Making Our Union Stronger in Tough Times: Socially Responsible Ownership Plan Could Revitalize Newsp

The TNG-CWA local at the Peoria Journal Star (Illinois) is exploring a way for employees and other investors to buy the newspaper from the debt-ridden Gatehouse Media corporation.

One promising idea is to form an "L3C," a low-profit, limited liability company that must put its social mission above profit-making. The L3C model, an investment vehicle for foundations, was created only last year. So far only Vermont and Michigan have passed laws permitting them; legislation is pending in at least four more states.

More promising for journalists is federal legislation that would open newspapers up to L3Cs by expanding the definition of charitable giving. A bill not yet introduced is the Program Related Investment Promotion Act.

"We are an industry in decline; we've had 17 layoffs at the Journal Star already this year," said Jennifer Towery, president of TNG-CWA Local 34086. "We are seeking a better business model. We would create a company as an L3C, make an offer to Gatehouse and then go to the community and say, 'We need you to be a bigger part of this paper. We need you to be subscribers and investors."

Letters to the editor and readers' many phone calls and e-mails to newsrooms indicate just how heavily invested people are in their community newspapers. "We'd be capitalizing on the sense of ownership that they already feel," Towery said.

What would they get for their money? Both quality and quantity journalism, she said, with well trained reporters picking up beats that have been ignored and pursuing investigations dropped from newsroom budgets. If there's profit once the social goals are met, investors would get a dividend.

"We're betting that when you operate a newspaper in a way that invests in the product and you don't have that drive for profit, that you'll have the freedom to be more innovative and find new ways to serve your readers," she said.

While citizen owners would be represented on a board of directors, an L3C newspaper model would build a wall between the owner/investors and news and editorial functions. "They would not have editorial control or make editorial decisions," Towery said.

In addition to about 100 TNG-CWA members at the Peoria paper, employees there include about 30 mailers represented by CWA's printing sector.

Peoria isn't the only community where union members are considering an L3C. In the Twin Cities, a TNG-CWA committee is looking at a possible hybrid ownership model at the Minneapolis Star Tribune. It could include an L3C, a workers' cooperative and an ESOP, or Employee Stock Ownership Plan.

"If the business model for newspapers isn't broke, it's pretty close," said Mike Bucsko, administrative director for the Minnesota Newspaper Guild-CWA. "We need to find another way for people to do good journalism, to provide that vital function in a community and have it be sustainable."

"We have to do the work, because the owners have made it clear they won't," Bucsko said. "They have been Nero, fiddling while Rome burns. And now their decision is to panic and just start whacking. We can't sit on the bench and watch the demise of our industry and do nothing to save it."