Thursday, September 24, 2009

S.F. gets biggest-ever local news non-profit

A $5 million grant from a single philanthropist will fund the launch in the San Francisco area of the most ambitious project yet to build a non-profit news organization to fill the growing vacuum left by the contraction of the mainstream media.

San Francisco businessman Warren Hellman today pledged $5 million to kick off fund raising for a new non-profit news organization being developed in partnership with KQED, the largest public broadcasting affiliate in the market, and the Graduate School of Journalism at the University of California at Berkeley.

Hellman said the group is “fairly far along” in discussions to have its reports carried in the Bay Area print edition of the New York Times.

Hellman’s gift will far surpass the funding that has been assembled to date by each of such other notable non-profit local news projects as MinnPost, Voice of San Diego, Chi-Town Daily News and Texas Tribune. As illustrated in the table below, the average funding since inception for the four other non-profit local newsrooms is $2.4 million, according to data provided by each of them.

The San Francisco project evidently is being launched in a manner similar to the Texas Tribune, which was founded earlier this year with an initial gift of $1 million from John Thornton, an Austin venture capitalist. Thornton said in an email this week that he has raised nearly $2.5 million of the $4 million in additional donations he hopes to accumulate to fund the statewide online news site until it can begin generating sufficient revenues to become self-sustaining.

Hellman characterized his contribution to the San Francisco news project as “seed” funding, suggesting the nascent organization will attempt to grow its resources beyond the initial donation. If Hellman’s cornerstone gift can attract follow-on donors to the same degree Thornton has been able to leverage his donation, then the organization’s resources for covering Northern California could rival or surpass the $14 million that has been raised since inception by Pro Publica, the donor-funded nationwide investigative-reporting initiative launched in 2007.

Pro Publica, which is the biggest of the non-profit journalism ventures that have emerged in recent years to fill the void created by shrinking newspaper coverage, has an annual budget of about $9 million to support 32 full-time journalists and 5 administrators, according to Richard Tofel, its general manager.

There could not be a better place than Northern California to gain public support for new ways of reporting and delivering the news, said Hellman in a prepared statement. “The Bay Area has a voracious appetite for news and is one of the most engaged and community-minded regions in the nation,” said Hellman. “We are confident that this is an ideal place to create a new economic model that will sustain original, local, quality journalism, and we believe that the Bay Area will step up to support these efforts.”

Hellman is chairman of Hellman & Friedman, a successful private-equity firm that says it has raised and managed more than $16 billion in the last 22 years to invest more than 50 companies in such industries as health care, software, finance, manufacturing, energy, professional services and media. Its media investments have ranged from Axel Springer to Double Click and from Getty Images to Young & Rubicam.

Hellman’s decision to fund the most ambitious non-profit local news initiative in the nation climaxed a six-month examination of the problems and prospects for local news conducted as a pro-bono project by McKinsey & Co., the international consulting giant.

The study found that “local newspapers have collectively reduced their newsrooms by nearly 50% during the last five years,” according to the press release. “The impact is seen in the number of original, professionally written stories about the Bay Area, which at one major regional newspaper has declined from 100 to 40 stories per day.”

Hellman persuaded McKinsey to conduct the study after he was asked earlier this year to consider coming to the aid of the ailing San Francisco Chronicle, which has reduced staffing in its newsroom several times in recent years in efforts to staunch losses amounting at some points to more than $1 million per week. The Chronicle news staff today numbers some 170 journalists, as compared with a peak of 560 in 2000.

The journey that resulted in Hellman’s bequest got its start in February, when Carl Hall, a reporter who left the Chronicle to join the staff of the Northern California Media Workers Guild, approached Hellman to see if the financier could help the Guild explore the potential purchase of the Chronicle.

While Hall said the initial impulse was to try to find a way to shore up the money-losing Chronicle, he said in a telephone interview that further research indicated “the business model may not be there to put a sustainable, for-profit economic foundation under quality, professional journalism.”

