Chicago news co-op starts on a shoestring

While the editors of some notable non-profit news startups pull down hefty six-figure salaries, the founding editor of the Chicago News Cooperative says his pay will be a single digit for the next 12 months: $0.

That low, low introductory salary in part is testimony to the dedication of co-op founder James O’Shea, a lifelong Chicago newsman who had a brief tour as editor of the tempest-tossed Los Angeles Times before, as he put it, “I was generously given the opportunity to spend more time with my family.”

But O’Shea’s decision to work without pay for a year also reflects the fact that his ambitious news start-up is funded far more thinly than any of the high-profile news projects that have launched in recent months.

To date, O’Shea has raised a single $500,000 grant from the Chicago-based MacArthur Foundation to field a modest staff of “about 10” full-time reporters, plus freelancers, that he intends to deploy to cover city, county and state government and politics, as well as education and cultural affairs.

Although O’Shea is working for free, the rest of the staff – which includes such former Chicago Tribune stalwarts as business columnist David Greising and City Hall correspondent Dan Mihalopoulous – will get full-boat wages.

“I did not take a cut in pay to come here,” said Greising in an interview. “But I came because I would have eaten my heart out if I had stayed at the Tribune and this thing proved to be a success.”

Assuming a staff of 10 full timers costing an average of $135,000 apiece per year (counting benefits, equipment, office space and other overhead), a quick calculation suggests that $500k would cover operations for barely a third of a year. Throw in a decent freelance budget and the runway gets shorter.

The amount of money O’Shea has assembled to launch his project is dwarfed by the $30 million backing the Pro Publica non-profit investigative venture, the $5 million in seed funding committed to the nascent Bay Area News Project in San Francisco and the approximately $4 million raised by the newly launched Texas Tribune.

O’Shea, who not surprisingly spends the bulk of his time these days seeking additional support from individuals and foundations, is by far the worst paid among his peers. The editors of Pro Publica and the Texas Trib respectively make $570,000 and $315,000 per year; staff hasn’t been hired yet for the San Francisco project.

Unpaid labor is not unprecedented in the realm of journalism start-ups. Joel Kramer says neither he nor his wife has ever been paid for their full-time commitment to launching and running the 2-year-old MinnPost. Solo operators say they are toiling without pay from Seattle to North Carolina.

The Chicago project has more going for it than the initial grant and O’Shea’s pro bono services.

It has landed a contract to begin providing on Nov. 20 two pages of local content two days a week for the Chicago edition of the New York Times. O’Shea declined to detail terms of the NYT deal in a telephone interview, but he did say that an exclusivity provision in the contract forbids sharing the content produced for the Times with any other print publication in Chicago.

The news start-up, which O'Shea co-founded with book publisher Peter Osnos, also has established content-sharing relationships with two public broadcasters in the market, WTTW and WBEZ. And it will benefit from such things as free legal work and six months’ worth of free office space from Winston and Strawn, one of the city’s top law firms.

O’Shea is the first to agree that there’s lots more to be done to get to his target of $8 million to $10 million in non-profit funding. “I have enough money in the bank to produce content for the New York Times for a year” if the co-op sticks strictly to fulfilling that contract, he said.

But he needs more money to launch a hoped-for website and to broaden output beyond the articles produced for the Times. “I am closing in on enough money to get the website off the ground early next year,” he said. “But there is no big donor at this juncture. If you know anyone with $5 million, have them give me a call.”

O’Shea has a long-term plan to wean the project off philanthropic funding by recruiting at least 30,000 individuals to pay $2 per week to subscribe to the co-op. He hopes subscribers will be enticed by the novel social networks he plans to establish at the website. The networks would work like this:

Readers interested in particular subjects – ranging from education to the Mideast peace process – could organize discussion groups, forums and activities among themselves, said O’Shea.

“If they don’t like the coverage they are getting, they can write their own op-ed piece,” said O’Shea. “If they would like to see some reporting we are not providing, we would introduce them to editors and writers” who could produce pieces commissioned by the news community. “For each service,” said O’Shea, “we would change members a small fee.”

O’Shea was the managing editor of the Tribune before being tapped as one of a rapid succession of editors at the Los Angeles Times during a period of repeated and increasingly painful cost-cutting. When he declined to cut any deeper on his watch, he was forced out in early 2008.

That led to a period of rest and reflection at the Shorenstein Center at Harvard University, which in turn prompted O’Shea to join a number of like-minded individuals in Chicago over the summer to launch what became the CNC.

“This isn’t a job,” he said. “I was a journalist all my life and this is a continuation of what I was doing. I am trying to help out with what I know and with my passion for the business.”