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March 24, 2016, 12:51 p.m.
Business Models
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Crux’s “corporate resurrection”: How the Catholic news site will live on beyond The Boston Globe

“We died and rose again on the third business day.”

The Boston Globe announced earlier this month that it will shut down Crux, the standalone Catholic news vertical that it launched in 2014, as of April 1.

“We simply haven’t been able to develop the financial model of big-ticket, Catholic-based advertisers that was envisioned,” Globe editor Brian McGrory wrote in a memo.

But Crux isn’t dead. Within a couple of days, Crux’s associate editor, John L. Allen, Jr., a longtime reporter on Catholicism and the Vatican, announced that he’d secured a deal with Catholic service organization Knights of Columbus to keep the site running. Crux will remain an independent editorial organization, with the Knights providing financial backing. Inés San Martin, Crux’s Vatican correspondent based in Rome, is going with Allen to launch the new Crux.

The Boston Globe has been “as classy about how they’ve handled this as humanly possible,” Allen told me, and the Globe’s cooperation is helping to ensure that Crux makes a smooth transition.

I spoke with Allen and San Martin, who were both in Rome this week, about Crux’s move and changes in its business model. Our conversation, lightly edited for length and clarity, is below.

“This was a corporate resurrection,” Allen joked. “We died and rose again on the third business day.”

Laura Owen: Crux is still part of the Globe right now. How does the transition work — when does the site transfer over to you and the Knights of Columbus? What happens to the archives?

John L. Allen, Jr.: There’s a short-term and a long-term plan. The short-term thing is that the Globe has been exceptionally gracious. I’m describing this as the most amicable divorce in the history of journalism, in the sense that they have given us ownership of the site, and they are also allowing the site to remain on their servers and be operated by us while we figure out where our home is going to be, which will allow us to make sure that there is no interruption whatsoever in the delivery of journalistic content. If you go to the site on April 1, there will continue to be fresh content, there will continue to be advertising. The idea is this will be the most seamless transition possible.

Eventually, the site will migrate to another set of servers someplace with our own web managers; it will be in a space where it is entirely under our control. We’re told by the tech people that’s probably a two-month process, but we’re still working on the details of that.

The archives of all the original staff-generated content will come with us. There are some licensing issues with stuff that we have used from wire services, and so it may be that, for example, some of the AP stuff will not be able to be transferred. We’re still trying to figure out exactly what the licensing implications are. We want as much of the archives to come with us as possible.

It is really important to us that no matter what else we say or do that we not be perceived in some ways as mad at the Globe. On the contrary: They made a business decision. People have to make business decisions all the time; we get that. But within the context of that business decision, they have been as classy about how they’ve handled this as humanly possible. They handed the intellectual property behind Crux over to us free of charge, and they did not have to. And, frankly, corporate logic would have suggested they should not have done that. We are profoundly grateful for that.

Owen: How long did it take to get the Knights of Columbus deal in place? It seems as if it happened really quickly.

Allen: Yeah, it’s funny. I was coming over to Rome anyway because a friend of mine was being ordained as an archbishop last Saturday. When I got here, I realized that a lot of people here thought that we had some kind of master plan, that this had all been orchestrated from the beginning, but that is not at all the reality.

We got the news on the 9th of March, which was a Wednesday, that the Globe was planning to discontinue its sponsorship of the site. We immediately started talking to different people, and by the 11th of March, a Friday, we had the basics of the oral agreement with the Knights worked out. It took over the weekend and through Monday to hammer out the details, and then we announced it the next Tuesday.

My soundbite is that this was a corporate resurrection. We died and rose again on the third business day.

Owen: Will you now be employees of Knights of Columbus?

Allen: This is a partnership, not a buyout. We have not been purchased by the Knights of Columbus; Crux remains fully independent. Up until this point, of course, we’ve been under the legal aegis of The Boston Globe. We are now incorporating as a separate entity. My home happens to be in Denver, so we’re going to be incorporated in the state of Colorado. It will be its own independent outfit and we retain full editorial control of the content. All the editorial decisions will be made by us.

What the Knights are getting out of it is that they believe that we make a good journalistic contribution to the coverage of the church. They want to support that — plus they get visibility and all of that. What we get out of it are the financial means to continue our operation.

The way it works is that they are giving us X amount of money, and then it’s up to us to decide how to allocate it in terms of salaries, etc. It’s not being administered on their side, it’s being administered on our side.

Inés San Martin: I’m already based in Rome and the plan is for me to stay here. The Vatican is what I cover and that’s the story I’m interested in pursuing.

Allen: There are a lot of media organizations that cover the Catholic church. One of the things that makes Crux distinctive is our Vatican coverage, and so it would be cutting off our nose to spite our face if we were to put Inés anywhere else. The value she brings to this deal is that she’s seen as the best young Vatican writer of her generation, and so we want to continue to take advantage of that value.

Owen: Have you thought about the kinds of advertisers you want, the business model that keeps this going, and how that might be similar or different to what you had at the Globe?

Allen: Crux is basically a niche media organization. We appeal to a specific interest, which is people who are interested in the Catholic Church. In that sense, we’re like a news organization that covers stock car racing, or quilting, or health care, or whatever else. And when you are a niche media organization, you automatically, to some extent, limit your potential advertising client base.

