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Aug. 8, 2019, 9:20 a.m.
Business Models
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Pacific Standard is shutting down, cut off from its major foundation funder

“We’ve been told repeatedly that the amount of funding that came from SAGE was going to be the same for the long term every year and we were responsible for raising additional revenue…and we’ve done that.”

The day after tech investigative site The Markup, funded largely by a $20 million donation from Craig Newmark, announced its comeback with the funders’ help after a messy spring, Pacific Standard has announced its end. The magazine has been majorly supported by a foundation that’s part of an academic journal, founded by still-executive chairman Sara Miller McCune — but apparently now that’s decidedly over, according to editor-in-chief Nicholas Jackson.

“What we were told today was SAGE Publications, our primary funder — that organization and ours have the same founder — that they were in a position that they could no longer fund the magazine or many of their other charitable projects or projects they support,” Jackson told me (before he joined the staff to drink). “We’ve been told repeatedly that the amount of funding that came from SAGE was going to be the same for the long term every year and we were responsible for raising additional revenue to support growth and cost of living increases and health insurance raises, and we’ve done that” with individual donors, advertising revenue, and more. Still, the magazine heavily relied on the foundation for its $3.5 million budget.

“Pacific Standard has been a path breaking and award-winning magazine and one which SAGE has supported for over ten years since its original launch as Miller McCune magazine,” SAGE wrote in a statement Wednesday. “However, SAGE is unable to continue to offer the very considerable financial support that the magazine requires to be viable while also investing in the core businesses of SAGE Publishing and, as a result, the Board of the Foundation had no alternative but to take this decision…. The Board is committed to exploring options for maintaining the availability of Pacific Standard’s content or otherwise continuing the work of the magazine.”

SAGE Publishing — the academic journal publisher founded in 1965 — maintains The Social Justice Foundation, whose primary purpose is to funnel money to the Pacific Standard, Jackson told me. The foundation and the magazine were previously named for philanthropist Miller McCune, but when that rebranding happened a few years ago, the board also switched over. Miller McCune and local (Santa Barbara-area) representatives were replaced with four SAGE Publishing executives. They were about to enter into budget talks for the upcoming year and had recently hired new employees, on the board’s encouragement and in line with Jackson’s recently submitted-to-the-board 10 year plan for Pacific Standard. Jackson was informed Monday that the decision had been made to shut the magazine down so they could wrap up the foundation. Pacific Standard’s last day is August 16.

“While I’m certainly concerned about the archives and the work we’ve done, I have to think abut the staff and contract talks first, then turn my attention to some way to save the archives,” Jackson said. “It seems to me that a lot of that is left in my hands, which is probably not atypical nor ideal, but I don’t believe the board has a plan beyond just dissolving the foundation as soon as they can.”

Jackson is looking for a place to house the archives and, of course, to scoop up any of the 20-member staff. He said he was not given the option of spinning the magazine out (it has three folks on the business side) or trying to move it elsewhere.

“A lot of places that do social and environmental justice reporting — when you hear that you think of partisan news sources or places that lean a little more toward activism and journalism like the ThinkProgresses of the world [ThinkProgress is, um, up for sale]. Those places are important and do really good work and I hope we find ways to support them too. But I think especially in this moment it’s really important to do nonpartisan, just straight reporting and storytelling in that space that’s often so charged. The thing that really kept this team going was… if you can inform people who are reaching even discreetly outside of their filter bubble right now,” he said. “But it’s a lot harder to build an audience for it and it’s not easily monetizable. I thought the structure we had was going to allow us to keep doing that for a lot longer.”

Jackson led a superb editorial team at Pacific Standard over his six years there, but obviously the finances need to shape up, too. When Nieman Lab covered then-Miller-McCune magazine’s shift to the West in 2012, one of the first lines was “Because it’s so well-funded, it has been able to focus on its journalism for the last four years without bringing in much revenue.” 2019 has brought that mindset to reality for nearly every news outlet.

That 2012 article was about Pacific Standard trying to find its financial footing beyond a wealthy individual (Miller McCune found her fortune from selling an air conditioner at age 24 with her husband and then founding SAGE Publishing — she’s now 78):

So Miller-McCune [the magazine] is trying to appeal to an audience beyond its wonky base and compete with the likes of The New Yorker, The Atlantic, and The Economist.

Over the last year the magazine has begun charging for subscriptions and has made two high-profile hires. The magazine is revamping its ad strategy and, in a nod to its Santa Barbara, Calif., roots, relaunching in April under a new name, Pacific Standard.

P. Steven Ainsley — the former Boston Globe publisher who negotiated the paper’s very future in 2009 — is the magazine’s new president and publisher….

Pacific Standard’s target reader is highly educated and earns more than $100,000 a year, Ainsley said. Until now, the magazine had sold advertising primarily to academic and nonprofit organizations, which he admits “never really panned out.” Now a full-time ad salesperson will go after “thought-leader advertising,” that is, ads for international travel, auto, and finance targeting CEOs, college presidents, and people in government.

The magazine has a business plan to be self-sustainable “several years out,” Ainsley said, but will rely on funding from the McCune Center [the foundation] “for the foreseeable future.”

Media Twitter was…understandably upset, as were the magazine’s staff:

POSTED     Aug. 8, 2019, 9:20 a.m.
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