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May 9, 2018, 12:21 p.m.
Business Models

No print, no private owners, fewer problems? Quebec’s 134-year-old La Presse is going nonprofit

“Today, after a deep reflection on the future of the company, we announce that La Presse will now fly on its own.”

In December, Quebec’s 134-year-old French-language news outlet La Presse published its last print paper ever. Now, in a quest for government and philanthropic funding, it’s leaving the Desmarais family company that’s owned it for the last 50 years, and going nonprofit.

“The responsibility to maintain quality information accessible to a large part of the population is a social issue,” La Presse president Pierre-Elliott Levasseur in the announcement on the organization’s website Tuesday (thanks, Google Translate). “All business models have been evaluated in recent months. And today, after a deep reflection on the future of the company, we announce that La Presse will now fly on its own….Any profits generated by the operations, any government assistance, any money collected from donors will be devoted to La Presse’s operations in order to continue producing quality information accessible to the greatest number.”

The Desmarais family is giving La Presse CAD $50 million (USD $38 million) and will cover employee pensions through the transition. Pending a change to provincial law regulating La Presse’s ownership structure, the nonprofit’s board will soon start to take shape.

Switching from for-profit to nonprofit, though, doesn’t guarantee solvency, and the debate around the Canadian government’s support for journalism continues.

“If you keep accumulating loss, if revenue keeps falling, that’s not a sustainable basis no matter what the ownership structure is,” said Ed Greenspon, the former editor-in-chief of The Globe and Mail and the author of a comprehensive report last year on potential paths for the Canadian journalism industry. “It’s not a solution to the problem, but it buys a little more time for management to figure things out.”

“La Presse has been taking risks and trying new things. I can’t imagine this [decision] happening with other newspapers chains, but it demonstrates to me a willingness to rethink everything in order to survive,” said Erin Millar, CEO and editor-in-chief of Vancouver-based journalism startup Discourse Media.

“This is good news,” she added, “if La Presse is smart about what they do with this opportunity.”

La Presse’s team had been exploring options for funding from the Quebec government for more than a year, Levasseur wrote in his letter, but officials were more receptive to giving money to a nonprofit than a privately owned company. (Millar said, though, that based on her conversations with federal government representatives, she doesn’t think the ownership structure was the obstacle. “My impression is that the hesitation of the federal government to come bail out a player like La Presse is related more to an unwillingness to create a subsidized press that can’t survive without the federal government’s support,” she said.)

Tablets were a big part of La Presse’s strategy. Levasseur said La Presse is read on 260,000 tablets each day and reaches 63 percent of the French-speaking adult population in Quebec each month. In 2015, La Presse derived 60 percent of its ad revenue from the tablet edition and its weekly tablet readership was nearly half a million; that fall, it stopped printing the paper on weekdays, before ending the print edition completely two years later. When the print edition ended, so did subscription fees; the tablet version has been free. (The day before La Presse announced it was going nonprofit, a Canadian businessman told reporters he was determined to buy it and restore its print edition: “The paper is not dead. Only old ideas are!” Looks like that won’t be happening.)

The Canadian government included in its latest budget $50 million over five years to help local news groups in “underserved communities.” Fifty-five percent of Canadians are in favor of additional government funding to keep local news organizations up and running, according to a poll from earlier this year.

“We heard pleas at virtually every roundtable to ease the conditions in Canada for entry of philanthropy into journalism,” Greenspon wrote in the report on Canada’s media industry last year. (Current Canadian tax law doesn’t consider journalism a charitable cause, which limits would-be donors from writing off contributions on their taxes. ) But, he noted, “we do not see philanthropic funding as a panacea.”

“Organizations like La Presse are increasingly looking at new revenue…They’re becoming creative, not necessarily innovative,” Greenspon told me Wednesday. “I think it was a very socially minded move by [the Desmarais family], who obviously want to exit their losses in the newspaper industry and [are giving La Presse] a lifeline. It doesn’t guarantee their future, but it gives them a chance.”

La Presse certainly isn’t the first newspaper publisher to try the nonprofit route. The Guardian and New York Times both launched philanthropic arms last year. The Globe and Mail is trying to follow suit: its publisher and CEO, Phillip Crawley, has asked the Canadian government to allow his organization to create a separate foundation “that would enable us to give a tax receipt to donors wanting to support quality journalism,” Crawley wrote in an email.

“I think we’re going to see other things like that. But nothing like this saves the day,” said Greenspon, if an organization still can’t make money.

POSTED     May 9, 2018, 12:21 p.m.
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