behind the news

The Ford Foundation’s unprecedented grant to The Los Angeles Times

And what for-profit/ nonprofit partnerships mean in the age of Sam Zell
May 22, 2012

On Thursday, Los Angeles Times editor Davan Maharaj announced that his paper, once a profit engine for multi-billion dollar corporate owners and still one of the most powerful news organizations in the country, will receive a $1 million grant from the Ford Foundation, and thus join the growing ranks of journalism outlets funded in part by major philanthropy.

To be clear, $1.04 million over two years (the terms of the grant), represents only a tiny fraction of the LAT editorial budget, but the hiring of grant-funded reporters by the country’s fourth largest newspaper has meaning beyond the symbolic. In his article on the deal, LAT media reporter James Rainey cited precedent such as the for-profit New York Times’s partnerships with nonprofit outlets in various states to produce local editions. It’s a noteworthy comparison, but The Texas Tribune and other nonprofits that partner with the NYT (1) are news outlets in their own right that produce a great deal of work beyond what the NYT reprints and (2) are paid by the NYT for their work. ProPublica is another nonprofit that works closely with for-profit media throughout the country, but it operates collaboratively with existing staff at partner organizations. A foundation giving money directly to a for-profit to supplement its reporting may simply be the logical extension of such partnerships, but its unprecedented as far as I know.

There’s much to celebrate about for-profit/ nonprofit collaboration in general, and much to celebrate about the Ford/ LAT deal in specific. Thanks to the grant, the LAT—which laid off another seven journalists just this month—will be able to hire five new reporters to cover important beats including immigrant communities, the California prison system, and the Southwest border region. These beats—which deal broadly with issues of inequality and injustice, as per Ford’s goals for the grant—have long been under-covered by even the most financially successful newspapers (see the fifth season of The Wire). One of the strongest cases to be made for the Ford grant is that it’s arguable that foundations should have stepped in to incentivize publishers to cover these issues decades ago. Current pressures on the for-profit model make a newspaper’s impulse to cater to a wealthy audience stronger than ever, and major foundations are probably the best hope for correcting that imbalance.

Another obvious benefit of Ford’s choosing this particular for-profit to receive this grant is that the LAT has far greater reach, talent, and cachet than any other journalistic entity in California. Why should an outlet that is so well situated to carry out the foundation’s objective to “preserve and advance high-quality journalism” lose out on funding simply because of its business model?

So far, foundations working to preserve journalism have had three choices. They could either (1) spend large amounts of money and time in order to build new journalistic institutions from scratch (2) create hybrids like ProPublica that could work to boost old media, or (3) put money into research, education, and other endeavors that will benefit journalism in the long-term but are less effective in addressing the immediate crisis. By giving money to the LAT, Ford has effectively said that there is a fourth option: directly subsidize established journalistic brands.

It’s a refreshing angle, but there are consequences. The worst case scenario is that the Sam Zells of the world (Sam Zell remains Tribune Company’s chairman, but you can think of him as a stand in for anyone you’d rather not have controlling a newspaper) will take grant-funded coverage as a further excuse to slash every part of their newspapers that isn’t either profitable or subsidized. The LAT, after all, is the paper at which former publisher Mark Willes came up with the idea that each section of the paper (whether sports or books or foreign coverage) would have its own publisher responsible for making his or her section profitable on its own terms. The idea was never implemented, but what’s to stop it from happening in the future? Will publishers take the opportunity to make money where they can and outsource public interest journalism to the nonprofit sector (and, by extension, public donors and the IRS rules that encourage giving at the expense of the US Treasury)?

Sign up for CJR's daily email

In some ways this sounds like a preferable model to the lack of one that major newspapers are currently working with, but we shouldn’t ignore the dangers of giving up on the fundamental idea that some more profitable parts of journalism should help to fund other less profitable parts. That is in many ways the very thing that makes for-profit journalism so powerful and so important. Market forces create a product that people actually want, and then that product comes bundled with things that readers may be less excited to shell out money for but nevertheless serve a public good and should be exposed to the widest audience possible.

I’m not by any means saying that Ford is arguing against that idea. In fact, their grant could be read as an argument for it. What I am saying is that good faith actions on the part of the philanthropic and journalistic communities need to be met with good faith actions on the part of the business community, and that seems like a great deal to ask for from many newspaper owners. (Surely Ford has thought extensively about this issue. I reached out to them for comment on Friday but they haven’t been able to speak with me yet. I’ll update this post when and if they respond.)

For the LAT, it’s impossible to say whether a more promising owner is on the horizon. In the short term, Tribune will soon (surely before the Ford grant expires) exit its three year federal bankruptcy proceeding, at which point the LAT and the other Tribune papers will be controlled by a group of creditors including JP Morgan. Perhaps that group of creditors will instantly sell, perhaps not. It just came out today that the company is reorganizing in a way that will make it easier for those creditors to sell properties.

The future potential of for-profit/ nonprofit partnerships is highly dependent on who ends up controlling the LAT and other papers. A for-profit LAT run benevolently by someone like Eli Broad (the billionaire philanthropist who originally bid against Zell for control of Tribune) and then further sustained and emboldened by foundation grants is a workable (if idyllic) model and one that could reach a broad swath of California. A for-profit LAT run from afar by a conglomeration of large banks scouring balance sheets and cutting any unprofitable journalism not subsidized by grants is a sadder thing to picture, and hardly beyond imagining.

Michael Canyon Meyer is a freelance journalist and former CJR staff writer. Follow him on Twitter at @mcm_nm.