Rosen’s point seems to be that $1 million going to big dogs like the Times would mean $1 million less for the small, scrappy startup ideas that the News Challenge is probably better known for. (Although, to be sure, healthy slices of News Challenge money have gone to big dogs like MIT in the past.)
In the end, of course, it’ll be up to the Knight folks to determine how to divvy up their funds. And that process is months away. But if I were an aspiring media entrepreneur deeply invested in the crazy idea I just submitted to the News Challenge, I could imagine being chuffed that I was competing with the nation’s top newspaper.