Mission-driven collaboration and creative financing—including a foundation-backed loan guarantee—helped keep Colorado Community Media in local hands last month, as the National Trust for Local News (NTLN) and The Colorado Sun joined forces to purchase and operate 24 weekly and monthly newspapers.
The entrepreneurial move pushes Colorado journalism again to the forefront nationally, while highlighting a novel way for philanthropy to play a role in helping to keep local news in local hands. Impact investors and operators shared their “story behind the headlines” at a panel discussion hosted by CMP on May 25.
Watch now, or read the recap below.
National Trust CEO Elizabeth Hansen Shapiro explained why Colorado in general and CCM in particular were at the top of her list for NTLN’s first investment.
“Collaboration is really baked into the Colorado ecosystem, and that to us was the most important piece,” said Shapiro. “Also (with Colorado Community Media) these are 24 papers that have been profitable, they have strong advertiser relationships, they have strong brands, they have strong readership—so we felt like this is a perfect test bed for us to work with an incredible group of funders and partners, and really roll up our sleeves and figure out this model.”
Colorado Media Project Director Melissa Davis shared that the CCM properties were among at least 44 Colorado newspapers identified by CMP and the Colorado Press Association in a 2019 study as “in transition,” with owners nearing retirement age or otherwise looking to sell or exit the business.
“That number stood out to us, both CMP and CPA, as a major, major issue—and an opportunity. What would happen to these papers when their owners retired? While the business model for local news is struggling, most of these papers are still modestly profitable small businesses—so who was waiting in the wings, to step up as buyers?”
Nationwide, Davis said, the answer to date has been unsatisfactory: Hedge funds like Alden Global Capital, which owns the Denver Post and 17 other Colorado papers, have a bad reputation of “stripping newsrooms for parts”—selling the hard assets, firing journalists—and leaving communities with far less than they deserve. Another bad option is these trusted local brands—some of them over 100 years old—simply close up shop, leaving news deserts.
Local and national impact investors came together with NTLN and The Sun for the CCM deal, in order to help ensure a different outcome. Shapiro shared this illustration to visualize the CCM deal and involved partners:
Sue Dorsey, Senior Vice President for Finance and Impact Investing at Gates Family Foundation, said that Gates’ history of support for local journalism and familiarity with foundation-backed loan guarantees helped the Foundation lead due diligence and negotiate terms that other impact investors could easily support. And, she said, alignment with Gates’ mission as a place-based funder was a key factor.
“I personally see the impact every week, when my local paper, The Canyon Courier, arrives,” Dorsey said. "I read it cover to cover, because nowhere else can I get information on the local water district, local schools, fire mitigation issues."
It was this vital community service role that also resonated with The Colorado Trust, a foundation working to advance health equity statewide. Chief Financial Officer Danielle Shoots said that local journalism’s role in fighting misinformation and holding powers to account was directly aligned with the Trust’s mission to build power within communities to drive change toward equity.
"It starts with narrative and language and (access to) information—so this is incredibly important to us, and very aligned with what we do,” she said.
Shoots and Dorsey also encouraged more foundations to consider impact investments like their loan guarantee to the Trust, which in effect allowed the foundations to leverage the 95% portion of their assets toward mission, rather than be satisfied with the 5% annually that goes toward their charitable contributions.
Jason Alcorn, Vice President of Learning and Knowledge for the American Journalism Project, said that AJP joined local funders in backing the deal as a learning opportunity, aligned with his organization’s mission to “establish and sustain journalism as a public good.”
“This was an easy decision for us, frankly,” Alcorn said. “The Trust has this incredible idea that there’s a path, a new option and a future for local community newspapers if the right conditions for success exist—if there’s a really strong, digital operating partner who can help bring these outlets into the future of serving their communities in important and powerful ways. And if there’s a really robust philanthropic ecosystem to support them, and to help them solve these really challenging, exciting problems of serving communities.”
The discussion can be seen in full on CMP’s Facebook page.
Colorado-based foundations and impact investors interested in learning more about this innovative approach to supporting local journalism can contact Melissa Davis at Gates Family Foundation/Colorado Media Project; others operating nationally or elsewhere can directly contact Fraser Nelson at The National Trust for Local News.