We’re never going to get a huge contract from Microsoft when they want to advertise for the launch of Windows 11, or from CBS when they want to advertise their fall lineup. We’re mostly talking about Catholic organizations, Catholic universities, Catholic book publishers, and so on, that are interested in appealing to the Catholic market. And although that’s an important revenue stream, the whole problem we had at the Globe is that that revenue stream by itself doesn’t cover the whole operation.

We don’t have paid circulation because, as we all know, charging for digital content really doesn’t work. If your business model is the classic journalistic model of paid circulation plus advertising, I’m really not sure you can sustain a successful niche publication in that way. I think you have to become a hybrid of the for-profit and not-for-profit models. You want to continue to solicit advertising: Our hope is that we will not only hold on to all of the people who have been advertising with Crux up to this point but will actually expand that. We may also end up syndicating some of our content, which then creates another revenue stream.

In addition, we are looking for partners and sponsors who are willing to put money into this not because they want to make money off of it but because they believe in what we do. We’ve been lucky enough right out of the gate to find a partner who is willing to do that. To me, the business model is all of those things together: advertising, syndication, and sponsorship. That’s the prescription for a successful niche publication.

Owen: Who are your readers?

Allen: I always think of it in terms of concentric circles. At the core of our readership are what you might call professional Catholics — that is, members of the hierarchy, members of the clergy, members of religious orders, people who work for the church in some capacity. In other words, people who have an intense professional investment in what is happening in the church.

At the next circle out would be committed Catholics who have other things they do with their lives — they work for banks or gardening companies or they’re teachers or whatever, but they’re Mass-going Catholics, they care about what’s happening in the church, they care about what the Pope and bishops are doing, and they want to be informed about all of that.

At the third level would be what you might call your more casual Catholic. This is somebody who maybe goes to Mass every Sunday, but maybe it’s just every once in a while. They’re not intensely interested in the latest statement from the bishops’ conference, or who got named the next head of this Vatican office that they’ve never even heard of, but at the big picture level, they do kind of care about what the Pope is up to, and they’re interested in the big Catholic stories. It’s the kind of person who might not pay attention to what we do every day, but when the Pope gets into a verbal spat with Donald Trump, they’re interested.

The next circle outside of that would be non-Catholics who nevertheless, for various reasons, are interested in the Catholic Church. This would include diplomats, for example: The Vatican is a sovereign state. It has diplomatic relations with 179 countries, and their ambassadors all are interested in what the Vatican is up to, because that’s their job. This would include leaders in other churches who are interested in a general way about what’s happening. This would also include political people who, whether or not they’re Catholic, understand that the Catholic Church plays a huge political role. Catholics are one-quarter of the American population. That’s a huge chunk of the electorate, and the Catholic vote can determine the outcome of elections. So if you’re involved in politics in America, it doesn’t really matter what your religious beliefs are, you have to take the Catholic Church seriously.

Owen: Looking at that first circle, the professional Catholics, that seems like it might be a possible paying audience.

Allen: Yeah, I mean, it’s something we’ve thought about. Right now, we’re thinking about everything. If you told me you thought you had a potential donor on Mars, I would be willing to talk to you about it. We’re open to everything, but in general we would like to maintain the idea of not having to pay for our content. The Knights are going to be our partner going forward, but that doesn’t foreclose the possibility of entering into collaborative agreements with other people, and we’re very actively talking to a number of other potential sponsors.

Part of what these sponsors are paying for is the idea that Crux has the capacity to influence the broader cultural conversation. If we start charging for our content, that probably means fewer people are going to have access to it, which reduces our ability to be present out there in the broader cultural mix. It’s one of those tradeoffs where you want the product to be as visible and accessible as possible, but at the same time, of course, you want to make money off it. We’re trying to find out exactly how to strike that balance the right way.

Owen: The Globe is a secular organization. The Knights of Columbus is a religious organization. Does that change the kind of coverage you do?

Allen: The changes we are making are more imposed upon us by financial reality than the nature of who is sponsoring us. At the Globe, we had a full-time staff of six people. Right now we have a full-time staff of three [Allen, San Martin, and business manager Shannon Levitt]. We hope to ramp back up in fairly short order, but in the short term, we are going to be a somewhat smaller operation.

In terms of the types of editorial choices we’re able to make, I don’t think the deal changes anything. If anything, we are going to be freer under this arrangement than we were before because when we were at the Globe, Inés and I were basically staff. We had tremendous freedom, but we were not making the big-picture editorial decisions about Crux. Now we are, because we own it. The Knights are not getting into this to try to control Crux; they’re getting into because they like what we do and they want to support it.

On this business about the niche publication business model, to me, the real key to all of that is clarity at the very beginning. You’ve got to clarify the boundaries of this relationship and make it clear to anyone who’s going to partner with you or sponsor you that the value of the journalism you do is entirely related to how independent you are to do it. If the perception is that you are just carrying water for the person you partner with, that obviously changes the value of the brand.

The Knights are certainly smart enough to understand that. And so I don’t think this really changes anything in terms of the kinds of editorial decisions we are able to make. The only things it changes in the short term is how many boots we can put on the ground to implement those decisions.

Photo of budding flowers by Liz West used under a Creative Commons license.

POSTED     March 24, 2016, 12:51 p.m.
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