The OC Register’s transportation snarl

A media company's deal to serve as a broker for a city transportation hub is a bridge too far

Aaron Kushner and his revamped Freedom Communications get huge slack around here.

As Ryan Chittum explained in the May/June CJR, the 40-year-old former greeting-card executive, with zero experience in newspapers, is running the most interesting and important experiment in journalism right now, based on the simple ideas that newspapers’ wounds are in large part self-inflicted and there is money to be made from subscribers, especially in, of all things, print.

He’s reinvested in the newsroom, raised prices, and put up a paywall, in this case, a hard one, meaning one click, and you’re ask to pay.

Details of the model aside, one thing we like about the general approach is that it is a living refutation of the noxious notion, fashionable only a few years ago, that journalism has no value in the market, and that the pay model creates what I call a “quality imperative.”

All good.

And we (royal) also understand the need, given the digital storm, to be as creative as is reasonable in coming up with new revenue streams: sponsorships, memberships, conferences, even native ads. None of these are problem free, but then what is?

But there’s creative, and then there’s WTF, and that’s where we are today.

The Voice of OC’s Adam Elmahrek and Nick Gerda report that Freedom, publisher of the Orange County Register, is about to strike a deal with the city of Anaheim by which the media company will become the city’s “broker”—a fair word—in soliciting sponsorships for a new transportation hub.

And yes, whenever, Freedom signs someone up, it will get a cut. See the language of the agreement here:

Kushner defends the project as a new twist on the old advertising model and on newspapers’ traditional business-side role as civic boosters.

“Effectively, we are acting as an additional source of marketing muscle to try and bring private support to this project because our mission, we believe, is to help Orange County grow,” Kushner said. “We believe this is an important project.”

There is actually something to this; more on that in a second.

My fellow media nabobs are sharply critical of the arrangement. Says USC’s Marc Cooper:

“You don’t become a booster of Orange County by becoming a partner with institutions of power,” Cooper said. “As a newspaper you do it by making the county the most honest, most efficient, most accountable county in the country. And newspapers should be on the frontlines of that. That’s the role of a newspaper. Not to be a PR agent.”

There’s something to that, too.

Even the mayor of Anaheim is against the deal, which was struck by the city manager.

A couple of things:

Kushner is right that newspapers have traditionally acted as civic boosters: publishers or CEOs might sit on development advisory boards and chambers of commerce, head charity drives, cultural events, literacy campaigns, etc. Often, through their headquarters, news companies had big real estate stakes in a city’s downtown, and so would stump through editorials and even lobbying for big development projects, like convention centers or stadiums. The model was hardly problem-free. Downtown real estate was and is a perennially touchy beat at newspapers. The New York Times, for instance, has long had a fraught relationship with the development of Times Square and its environs, with the most famous example being when the great Sidney Schanberg quit in 1985 after a column he wrote about coverage of the West Side Highway project was spiked.

Now we have a formal business partnership with the city.

It’s true that back in the day, newspapers were dependent on big ad accounts like the local grocer and car dealer, and that firewalls were set up to allow the newsroom to report without knowing much about ad sales. The Wall Street Journal’s great post-war leader Barney Kilgore cemented the separation of functions in 1954 when he successfully faced down General Motors, then the paper’s biggest advertiser, after it had pulled its ads and threatened to sue over coverage it didn’t like. And over the years, one could say the firewall system worked, more or less.

And the Register/Anaheim deal is certainly different in a fundamental respect from the LA Times/Staples Center scandal, in which the paper agreed to share revenue from a special issue of its magazine. In that case the editorial content of the magazine, at least, was clearly implicated.

On its face, this deal is as Kushner says it is: It’s a business-side arrangement that can be insulated from the newsroom. One could say, “well, the proof will be in the coverage,” and leave it at that. If the Register puts its best reporter on the transportation beat, and she comes up with great stories, then the conflict of interest could be said to have been successfully managed.

But there are a few problems:

1. This is not just any partner, but the city, the main thing the Register is supposed to cover.

2. The 12-month deal provides the media company with a clear and ongoing disincentive to cover the transit center aggressively, and the project, still under construction, has already been controversial. That’s unusual.

3. Even if the transit hub’s construction and operation are scandal-free from now on, readers can never be sure the coverage was uncompromised because they’ll never know what the Register didn’t report. The appearance problem is a problem.

4. The Register has already been beaten once on this story. After the Voice of OC called them on Thursday about the deal with the city, the Register put up its own story that night. Kusher told the Voice of OC his own paper didn’t write about the deal because “it doesn’t exist yet.”

This last bit sounds worse than it is, since the business side wouldn’t necessary share its pending deals with its newsroom, nor should it always be expected to. But still, the Register needs to lead on the coverage, and it’s already been caught flatfooted.

Kushner says this deal can work. I would like it to work.

But it doesn’t.

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Dean Starkman Dean Starkman runs The Audit, CJR's business section, and is the author of The Watchdog That Didn't Bark: The Financial Crisis and the Disappearance of Investigative Journalism (Columbia University Press, January 2014). Follow Dean on Twitter: @deanstarkman.