Trust ownership and the Future of News: Media moguls and white knights

This article was written for the Walkley Magazine October 2014

The Australian one-dollar coin is a symbol of mainstream media ownership. On one side are the crown-owned public service broadcasters and on the other are one very large and several smaller corporate kangaroos.

On the face of it, the coin analogy seems obvious because news media are seen to be either in the hands of the government or the property of profit-seeking private enterprise. But how many sides does a coin have?

The answer, of course, is at least three, and the edge is emerging as the surface that may offer alternatives to cope with the changing economics of serious journalism. And, like the edge of the one-dollar coin, those alternatives are variegated.

I began research for my new book Trust Ownership and the Future of News: Media moguls and white knights after a long career spent entirely in commercial media. As editor-in-chief of metropolitan newspapers I saw at first hand the accelerating crisis into which the industry was descending throughout the English-speaking world and beyond. I began to harbour fears that the commercial model would not sustain serious journalism as it had for the generations – like mine – that had bathed in the rivers of gold.

Three things became obvious. The first was that it would be dangerous to rely largely on state-owned media because, although they play a vital role in the pursuit of serious journalism, their reliance on government funding rendered them vulnerable to the hand that feeds them. The second was that some commercial media organisations were capable of sustaining serious journalism – so long as their investors were willing to allow it. And the third was that those in power would be held to public account only by structures that amass and inform large numbers of voters and consumers.

The final point suggested to me that, while the emergence of investigative units – like ProPublica in the United States, the Bureau of Investigative Journalism in London and Sydney’s Australian Centre for Independent Journalism – were highly encouraging, they relied on existing mainstream media for much of their impact. The need, therefore, was for alternatives that were capable of sustaining mainstream media organisations.

I looked at co-operatives but was put off by the fate of Le Monde. Willaim Randolph Hearst (and a string of other examples) made me wary of the sole proprietor. State subsidised private media seemed almost as financially vulnerable as state-owned broadcasters. Philanthropic funding offered possibilities but there were issues of scale. Could trusts provide an answer?

At least three newspapers with formidable reputations are owned by trusts or, more correctly, trust-like bodies. They are The Guardian, the Irish Times in Dublin, and Florida’s Tampa Bay Times (formerly the geographically confusing St Petersburg Times). The Guardian was handed to the Scott Trust in 1936 as a protection against death duties, while the Dublin newspaper was sold to a trust company to avoid possible takeover in 1974. In 1978 Nelson Poynter bequeathed the U.S. publication to the educational institute that now bears his name.

They are set apart from ‘normal’ news media by a number of factors, not least of which are the binding obligations of their articles of association (see panel). Each business also operates on the premise that its first obligation is to sustain its primary publication rather than return profits to investors. The Tampa Bay Times company has paid dividends to finance the Poynter Institute but during the recession has been released from that obligation to sustain the newspaper. With minimal debt, each is a sustainable business.

None of the operations is perfect: The Guardian runs at a loss and has been subsidised by other operations in the Guardian Media Group; few of the Irish Times trustees have media backgrounds and none is a journalist; and Nelson Poynter’s edict gives the chairman of the Times Publishing Company unrivalled power.

The Global Financial Crisis has been no kinder to these newspapers than to others and there have been budget and staff cuts. In each case, however, core editorial functions have been preserved. The Guardian and Irish Times have maintained their networks of foreign correspondents and The Guardian has established online operations in the U.S. and Australia. Florida is one of the states hardest hit by the GFC but the Tampa Bay Times increased its circulation area and increased the size of its investigative unit (it won Pulitzer Prizes for its coverage of the Church of Scientology, which its Florida-based).

Trust Ownership and the Future of News does not claim that trust governance is a magic formula that will sustain serious journalism in perpetuity. As always, the devil is in the detail. It does, however, have advantages that allow private sector ownership – and the disciplines of commercial operation – if corporate investors no longer regard serious journalism as a business in which they wish to put their money.

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