Lenfest “Donates” Philly Newspapers to New Nonprofit Media Foundation

New "Institute for Journalism in New Media" will own the Inquirer, Daily News, and Philly.com.

The Philadelphia Inquirer and Philadelphia Daily News newspapers sit on display on a newsstand in Philadelphia. (AP Photo/Matt Rourke)

The Philadelphia Inquirer and Philadelphia Daily News newspapers sit on display on a newsstand in Philadelphia. (AP Photo/Matt Rourke)

Gerry Lenfest has created a nonprofit foundation to own Philadelphia Media Network — the company that owns the Inquirer, the Daily News, and Philly.com — and endowed the new institute with $20 million as it oversees the newspapers’ continued operation.

The move places the papers under the auspices of the Philadelphia Foundation, transforming the biggest news operation in America’s fifth-largest city into an unprecedented experiment in preserving large-scale newsgathering in the fast-changing — and fast-diminishing — newspaper industry.

The news was first reported Monday night at Philly.com. A formal announcement will take place at 11 a.m. Tuesday at the National Constitution Center.

“I think it’s unprecedented for a big American newspaper to be turned into a nonprofit,” Rosental C. Alves, Director of Knight Center for Journalism in the Americas at the University of Texas at Austin, told Philly Mag late Monday night.

“It is not a surprise. In the last years, cutting costs has become an essential part of the business model for newspapers in this country,” Alves said, in comments that reflected the reality experienced by Philadelphia newspapers. “It has a limit. In many cases it’s becoming clear they will not be able to consolidate or cut costs. I would not be surprised if there were other cases coming up. All the eyes of the newspaper industry will be looking at this experiment.”

Lenfest has owned the newspapers since 2014. It had been rumored for several months that he was attempting to place the newspapers under nonprofit ownership.

“It’s important to keep journalism strong in this community,” he said, according to Philly.com.

How it works

Some details of the new ownership model, according to Philly.com:

  • The official name of the new nonprofit ownership organization is the “Institute for Journalism in New Media.” It will operate under the Philadelphia Foundation’s special asset fund, and it will be headquartered in Philadelphia or New York City. The newspapers are being “donated” to this new institute.
  • The structure clears the way for the  papers to take more grant funding from foundations, corporations, and other benefactors for reporting projects. The papers have already started down that road, using a grant from the Wyncote Foundation to fund coverage of the 2015 mayoral race
  • The institute will be endowed with a $20 million donation from Lenfest. But that cash won’t actually go to the newspapers — Philadelphia Media Network will be expected to “fight for every dollar it can bring in” on the business side.

The result? A sort of hybrid organization: The newspapers will be expected to at least break even, even as the Institute helps bring in outside grants. The papers will be editorially independent of the institute.

Lenfest also named a new board for the institute. Its members include Sarah Bartlett, dean of the graduate School of Journalism at the City University of New York; David Boardman, dean of the School of Media and Communication at Temple University; Steve Coll,  dean of the Columbia University Graduate School of Journalism; Michael X. Delli Carpini, dean of the Annenberg School for Communication at the University of Pennsylvania; David W. Haas, vice chairman of the Wyncote Foundation; Pedro Ramos, president and CEO of the Philadelphia Foundation; Rosalind Remer, vice provost and founding Lenfest executive director of the Center for Cultural Partnerships at Drexel University; David Schizer, dean emeritus and professor of law and economics at the Columbia University Law School; and Leonard Tow, founder and chairman of the Tow Foundation, which has funded projects including the Tow Center for Digital Journalism.

What it means

The financial decline of Philly newspapers has been well-documented. Even in a newspaper industry that has been in clear decline since the turn of the century, Philly newspapers seemed to be declining faster than most. The result? A succession of owners over the last decade — five different groups in all. Lenfest’s announcement should, at least, put a halt to that revolving door.

Beyond that, the news drew praise — some cautious — from journalistic experts who said it could put Philadelphia at the vanguard in determining the news industry’s future. This city, after all, isn’t the only place where papers are cutting staffers to survive.

“I think there’s going to be more experiments like this,” said John Temple, who was editor and publisher of the Rocky Mountain News when that Denver newspaper was shuttered in 2009. “It’s hard to imagine some cities will be able to accept the loss of the depth of local reporting to provide insight and accountability on the local level.”

“One thing it does: by transferring ownership to a nonprofit, it keeps the properties out of the hands of hedge funds and bottom feeders,” Jay Rosen, an NYU journalism professor, said via Twitter.

There were some naysayers. And Temple expressed concerned about the membership of the new institute’s board, comprised largely of academics.

“I don’t think it’s actually that encouraging,” he told Philly Mag. “I would ask, where are the people with new ideas on the digital and tech side on that board?”

Alves agreed plenty of hard work remains for the PMN to create a sustainable future, even in nonprofit form.

“It’s not that there will be no stockholders to receive a dividend — you still need a business model,” he said. “Hopefully, now that it is a nonprofit, it will develop a different relationship with the community and the community will help sustain it.”

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