Essay — March / April 2008
Somewhere East of Eden
Why the St. Pete Times model can’t save newspapers
By Douglas McCollamThe temple housing Nelson Poynter’s holy relics of journalism is located outside of downtown St. Petersburg, on a sunny chunk of Florida real estate just a stone’s throw from America’s only museum dedicated to the surrealist master Salvador Dalí. Visiting both buildings in quick succession, as I did last summer, offers an interesting study in contrasts. Dalí’s work highlights the transient nature of reality, invoking an often-nightmarish landscape. Across the street, the Poynter Institute exudes a kind of stately permanence and clarity of purpose, which is exactly what its founder sought in creating a haven for journalism.
With the profession facing its own nightmarish landscape these days, many journalists have expressed a renewed appreciation for the nonprofit Poynter Institute and the newspaper it owns, the St. Petersburg Times. Visiting the institute’s tidy campus, it’s easy to see why. Here is a true refuge: a place where reverence for newspaper culture is on conspicuous display, in a facility that is part museum, part library, part school, and wholly consumed by its mission to promote the cause of journalism.
Perhaps that’s why in recent years the story of Nelson Poynter and his institute has become something of a soothing bed-time story for traumatized journalists. While reporters are forced to endure draconian cuts in their own newsrooms—many of them enacted (as journalists see it) by mutton-headed managers with their eyes riveted on the bottom line—they can still dream of a land not too far away where a well-tended band of scribes toils under the benevolent gaze of ownership unconcerned with trivial matters such as EBITDA and online ad revenue. The reality, of course, is more complicated, and demonstrates why the Poynter model offers no easy cure for the ills that plague American journalism, even at the newspaper it was created to save.
Trust and Debates
“We are a private, for-profit company.”
This was virtually the first thing Paul Tash, the lanky, fifty-three-year-old Indiana native who heads the St. Petersburg Times, said to me last summer when we met in his office to talk about the Poynter model. It was a point he would make even more emphatically a few weeks later in a letter to The New Yorker, after the writer Steve Coll referred to the Times as a “nonprofit foundation” in a story. Clearly, Tash is irked by the lingering misconception in journalism circles that his paper is some kind of altruistic venture. Much of this confusion, though, can be chalked up to the paper’s curious ownership history.
Almost immediately after gaining control of the Times in 1947, Nelson Poynter began to contemplate its future after his death. He had bought the paper from the previous publisher, his father, for $50,000. Still, Poynter did not want the paper to become a family inheritance, famously stating that, “I’ve never met my great-grandchildren and I might not like them.” Instead he conceived of leaving the Times to a nonprofit foundation his family created in 1953.
This turned out to be more complicated than Poynter envisioned. By the late 1960s, Congress had become leery of nonprofits owning commercial enterprises even as they continued to reap tax benefits from their nonprofit status. In 1969, a new law stipulated that a nonprofit could own no more than 20 percent of a commercial enterprise—even if that enterprise happened to be a newspaper.
The law, however, included a few exceptions, notably one for educational institutions. So Poynter decided to create a school of his own. Originally dubbed the Modern Media Institute, it was renamed the Poynter Institute for Media Studies eight years after Nelson Poynter’s death—an honor he had specifically declined in life.
Poynter’s will left three-quarters of his shares in the Times Publishing Company to the school, with most of the balance going to his wife and children (these shares, too, were eventually given or sold to the institute). More radically, Poynter granted his designated successor the sole authority to vote those shares, as well as the exclusive power to name his own successor when the time came. This lucky individual receives no direct financial benefit from the proxy, but essentially wields total control over both the newspaper and the institute, including the ability to set his own salary. And today, that unassailable position is occupied by Tash. He serves as editor of the Times, chairman and CEO of the Times Publishing Company, and chairman of the board of trustees of the Poynter Institute, giving him the kind of operational clout that Donald Graham or Arthur Sulzberger might envy.
Tash presides over an intricate capital structure. The Poynter Institute owns the shares of the Times Publishing Company, which in turn owns the St. Petersburg Times, Congressional Quarterly, and several smaller publishing ventures. Roughly two-thirds of the profits generated by the publications go to the Poynter Institute in the form of dividends from the publishing company. As Tash is quick to note, this means that the paper must make money for the institute to receive its annual funding. So, the market pressure is still there—mitigated, of course, by the fact that the executive who controls the paper (Tash) also decides how much money should go to the owner (the institute), which he also controls. It’s a closed loop, and a virtuous one in the minds of most journalism boosters.
That doesn’t mean there isn’t occasionally tension between the institute and the Times. In 1976, its first full year of operation, the Poynter Institute had four employees, ran eleven seminars for 267 students, and leased 4,500 feet of cheap, downtown office space. By 2007, it had over sixty employees and offered 120 programs and “webinars” for nearly 64,000 students, both on site and online, not to mention costs associated with maintaining its nearly six-acre campus. This is a fairly large tab for the paper to pick up. In 2006, for example, the combined revenue of the company’s publications yielded about $6.2 million in dividends for the Poynter Institute, about two-thirds of its total funding.
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Tue 18 Mar 2008 01:06 PMYou might enjoy this related audio interview with Knight Foundation CEO and President Alberto Ibarguen.