Friday, November 06, 2009

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.”


Anonymous Anonymous said...

There has to be a middle ground between founders making zero and mid six figures. Don't see how either the low or high number works, unless the high-paid guy or woman knows something the rest of us don't.

7:23 AM  
Anonymous Anonymous said...

I agree. On this model, only the independently wealthy can afford to do this. Last I read the average journalist made $32,000. Where are these huge numbers coming from?

10:06 AM  
Anonymous Michel Marizco said...

Working for free is a hobby, not a business model. These guys are going to turn journalism into a past-time for the rich.

10:07 AM  
Blogger Ryan Williams said...

And what does this do to the aspiring young journalist? When we have rising costs and lowering stability, how are any of us who once hoped to work in news supposed to find a path where we have to write grants and rely on public funding cycles to stay employed?

I graduated J-school a few years ago, and at age 30, I can't find a middle ground between zero-pay internships with no future, and jobs looking for 30 year newspaper veterans to do entry level reporting.

10:10 AM  
Anonymous Johnny said...

Nevermind the editors salary. That's a lot of money to spend on reporters! I hope some of that start-up capital goes into software development.

How does a Chicagoan like myself get in touch with this new media start up?

11:19 AM  
Blogger Pelham said...

The forums that O'Shea talks about don't sound very original. There are tons of sites already where you can do the same thing.

The medium really is, to a great degree, the message. And newspapers--which are still profitable, by the way--will remain the medium that counts well into the future, simply BECAUSE they're exclusive media that, even with diminished circulations, set the daily news agenda.

Foundation-funded Internet startups, by comparison, are dicey, if not ephemeral, propositions. I've yet to run across one with a decent business model. While they're establishing an important niche in the public consciousness--notably as critics of the mainstream media--they'll never attain the prominence of newspapers, if only because there will be millions of news/opinion Web sites out there, each additional one diluting the value of all the others.

2:37 PM  
Blogger Steve Outing said...

Re: the high salary of Texas Tribune's CEO/editor, Evan Smith, I know from a conversation with VC and founder John Thornton a while back that his intention was to pay all the staff well in order to attract the best and the brightest. So while Smith's salary may raise eyebrows, unless it's changed the Texas Tribune reporters are making decent money, too.

6:14 PM  
Anonymous Anonymous said...

This reads like a puff PR piece for the O'Shea boys.

Let's ask some tough questions:

- What "product" is this thing going to deliver besides content to fill a few New York Time pages every week?

- Is there a huge market for Warren's musings, Greising's iconic views on business and McGrath's pithy comments on Chicago sports?

- So they produce a couple of pieces a year on some City Hall guy stealing from the public cookie jar. That's fine charity work. But in the long run who cares?

- Where is the business model that shows this can work? If the present newspaper/web engine doesn't generate the sustaining revenue, why should this?

- Chicago doesn't need another news outlet. And this has the same problem that any news delivery function has: you can only give a consumer what you produce, not what they want. They key is talored content to an audience that will pay for it. How will this operation do that?

8:07 AM  
Anonymous Anonymous said...

You know, in the past few weeks I've stopped worrying about the future of journalism. There is finally enough churning of ideas and opportunities that I am feeling more confident in the next few years a variety of successful examples will be around.

That doesn't mean I'm not worried about my own paper ...

But I'm less worried about the future of the field.

8:10 PM  
Blogger Unknown said...

"Chicago doesn't need another news outlet" isn't a tough question. It isn't even a question. That's not intellectual toughness; it's reflexive cynicism. Is there a market for what O'Shea is going to produce? Well, we can test that two ways. We can post a comment saying there isn't one. Or we can go into the marketplace and find out for real.

9:13 PM  
Anonymous Anonymous said...

The editor of Pro Publica makes $570,000 per year...Wow.

6:06 AM  
Anonymous Veteran Newspaperman said...

The dangerous problem is that readers of this worthy venture will only read material on topics that "interest" them. Our business job has always been to entice, woo or otherwise get readers to read what's vital to an informed public to make good jusgments nabout politics, international affairs, science, culture, health care --all of it.
Veteran newspaperman

12:44 PM  
Anonymous Anonymous said...

Veteran Newspaperman, you are a part of the problem and not a part of the solution.

You see your job as that of steering an insensible, moronic public towards the enlightenment of your personal opinions.

In reality, a very intelligent public would rather be able to see the raw facts, and make their own judgements.

Hence, your opinionated lecturing approaches zero market value. We, the people, want data -- not your biased thoughts.

1:01 AM  
Anonymous Anonymous said...

I think it's unconscionable for an editor of a new struggling media organization, especially one using foundation grants and public appeals for funding, to make more than 200k per year.

9:33 AM  
Anonymous Anonymous said...

When you think about it, it's really hysterical.

O'Shea is putting out a shingle that says 'Buy News Here."

If it weren't for the New York Times old tried idea and their need for copy, he would have no market.

It's just an ego thing for O'Shea. People aren't exactly buzzing around Chicago waiting for his boys' view on the news.

Sure, he'll take some punches at the Trib that bounced him and he will have some glee as they will be forced to follow one of his exclusives.

That's all inside baseball though.

He'd love to be the first cooperative to win a Pulitzer and then toast it all at Shaws.

9:53 AM  
Anonymous jimmy said...

Many people see technology as a solution to some of the problems that exist on our planet. It’s true that technology can be used for good, but with new developments come new challenges issues. The digital divide is one such issue, one that people are actively trying to overcome

1:59 AM  

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