struggling new york times, struggling newspapers, newspapers ask for handouts, foundations help newspapers, philanthropy saves newspapers
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Newspapers May Seek Handouts to Stay in Print

January 24, 2009 09:00 AM
by Isabel Cowles
As newspapers across the country face ever more dire financial crises, they may turn to philanthropic sources for support.

Print Industry in Transition

Newspapers across the country are facing flagging sales and advertising due to the prevalence of free online content and a faltering economy. Some major metropolitan dailies are filing for bankruptcy or may fold altogether.

As a result, print publications that are fighting to survive could begin approaching civic foundations and private donors for philanthropic aid.

The  Knight Foundation recently announced a plan to help finance civic organizations with proposals to expand "news and information in their communities." David Westphal of the Knight Digital Media Center suggested that such schemes might lead the way toward helping newspapers directly.

However, several obstacles remain before struggling local and national news sources could gain access to funding. Westphal noted that many foundations may not want to tackle the additional paperwork associated with funding for-profit organizations. But that problem could be surmounted with a partnership.

More critically, it could be difficult for a newspaper to maintain its credibility in such a scenario. Charlotte Hall, president of the American Society of Newspaper Editors, told Westphal that, "A new kind of firewall would be needed to assure independent reporting and unencumbered editing."

Nevertheless, Hall remained optimistic that new standards could be successfully implemented.

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Background: Publications Struggling Nationwide

Publications across the United States were facing tough times even before the economic crisis due to plummeting advertising sales and the increasing popularity of online content, prompting many to restructure their finances and make unanticipated sales.

Recently, The New York Times Company, which owns and controls The New York Times, accepted $250 million from Mexican billionaire Carlos Slim Helú to bolster its struggling finances; advertising sales have declined and the newspaper is carrying $1.1 billion in debt.

Slim, who is reported to be the world’s second-richest man, is the owner of Banco Inbursa and Telmex, a communications company. He already owns 6.9 percent of the Times Company; the deal would increase his ownership to 17 percent.

In addition, the Seattle Post-Intelligencer recently went up for sale. The only other paper in the city, the Seattle Times, may also shut down; if both publications were to close, Seattle would be the only major U.S. city without its own newspaper.

In December, Tribune Co., one of the nation’s largest newspaper publishers (controlling the Los Angeles Times, Chicago Tribune, Baltimore Sun, Orlando Sentinel, Hartford Courant, Morning Call and Daily Press) sought bankruptcy protection, due to a $13 billion debt and a loss of advertisers. In the meantime, the group that owns Philadelphia Inquirer and the Philadelphia Daily News missed an interest payment in an attempt to get their loan renegotiated.

Last week, the Minneapolis-St. Paul Star Tribune officially filed for bankruptcy protection after talks with major unions did not yield a series of labor concessions the paper said would be necessary to sustain it economically. The Star Tribune plans to continue publishing news as it restructures its finances, however.

Opinion & Analysis: What Would the United States Be Without Print?

Many print reporters and publishers are concerned about the ramifications of newspaper closings. Ken Robertson, executive editor at the Tri-City Herald in Washington, told a reporter at Oregon Public Broadcasting that many online news sources do not have the same rigorous reporting standards as newspapers.

Robertson asked, “Do you want Bob down at the corner store making all the decisions about information?” or someone who has spent decades making “intelligent decisions about the information you need and what’s important.”

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