Financial turmoil in the media industry could open the door for alternative ownership plans designed to protect journalism's public mission, a panel of experts said Sunday.
"The major reason to get involved is increasing the level of voice and power that union members can have in terms of these restructurings," said Chris Mackin of Ownership Associates of Cambridge, who has worked on various projects for The Newspaper Guild for the past three years. "It's an opportunity to change how business is done."
Mackin's remarks were part of a panel on alternative ownership at this weekend's "Future of the Media Industry" conference in Baltimore. The event brought together leaders from the Newspaper Guild, The National Association of Broadcast Employees and Technicians, and the Printing, Publishing and Media Workers Sector, all sectors of the Communications Workers of America.
Media analyst Ken Doctor, left, gave a sobering assessment of the current state of the newspaper industry. He spoke during the meeting in Baltimore with fellow San Jose resident Luther Jackson of the California Media Workers.
When Frank Blethen put Maine's largest news organization, including the Portland Press Herald/Maine Sunday Telegram and The Kennebec Journal, up for sale, Guild leaders immediately set up a committee to muster community support and seek public-minded investors.
They posted a Web site (Yourhometownpaper.org) and ran ads urging readers to "Invest in Local News."
"Maine's largest news organization is for sale," one read. "Employee ownership is the best way to foster quality journalism. The newspapers unions are ready to work with local partners."
The outreach worked, attracting a small group of investors who began meeting with the union to build agreements designed to keep the company financially viable. Almost accidentally, discussions began sounding a lot like interest-based bargaining, in which both sides emphasize their bottom-line needs and look for areas of agreements, said Tom Bell, a Press Herald reporter.
With both sides trying to keep the paper afloat and in local hands, "we achieved more in that short time than Frank Blethen had in 10 years," Bell said.
Bernie Lunzer (right), president of The Newspaper Guild-CWA, discussed some of the fine points of media economics during the Baltimore meeting with Tim Schick, administrative officer of the Guild's local in Providence, R.I., and Secretary-Treasurer Carol Rothman.
While the Portand deal remains contingent on financing, Bell said, it gives a sense of what's possible in the midst of the newspaper industry's historic downturn.
The panel highlighted several tools available to workers interested in turning their news outlets into community-based enterprises.
One is an Employee Stock Ownership Program, or ESOP, which offer tax breaks to business owners and give workers a stake in their company's success. The Portland deal includes a 15 percent ESOP, with three union members serving on the company's board of directors.
Another is the Limited Liability Low-Profit Corporation, or L3C, which operates in the public benefit much like a credit union or a food co-op. The L3C is not a nonprofit, but it does serve a community purpose.
"It has to be a viable enterprise on its own right, but it doesn't have to be the most profitable," explained veteran journalist Lee Egerstrom, who's written books on cooperative business and economic development. "It just has to contribute to the community somehow."
Here's a brief podcast interview with Lee Egerstrom, shown at left speaking in Baltimore. Podcast
Photo by Maurice Thomas III, secretary, NABET-CWA Local 52031
Such enterprises thrive when they have wide-ranging support -- for newspapers, that might include not only readers, but also long-time vendors, ad-dependent local businesses, charitable foundations and other community organizations, Egerstrom said.
Three situations present ready opportunities to explore alternative ownership, said Mackin:
* A change of company control, such as when a newspaper is for sale;
* Concession bargaining, when a company is demanding major givebacks from
its unions for economic reasons;
* Creation of a start-up entity, perhaps to replace a shut-down company or employ laid-off journalists.
Media unions must forget new alliances to support alternative ownership models, Mackin said, especially charitable foundations -- which exist in part to support important social institutions that can't get by through ordinary business models.
"The market isn't supporting a free press," Mackin said. "We are the symphony of the 21st Century."
With values of newspapers and other media companies having plunged to record lows, the risk is low for foundations or other investors who want to support local journalism, said Robert Lang, CEO of L3C Advisors.
Here's a Podcast interview with Robert Lang,
right, in Baltimore. Podcast
Many companies may sell for little more than the value of physical plants, with no premiums charged for the goodwill associated with their names, or the presumed potential to reap massive future profits.
"Now you're become closer to a charity, and that's probably a good thing," Lang said. "If there's nothing for the sharks to feed on, they'll go away and you can create newspapers that serve their communities."
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