Attention turned to what could be accomplished by a well funded, non-profit newsroom focused on the beat coverage, investigative reporting, enterprise projects and science and cultural reporting increasingly curtailed by economically strapped daily newspapers.

Hall said the depth and scope of coverage planned by the news project is beyond what other non-profit news operations have attempted in places like Chicago, Minneapolis and San Diego. The other operations do solid interpretive, investigative and cultural reporting but do not attempt to emulate what Hall called the “meat and potatoes” coverage historically provided by metro dailies.

While the operators of non-profit newsrooms in other markets say they are functioning on budgets of some $1.2 million or less, the annual budget envisioned for the new San Francisco newsroom is intended to be significantly larger, said Hall. In part, he said, that will be because the operation will be committed to professionalism. “We don’t want volunteer labor,” he said. “The staff has to be decently paid, professional-quality journalists.”

Hall declined to disclose the details of the non-profit’s projected staffing and budget.

The new organization will be influenced, supported and complemented by the radio and television news coverage already produced by KQED and by the efforts of Berkeley journalism students who for several years have operated innovative and well respected hyperlocal websites in places like the Mission District of San Francisco and such neighboring communities as Oakland and Albany.

“I see this new effort to create a high quality, regional and local digital news site that’s sustainable, that's tied closely to very local efforts like the ones the school has launched – and that is built from the ground up,” said Paul Grabowicz, the associate dean of the Berkeley j-school.

“That's one of the main attractions for me,” said Grabowicz in an email. “We're trying to envision what the future will be and create something from scratch to take us there. And hopefully others will be able to learn from what we learn, whether they're existing news operations or brand new start-ups."

Although neither the Chronicle nor the MediaNews Group papers serving most of the rest of Northern California were named as participants in the new non-profit venture, it should not be considered an antagonist to the existing media, said Neil Henry, dean of the Berkeley journalism school.

“This is intended to provide original and meaningful journalistic content in new and engaging ways to help address the shrinkage of news due to the industry's contraction,” he said in an email. “It is certainly more friend than foe to the existing industry in that it seeks to find ways to save local journalism, which is certainly in the industry's interest, as well as the public's.”

Hall said Guild members at the mainstream dailies shouldn’t feel threatened, either. He said new competition in the market ought to encourage the existing media to hang on to the staffs they have – and perhaps consider augmenting them.

“When more people sell ice cream,” said Hall, “more ice cream will get sold and everyone will do a better job of selling it.”


Anonymous Anonymous said...


Until recently, I lived in the SF Area for 15 years. Another liberal attempt at news, epic fail from the start.

6:17 PM  
Anonymous Anonymous said...

Hooray! Yet another left-wing propaganda machine is born!

Forgive me if I go back to sleep.

And when I wake up, I'll be reading the independent blogs, for real news.

9:49 PM  
Blogger King Kaufman said...

Good luck to this venture. It's exciting to hear about. But are Neil Henry and Carl Hall serious at the end there? The existing industry see this as more friend than foe? Really? Like, the Chronicle's going to welcome this competition with open arms because it's an effort to save the industry?

Can I get a hit off that stuff?

The Chron/Gate and others will see this as competition and rightly so because that's what it will be. It would be cool if the Chron's response were to beef up the product rather than cut costs, but frankly that would be a totally new approach for Hearst. If they're going to spend, it'll be on advertising, marketing and maybe lawsuits to try to drive the opposition away.

And Carl, really? More people selling ice cream means more ice cream gets sold? Is that how it works? Then why haven't the automakers just opened up more dealerships? More people selling cars, more cars get sold. Industry crisis solved! Yay!

10:19 AM  
Blogger matt in dc said...

