Michael Kinsley has offered his insights into what type of ownership model is preferable for a newspaper. He discusses how US newspapers often used to be owned by "grandees: wealthy and civic-minded individuals or families," but many of these sold out to large chains. As newspapers make less money, these chains cannot afford to keep them, so Kinsley considers whether ownership by a 'grandee' or a nonprofit foundation is the solution.

"Which will be most likely to provide the combination of financial security and editorial freedom that newspapers need?" he asks. Having experience of both different arrangements, he believes that "being owned by or dependent on a nonprofit foundation is the worst possible solution." Kinsley was editor of Harper's Magazine when it was set up as a non-profit foundation with money from the MacArthur Foundation. He reported to the board of directors, and had to comply with their "ruthlessly conventional views" and the tendencies of their friends to "take offense at any attempt to be interesting." He mentions that he had to publish a board member's wife's poetry.

Google CEO and chairman Eric Schmidt has told the Financial Times that the company had considered buying a newspaper or supporting news businesses seeking non-profit status but that it is now unlikely to pursue either option. Speculation that Google might consider such a purchase has been rife for some time, and a feeling has emerged among some publishers that Google has a sense of duty towards newspapers, as its Google News product is entirely dependent on newspaper content.

Schmidt explained to the FT, however, that having looked into the possibility, the search engine was "trying to avoid crossing the line" between technology and content: "we have done well by letting content people do content in their own terms and in their own way." Google has concluded that any potential acquisition targets were too expensive or carried excessive liabilities.

With regards to any interest in the New York Times, Schmidt would not comment. Google was offered the 20 % stake in the company that is currently held by hedge fund Harbinger Capital Partners: the stake which billionaire David Geffen was reportedly after. Schmidt did comment that Geffen would be an "excellent owner," but added that he did not know "what David is up to."

What Google is doing to help

Former industry analyst and media commentator Lauren Rich Fine wrote a strong criticism of the growing consideration of not-for-profit status as an option for newspapers. Last week she took part in the Duke Conference on Nonprofit Media, where she saw her role as "to remind everyone that the business model wasn't working and that philanthropists don't typically give funds to organizations that have yet to find stability."

Rich Fine believes that the best way to preserve good journalism is to "let the market figure it out on its own." She asserts that successful not-for-profit start-ups such as ProPublica or MinnPost are surviving not because of their philanthropic support, but because of their "entrepreneurial spirit and lean cost structure, two things most newspaper companies are lacking."

And indeed, many non-profit news outlets are online-only, with few staff and frequently concentrate largely on investigative journalism, meaning that their costs are low and they are more likely to attract funding as their reporting falls clearly within the public interest domain. Supporting a newspaper through donations would be a far greater challenge.

In advance of a of gathering at Duke University's Sanford Institute of Public Policy for a series of working sessions to explore new models for non-profit ownership of media, Penelope Muse Abernathy has prepared a background paper examining four distinct non-profit options for the New York Times. Abernathy holds the Knight Chair in Journalism and Digital Media Economics at the University of North Carolina, Chapel Hill.

The NYT's financial situation

Abernathy starts by describing the New York Times' "unique" financial situation. For the last decade, its assets have been impressive, with a dual revenue stream from advertising and circulation that totalled $1.7 billion in 2008. In recent years, the New York Times Media Group has received 55-60% of its revenue from advertising, 30-35% from circulation and the remainder from other sources such as syndicating content. This is significantly different from that of many other newspapers, which typically count on advertising for 80-85% of their revenue.

Both advertising and circulation rates for the print edition of the Times are among the highest in the print industry, leading Times executives to speak of a 'virtuous circle' or cycle: premium content attracts a premium audience willing to pay a premium price, and hence advertisers are willing to pay a premium rate, which is then reinvested to continue producing the premium content.