MIAMI — June 15, 2016 — A report released today offers an in-depth view into a new model being piloted for sustaining strong local journalism. The report “Could It Be Sunny in Philadelphia?” profiles the transition of ownership of the Philadelphia Media Network – parent company of The Philadelphia Inquirer, Daily News and Philly.com – to a new nonprofit that is designed to promote innovation and sustainable forms of journalism in Philadelphia and beyond.

Produced by the John S. and James L. Knight Foundation and authored by digital media consultant Tim Griggs, the report provides important lessons for newspaper owners, publishers and funders exploring new models for journalism in the digital age.

In January 2016, owner H.F. “Gerry” Lenfest donated the Philadelphia Media Network along with $20 million to launch the Institute for Journalism in New Media, a new nonprofit housed at the Philadelphia Foundation. In addition to supporting news providers in Philadelphia, the institute aims to foster wider impact in the field by advancing public-interest journalism, digital experimentation and research.

Helping to reinforce these wider lessons, the report draws from more than 30 interviews with industry thought leaders and key players involved in the creation of the institute, and its unique structure, which combines a nonprofit with a for-profit model. In addition to the Philadelphia arrangement, it examines a variety of nonprofit news frameworks, offering insights and alternatives to current models in journalism and the challenges these news organizations face as they look to the future.

“There are tons of interesting insights and unique components here – whether or not you believe these experiments will ultimately succeed – that could be applicable to others looking to make a bold move for their own survival,” said Griggs, author of the report and former publisher of the nonprofit Texas Tribune and strategy and product executive at The New York Times. “Our goal was to surface those lessons and flag ideas to share with the rest of the local news and news funding ecosystem.”

“Given the widespread struggles local journalism faces, the Institute for Journalism in New Media’s novel financial model represents an important experiment. Like any good experiment, it’s important we document the hypotheses, approach and results to generate useful insights for other funders and news organizations exploring changing news environments in their own communities,” said Jon Sotsky, Knight Foundation director for strategy and assessment.

While the report acknowledges that the Philadelphia Media Network is complex and still in its early stages, it highlights potential lessons that can be learned from its structure and evolution. For example:

· Exploring new structural models: The institute was created as a nonprofit, grantmaking organization, but many other options exist for news organizations looking to restructure, including direct conversion from for-profit to nonprofit, selling to a foundation, creating a charitable trust and ownership by a school or other existing nonprofit organization, among others.

· Finding a measure of stability: News organizations looking for more stable models can learn from the Philadelphia Media Network example. The new arrangement minimizes profit expectations and makes it less likely that the company would be sold or dismantled by profit-seeking owners.

· Embracing journalism in the public interest: The Philadelphia Media Network converted to a public benefit corporation, a legal designation permitted in some states that allows its leadership to more closely consider public-interest concerns.

· Crafting new avenues to funding: The institute is housed under the Philadelphia Foundation. This partnership, and the institute’s designation as a limited liability company, allows it to seek philanthropic support easier than for-profit news companies.

Since the arrangement in Philadelphia is new, the report also explores the challenges that lie ahead, encouraging other news organizations to be proactive in addressing similar issues. Among them:

· Build a world-class team: Beyond structural changes, new organizations need to focus on talent to be successful. In the case of the institute, the board needs to be expanded, and it needs to work through governance issues.

· Cultivate new donors: The initial endowment of $20 million (which has since grown) provided seed funding for the institute, but the organization’s future hinges on finding additional funders.

· Manage expectations and build an institutional strategy: The institute needs to be clear about what it will (and will not) fund and set priorities.

· Develop guidelines to ensure editorial independence: In dealing with funders, the institute and the Philadelphia Media Network will need to address the potential for conflict and undue influence and meet public demands for transparency and disclosure.

· Innovate: To be a success, the Philadelphia Media Network needs to focus beyond structure and experiment with new audience engagement and digital media techniques.

“Philadelphia is lucky to have H.F. ‘Gerry Lenfest,’ such a generous and committed civic leader who believes so strongly in the role of journalism in serving the information needs of communities,” said Jennifer Preston, vice president for journalism at Knight Foundation. “We need to embrace and learn from this creative venture to help keep local journalism strong and speed up the pace of innovation.”

Support for the report forms part of Knight Foundation’s efforts to advance excellence in journalism and to help news organizations inform people in communities of all sizes through experimentation, innovation and leadership. Knight has made many investments in this area, including the $5 million Knight Local Media Initiative, which has supported more than 50 online news sites around the country. 

See the full report here: http://kng.ht/1rbBXQ1

About the John S. and James L. Knight Foundation

Knight Foundation supports transformational ideas that promote quality journalism, advance media innovation, engage communities and foster the arts. The foundation believes that democracy thrives when people and communities are informed and engaged. For more, visit knightfoundation.org.

Contact:

Anusha Alikhan, director of communications, John S. and James L. Knight Foundation, 305-908-2646, [email protected]