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.

Tash says the goal is to keep the profit margin of the Times above 10 percent, roughly half of what most newspaper companies demand. (He also acknowledges falling short of that benchmark in the last two years.) But despite this more modest target—and despite the undeniable advantage of having a nonprofit as your ultimate boss—the Times faces the same problems as almost every other newspaper. Its advertising revenue is sensitive to the local real-estate market, which was soft even before the recent meltdown in subprime lending and seems unlikely to recover any time soon. The paper has cut about 10 percent of its newsroom staff in the last year, and shrunk its physical size as well, absorbing the attendant decrease in the newshole. In an attempt to capture younger readers, the Times has also launched a free daily tabloid, the tbt*/Tampa Bay Times, but Tash acknowledges it is still losing money at this point. He expects it to start showing a modest profit by the end of 2008 (ahead of internal projections). In January, the company also announced it would sell CQ Press, Congressional Quarterly’s successful book-publishing division.

Still, given the pressures most newspapers contend with, reporters and editors at the Times know they have it good. “We’re aware of the structure and how it’s special,” says Neil Brown, the paper’s executive editor, who goes on to call the Times “a jewel of American journalism.”

A Model Problem

The undeniable advantages of the Poynter model naturally raise the question of how applicable it is to other large newspapers, particularly those that remain under individual or family control. On that point, it should first be noted that Nelson Poynter’s vision for the Times was not without its challengers. In the 1950s, in an effort to placate his sister Eleanor’s bruised feelings about his discounted purchase of the Times from their father, Poynter sold her a small stake in the company plus 40 percent of the voting stock. This deal included a key proviso: Poynter could buy back her stock at a fair price. But despite several attempts, he never managed to do so—and after Eleanor’s death in 1987, her daughters asked the paper to buy out their position in the company for $120 million.

The Times management declined the deal. In response, the daughters teamed up with Texas billionaire Robert Bass to try to force a sale of the entire paper. When those negotiations went nowhere, Bass upped the ante, offering to buy out all the company’s shares himself for $270 million, arguing that the proceeds from the sale would create a much more generous endowment for the Poynter Institute than the revenue stream from the publishing operation. This deal, too, was rejected, at which point Bass sued, claiming that the paper’s management was violating its fiduciary duty to the shareholders by rejecting his offer.

The case was ultimately settled out of court, and Bass withdrew his threat. Yet he had made a point relevant to anyone thinking of recreating the Poynter experiment elsewhere: the Times is a paper where all the financial decisions are made by someone with no direct economic stake in its success. “No one is like that,” quipped one Bass ally at the time of the takeover fight, “but the St. Pete Times and Pravda.”

Douglas McCollam is a contributing editor to CJR.