For Publishers Status Means More Than Yachts

Michael Hedges May 20, 2020 Follow on Twitter

Once upon a time, and not that long ago, business models were a dime a dozen, as they say. And every one was fed by the same "we'll sell advertising" theme. Those days have been drifting into foggy memory for a decade, resigned to history by recession of 2020. Only the publishing hard-bitten still argue that, with a few giant exceptions, the news business will remain a for-profit business. Others are moving on.

Telecom Altice France recently moved to spin left-leaning legacy news title Libération into a not-for-profit foundation. Part of the reason, certainly, is to get the perpetually loss-making off its books and take a healthy tax deduction. Another part would be avoiding criticism for letting it crash and burn. The French may not race to the kiosks to buy every copy of every newspaper, certainly not today, but those steeped in French history and culture are afforded a level of respect as well as support. Blame for allowing a legacy media brand, newspapers in particular, to disappear would be painful and enduring.

According to the announcement an “endowment fund for the French press” is being established to acquire Libération, reported news agency AFP (May 14). “This new structure guarantees Libération its complete editorial, economic and financial independence.” Current debts, reported as about €50 million, will be acquired by Altice France. This endowment fund will be available to other donors, a legal requirement.

Altice France, subsidiary of Altice Europe, principally owns TV news channel BFM TV with several brand extensions, national talk radio channel RMC with several brand extensions and mobile telecom SFR. The publicly-traded company (Euronext) is principally controlled by billionaire investor Patrick Drahi. Libération was principally acquired in 2014 by M. Drahi and rolled into Altice Media France, which holds the television and radio channels.

Foundations and not-for-profit organizations typically have no shareholders. They have board members selected to maintain that special status. There is no business plan; it’s a mission statement. Given the current economic environment, which is expected to continue past the next two quarters, tax deductions have become more enticing than dividends.

Many media watchers view M. Drahi’s plan for Libération as similar to the UK daily Guardian and weekly Observer, owned since 1936 by the Scott Trust, established by the family of founder C.P. Scott. The Scott Trust devolved into Scott Trust Limited in 2008 as owner of the Guardian Media Group. That has paid off handsomely for both newspapers by providing a reliable financial safety net as well as keeping activist investors at bay.

Digital-only French news publisher Mediapart changed ownership structure last year from founder/investor shareholding to a not-for-profit “non-capitalist” foundation Société pour la protection de l’independance de Mediapart (Company for the protection of the independence of Mediapart - SPIM) through Fonds pour une presse libre (Fund for a free press - FPL). While far newer to the French media scene, founded in 2008, left-leaning Mediapart eschews advertising for subscriptions and a hard paywall.

One of the earliest foundation-owned news publishers is the Tampa Bay (Florida) Times, formerly St. Petersburg Times, founded in the late 19th century. It has been owned by the not-for-profit Poynter Institute, through various names, since 1977. The Poynter Institute is associated with the University of South Florida.

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