A year of consolidation in nonprofit news

The year 2024 is likely to witness a significant evolution in the landscape of nonprofit journalism. Despite the maturation in journalistic practices, the business side of nonprofit journalism remains underdeveloped. The over-reliance on philanthropy, which is not a panacea for financial sustainability, continues to pose challenges. Many nonprofit news organizations struggle with limited resources, hindering their ability to employ full-time staff dedicated to essential business functions such as marketing, product development, technology integration, human resources, finance, accounting, and revenue generation. This resource constraint perpetuates a reliance on fractional services that, due to their divided attention across multiple clients, are unable to prioritize the unique needs of individual organizations.

In response to these challenges, I anticipate 2024 will be be a year of increased consolidation within the sector. Mergers, acquisitions, and joint-operating agreements will become more prevalent among nonprofit news entities. This trend is fueled by the need to combine resources, share expertise, and broaden audience reach, culminating in more financially stable and operationally effective organizations.

Mergers and acquisitions are set to be the most prevalent form of consolidation. There are plenty of precedents. New Jersey’s PBS station, WNET, acquired NJ Spotlight in 2019 to boost its local public-affairs coverage. Colorado Public Radio’s acquisition of Denverite from Spirited Media in 2021 and WBEZ’s 2022 acquisition of the Chicago Sun-Times, creating a major nonprofit news entity, are other notable examples. Detour Detroit’s merger with Outlier Media, Pew’s Stateline joining States Newsroom, and Mother Jones and Reveal’s just-announced merger further exemplify this trend.

Another viable consolidation model for nonprofit news organization to consider is the joint-operating agreement (JOA). Rooted in the Newspaper Preservation Act of 1970, JOAs allowed competing newspapers to merge business functions while maintaining editorial independence, circumventing certain antitrust laws. These agreements were initially designed to capitalize on economies of scale in a shifting media environment. Although the prevalence of newspaper JOAs has declined significantly since their heyday, the model can be relevant for modern nonprofits.

For instance, the Center for Public Integrity (CPI) transitioned from relying on external vendors for financial services to hiring an in-house accountant, thereby improving financial management. However, this necessitated a trade-off, postponing the hiring of a product development engineer. This scenario underscores the potential of a JOA in the nonprofit sector. CPI could, for instance, form a JOA with another nonprofit, sharing financial management expertise in return for product or technology development support. This would alleviate the need for external vendors and foster a mutually beneficial partnership, optimizing resources while keeping each organization’s mission in focus.

These developments indicate a growing inclination towards consolidation as a strategic solution to the challenges in nonprofit journalism. In 2024, we can expect an increase in such cooperative endeavors, leading to the formation of larger, more resilient nonprofit journalism entities. These organizations are likely to be better equipped for sustainable operation and impactful journalism, navigating the intricacies of a still-developing business model.