With newspapers facing layoffs and financial woes, many journalists are wondering if the 'Poynter business model' for its paper, the St. Petersburg Times, offers a solution. However, the model is not as easily adaptable to others.

"We're aware of the structure and how it's special," says Neil Brown, Executive Editor of the St. Petersburg Times. He calls the paper "a jewel of American journalism."

In his will, founder Nelson Poynter gave the designated successor of the Times Publishing Company the sole authority to vote on shares and the exclusive power to name his own successor. This person would not receive direct financial benefits but would have complete control over the newspaper, the Poynter Institute (which teaches journalism), and his/her salary. Paul Tash currently holds this position, deciding how much money goes to the Institute and serving as the editor of the Times, chairman and CEO of the Times Publishing Company, and chairman of the board of trustees of the Poynter Institute.

According to Tash, contrary to common perceptions, the company is "private, for-profit." The Poynter Institute owns the shares of the Times Publishing Company, which owns the St. Petersburg Times, Congressional Quarterly, and several smaller publishing ventures. In reality, the Poynter Institute is dependent on the St. Petersburg Times' profits for its own funding. Thus it is still dependent on newspaper market trends, although these are mitigated by the fact that the sole owner can decide on the distribution of the available funds.

So, in order to fund the Institute's programs, the goal is to keep the profit margin of the Times above 10%, which is about half of what most newspaper companies demand. 

Even so, the Times is still facing financial problems. It hasn't met its goal in the past 2 years and has cut about 10% of its newsroom staff in the last year.

So is the Poynter model applicable to other papers?

Large newspapers may have trouble applying the Poynter model, especially if they are under individual or family control. Ownership would have to be willing to give the paper away, relinquishing a significant amount of money and notions of dynastic control. Proposals to transfer ownership to a nonprofit institute would probably meet strong opposition from the bondholders, bankers, and fellow investors.

Family-controlled but publicly traded newspapers such as The Washington Post and The New York Times would find it even more complicated to transfer control to a nonprofit entity than to a private owner.  

Frank Blethen, whose family has controlled The Seattle Times for five generations, calls the Poynter experiement a "pleasant campfire tale." "But the key point why you won't see it again...is that you have to give up most of the value in the organization, and it's very rare for a family to do that," he says. "On a local and regional level, independent newspapers are still a nice business, with eight, ten, twelve percent returns. It's the big public ownership model that's falling apart."

Source: CJR