Media co-ops: Taking a risk for independence

Media co-ops are dangerous places for journalists to invest and to work, according to the former editor of The Journalist Tim Gopsill. As communities look to reinvent local media...

Media co-ops are dangerous places for journalists to invest and to work, according to the former editor of The Journalist Tim Gopsill. As communities look to reinvent local media in the face of declining readership, rising production costs and stalled advertising revenue, he warns of the pitfalls of mixing editorial and business functions and of getting too big.

But co-operators say his analysis is outdated and based on experience of poor management. Media co-ops are finding new ways of linking editorial and business departments and balancing the books, they say, and saving jobs and supporting quality journalism in the process.

Dave Boyle of the Community Shares company, author of Good News: A co-operative solution to the media crisis, does not recognise Mr Gopsill’s characterisation of media co-ops. “We’ve come a long way since the days of the Scottish Daily News and the News on Sunday,” he says. “These two media co-ops are used as examples of some of the worst co-ops in British history.

“They both lacked business management and fell apart soon enough. That’s why the Co-operative Enterprise Hub was set up, to ensure co-ops had the business skills to be successful.”

He agrees that commercial viability is challenging, but adds that this applies to all media businesses. “Finance is difficult for anybody in the media industry,” he says. “It’s entirely reasonable for people to be worried about the sustainability of a media co-op, but they should be worried about a media company by the same token.”

Well-established media co-ops have developed financial models that work and are sharing their experience. Rob Harrison, co-editor and director at Ethical Consumer, says: “Ethical Consumer turned a corner financially when it converted from a workers’ co-op to a multi-stakeholder co-op in 2009.

“We brought in two non-executive directors on to the board with mainstream publishing experience. One was from Dennis Publishing and another was an internet technology consultant.

“It also allowed us to re-capitalise by issuing share capital to our readers, whose desire to back us financially brought in more than twice the original amount we were seeking. In our experience, not all co-operative forms are equal when it comes to publishing.”

New Internationalist, a workers co-op boasting 40 years of independent publishing, invests in in-depth reporting “because a well informed population is crucial for a functioning democracy”.

Jo Lateu, its editorial support co-ordinator, says: “Media co-ops can be financially viable – or at least, as financially viable as any other media outlet. From the beginning, we realised that, for all our radical ideals, we would flounder if we didn’t have a solid financial footing.

“We chose to eschew advertising as a main source of income, instead building up a solid subscription base. We encouraged our subscribers to pay by direct debit, in the days when this was still unusual, to enable us to plan our finances. This helped us to ride out recessions and invest in our future.

“We now have around 20 staff. Our experience has led us to believe that expanding beyond this would create challenges to the way we currently work, for example all taking part in weekly co-operative meetings. And we continue to work as an equal-pay workers’ co-operative.

“We’re facing the same challenges as all print media, but we believe that the co-operative principles to which we adhere, far from hindering us in our mission, unite us and make us more likely to survive in an increasingly challenging environment.”

Paul Wood, managing director of the West Highland Publishing Company, which produces Britain’s first employee-owned newspaper, the West Highland Free Press, says journalists should not be afraid to invest. “If you get something for nothing you don’t appreciate it,” he says.

“If you don’t back yourself, how can you expect others to? Being a shareholder makes you very aware of the financial health of the company as a whole.”

He describes Mr Gopsill’s analysis as “almost Jurassic”. At the West Highland Free Press, the finance package which enabled the employee buyout means loan capital requires servicing from trading profits. But the newspaper can operate on profit margins much smaller than those required by a large newspaper group, and there are no external shareholders requiring dividends.

Jobs at the paper’s head office on the Isle of Skye have been maintained, when many local newspapers are cutting back. To help balance the books it is developing a news agency operation, whereby it sells stories to other media organisations, and a membership scheme. “The question is what would we offer in return, to make it attractive,” Mr Wood says.

“We operate in an open plan office. I think it’s crucial that journalists are aware of the overarching business concerns of the paper so that they can take ownership of the changes we need to make.

“If there’s a decision that doesn’t work for the journalists the buck stops with me. If they don’t like what I’m doing they can remove me by ballot. That has an impact on the way I work. I have to work fluidly and reactively.

“There needs to be a divide [between editorial and business]. We would never expect anyone who is writing an article to worry about the impact that would have on the financial health of the company. But we don’t want a Chinese wall, for journalists not to know what’s happening.”

Of this paper’s 13 staff, 11 are shareholders, who together own a 13% stake in the company. An employee benefit trust set up by Baxi Partnership, the Co-operative Loan Fund and other co-operative investors owns the remaining 87%.

Mr Wood says ownership is inspiring journalists to save time and resources, in ways unimaginable in a traditional local newspaper. “There was a time when journalists would have been up in arms about using cameraphones, but technology has changed so much,” he says.

“Our patch is huge at around 220 square miles. We employ a full time photographer but it wouldn’t be practical for him to cover the entire area, so sometimes we send a journalist with camera phone. The journalists made this change themselves. The suggestion came from them.”

Dave Boyle
Dave Boyle

Dave Boyle agrees that journalists need to be prepared to take a risk: “If you want this to exist, you’re going to have to take some responsibility for it,” he says. “There are some hard choices to make.

“The journalists at the West Highland Free Press have had to sink their own money into their paper. They took that risk because the alternative was see their publication go down the same road as so many others, with owners running it down, their jobs being threatened and before they knew it, if they had a job at all, it would be in a tin shed in Oban.

“Terrible for news production, but great on the spreadsheet of their parent company. They say it’s one of the best risks they’ve ever taken as they make their financial choices based on the level of expenditure they need to produce a damn good paper. In situations like this, if journalists don’t provide the finance and capital themselves, somebody else will.

“A worker co-op puts people who know what they’re talking about in a position where they’re making the decisions. Co-operative models also increase the amount of money you can generate per reader per edition. As well as advertising and sales, the membership model allows you to generate revenue through membership and community shares.”

At the West Highland Free Press, six staff work in editorial and seven in business, including advertising and production.

Mr Boyle says: “If you don’t have these people supporting the journalism, you will run out of money very quickly.

“It’s one thing to lament the passing of a world in which media empires were stable and paid for great journalists to get on with the job unencumbered by wondering where their salary came from. Much media criticism seems to be a longing for a time machine, to go back to a world before the internet and before Murdoch.

“As understandable as that is, real change involves building alternatives in the here and now, and only co-operatives offer a chance of balancing the dual purpose of a media publication as something that needs to operate in a financially sustainable way, while also serving a higher purpose than the generation of profit or power for their shareholders.”

• Read more: Journalists beware: The pitfalls of media co-ops

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