Thanks to the two anonymous posters for the insightful commentary. Every non-commie American knows that NPR and Public TV stations are not to be trusted. Where are the 5-second soundbytes? Where is Lou Dobbs? Where is Glenn Beck? Serious journalists have two volumes only: shouting, and shouting louder. Outlets like NPR and Jim Lehrer let facts and reasoned analysis get in the way of patriotism far, far too often, failing to report (for example) that Obama is a Kenyan-born muslim (despite all "evidence" proving the contrary). All we really need are independent blogs like WND, which are divorced from reality and independent of any standards.

10:31 AM  
Anonymous Anonymous said...

Forgive me for seeming clueless, but is this new non-profit going to offer up its stories to the Chronicle and others similar to the way a wire service does? Or is it going to rely on Web sites for its delivery?

11:22 AM  
Anonymous Anonymous said...

KQED has the largest audience of any of the NPR or PBS stations in the United States. It routinely wins major journalism awards, including Emmies, SPJ awards, Peninsula Press Club and others. Jon Meyers, its Sacramento bureau chief, was posted hundreds of late-night updates during the budget deadlocks of this summer, providing the best information about state government of any media outlet anywhere, including the LA Times. If you prefer Michael Savage or Rush Limbaugh, KQED isn't for you. If you are looking for in-depth news, it is.

9:13 PM  
Anonymous Anonymous said...

Thanks to "matt in DC" for demonstrating so clearly how liberals are intellectually superior in their objective analysis of facts and ideas.
After all, every American knows that anyone who has a thought that strays from the liberal catechism is a backwards redneck, racist son of a bitch. And every liberal has such a well reasoned and natural perspective that is obviously independent of the noise that bounces about the MSM.

What we need is more Olberman, Maddow and Democracy Now, because serious journalism should never get in the way of a political agenda.

What we need in order to elevate the public discourse are more stereotypical, broad brushed caricatures of our neighbors.

10:44 PM  
Anonymous OMG chronicles said...

Hellman said the group is “fairly far along” in discussions to have its reports carried in the Bay Area print edition of the New York Times.

I hate to say it but ... no one wants news from newspapers anymore. I know: I work in one in the Bay Area and our circulation, like every other newspaper's, is going down, down, down. And layoffs have meant that I now do what four people did just five years ago — for less, with unpaid furloughs.

I'm glad to see that many believe, as I do, that reporting local news is a newspaper's most important job. It's easy to read about international and national news online and get it from various viewpoints, but what happened at your town's city council last night? Not likely. But if Pew's research is to be believed, then fewer and fewer care about getting news from print; they want news online and from TV.

Seems to me that Hellman et al. are just trying to re-create a print system that isn't working. I wish them luck, though. And ... can I get a job?

9:27 AM  
Anonymous Perry Gaskill said...

At the risk of going off-topic, here's a question for the Newsosaur: What is it with Berkeley, anyway? What I mean is that as newspapers go into the tank, and the craft of journalism itself is under serious threat, we're hearing thoughtful academic voices coming from places such as Harvard, USC, Columbia, and CUNY. Even Medill at Northwestern is starting to play around with the idea of bringing computer coders into the news-gathering loop.

And you have to ask yourself: With the exception of you, where's UC Berkeley? Why is it not on the radar? It's even more of a mystery given the school's proximity to both Silicon Valley and the VC mavens on Sand Hill Road in Palo Alto. I don't get it.

Therefore, there's no way of knowing if Hellman's funding is going to be money well spent, or if it's going to be just another non-starter model with a bunch of reporters on a perpetual trek to the charity well. A trek which is not part of a sustainable business but instead the equivalent of a journalist's soup kitchen. People such as Hellman should be applauded, but you sometimes have to wonder if the money spent shouldn't go towards developing tools for sustainability, EveryBlock is one example, instead of simply paying for operations.

I also don't care if Rush Limbaugh is a hero of Western Civilization, or if KQED is the fount of everything well considered. All that is beside the point. What we need is a sanity check on the accepted wisdom of how we provide for a variety of voices. And if we can't do that, it does not bode well for the republic.

Ending soapbox in... 3... 2... 1...

12:42 AM  

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