Monday, December 1, 2008

Poynter's St. Petersburg Times model not an easy solution for newspapers

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. Read more about Journalism >>

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?


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