment along with technical assistance, and NTLN was formed to provide a similar series of supports to preserve trusted local news titles. The acquisition of CCM is a model that NTLN intends to replicate across multiple markets across the United States.
Lillian Ruiz, NTLN co-founder and Managing Director for Portfolio, described how local newspapers can benefit from increased operational and business discipline. “From our expertise, partnerships and relationships, we can elevate the operational soundness, the efficiencies in how local newspapers look at innovation and revenue experimentation, and give [local newspapers] the headroom to get there. That’s where we see our opportunity and impact.” She also noted the role of impact investment in the model. “Patient mission-aligned capital is necessary for these organizations. When we’re talking about community media, it’s completely necessary.”
Sam Marks, Chief Executive Officer of FJC, noted the underwriting challenges in financing the acquisition, since NTLN was a start-up nonprofit without significant assets to provide collateral for the loan. FJC was able to get comfortable making the loan because three funders provided guarantees: The Colorado Trust, Gates Family Foundation, and American Journalism Project. Mr. Marks noted the replicability of this approach to other new mission-based industries. “Private foundations typically spend down around 5% of their assets per year on grants; the rest of their balance sheet could theoretically be put to work as guarantees for innovative structures like this, where it’s something new and impactful but the actors don’t have the balance sheets to stand it up.”
Mr. Marks noted that many local newspapers are being acquired by private equity firms whose profit motivations can run counter to the mission of having a thriving, well-resourced, independent press. “Philanthropy and the nonprofit sector working together can figure out governance and financing [approaches] to make something that works for the public interest.”
A video of the webinar can be found at this link.