The Financial Times weighs in on the topic of nonprofit vs. for-profit newspapers. Excerpt, discussing the St. Petersburg Times, follows:

"But there are obvious differences between its mentality and that of competitors, who must report to Wall Street. Whereas Tribune and other companies are trying to push profit margins beyond 20 per cent, the Times views that level as an upper limit, and even a warning that it is not investing enough in its core business. Neither does it have to worry about distant owners, or other corporate priorities."

Full article below. Discuss!

Josh Wilson
http://newsdesk.org [1]

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"Poynter Institute points way for newspapers"
By Joshua Chaffin in New York
Published: October 16 2006 20:29 | Last updated: October 16 2006 20:29

http://www.ft.com/cms/s/46f9339a-5d3f-11db-9d15-0000779e2340.html [2]

Talks about the future of the US newspaper industry tend to revolve
around two cities these days.

There is Los Angeles, where staff at the Los Angeles Times last month
rebelled against a distant corporate owner. And there is Chicago, home
to that same owner, the Tribune Company, where a special committee is
considering breaking up the group's newspaper and television
properties to satisfy frustrated shareholders.

But a better place to divine the future of the industry may be
Florida, where the St Petersburg Times has been attracting increasing
attention for its innovative ownership structure. Unlike most US
papers, the St Petersburg Times is not part of a big, publicly held
corporation. It is controlled by a local non-profit foundation
dedicated to the teaching and promotion of journalism.

That distinction amounts to a huge difference in the current newspaper
environment in which decades of circulation and advertising growth
have stalled.

While Tribune's publicly owned papers have made repeated cuts to their
newsrooms to assuage Wall Street's demands for ever-increasing
profits, the St Petersburg Times' private ownership has kept it
relatively insulated.

The paper has poured millions into long-term projects, such as the
launch two years ago of a free weekly paper. It has spent $25m
upgrading printing facilities and plant in the past three years.

Paul Tash, the editor, said: "These are challenging times for
everybody. There are some challenges we face down here at the St
Petersburg Times as well. But we have some great advantages." Other
publishers have taken notice. In Alabama and New Hampshire, newspapers
are trying to recreate the St Petersburg Times's model. It could also
come to Los Angeles. Eli Broad, the wealthy philanthropist who has
expressed interest in buying the Los Angeles Times, has reached out to
the folks in St Petersburg to learn how they do business.

They might also look to the UK, where The Guardian is owned by The
Scott Trust, founded in 1936 by the sons of C.P. Scott, its former
proprietor. Its mission is "to secure the financial and editorial
independence of The Guardian in perpetuity".

In St Petersburg, the Times owes its structure to Nelson Poynter, who
took over as editor and president of the paper after his father, Paul,
died in 1950. Twenty years later, as his career was winding down, Mr
Poynter seemingly had two options: he could sell the paper to a big
corporation, as other family-owned papers were increasingly doing. Or,
he could leave it to his children and hope for the best.

But Mr Poynter, intent on keeping the paper independent and in local
hands, did neither. In 1975, he created a foundation, the Modern Media
Institute, now known as the Poynter Institute, to which he bequeathed
his shares in the Times. Mr Tash said: "Poynter didn't believe much in
heredity. His quote was: 'I haven't met my great-grandchildren, and I
may not like them'."

Under the Poynter Institute's ownership, the Times still has financial
obligations. The paper must turn a sufficient profit to support itself
and send a dividend to the institute.

But there are obvious differences between its mentality and that of
competitors, who must report to Wall Street. Whereas Tribune and other
companies are trying to push profit margins beyond 20 per cent, the
Times views that level as an upper limit, and even a warning that it
is not investing enough in its core business. Neither does it have to
worry about distant owners, or other corporate priorities. Mr Tash
said: "If you're Gannett and Louisville has a bad quarter, someone has
to make it up.".

Reporters say the focus has fostered stability and helped the Times to
rival the Miami Herald as Florida's largest newspaper.

"I've worked at other papers where they're worried about travel costs,
worried about how many notebooks you use, or long distance bills,"
said Wes Allison, a correspondent based in the Washington bureau.

"At this paper, they're worried about going for the story." Not
everyone is convinced that the Poynter system would work elsewhere.
"To use St Petersburg as a role model may belie the challenges that
you face in Los Angeles," said Murray Schwartz, a lawyer at Katten
Muchin Rosenman, who specialises in the newspaper industry. "They're
very different animals."

Mr Tash acknowledged that local ownership can lead to stagnation in
management. The larger challenge to replicating the Poynter model,
though, may be finding an owner who is willing to forego a big payout
and essentially donate the paper to the community.

"What Mr Poynter did to create this was a remarkable act of
philanthropy," Mr Tash said. "Basically, he gave it away.

Additional reporting by Andrew Edgecliffe-Johnson in London

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Editor * Newsdesk.org

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