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April 25, 2024, 10:37 a.m.
Business Models

Seeking “innovative,” “stable,” and “interested”: How The Markup and CalMatters matched up

Nonprofit news has seen an uptick in mergers, acquisitions, and other consolidations. CalMatters CEO Neil Chase still says “I don’t think we’ve seen enough yet.”

The nonprofit newsrooms CalMatters and The Markup announced last week that they were joining forces. CalMatters, founded in 2015, is an established statewide newsroom, while the 4-year-old Markup focuses on technology and stories that are national — even global — in scope.

Nabiha Syed, chief executive officer of The Markup, said the idea of a merger or acquisition had been on her mind “in a general way” for some time before talks began with CalMatters.

“We live in this industry. We all know the reality. We know that we have to be efficient and really effective with our resources,” Syed said. “Mergers [can make] good business sense if the partners are a good fit. And that’s always the big question: ‘Are the partners a good fit?'”

One specific catalyst was seeing Markup stories resonate locally — especially in California, home to many of the tech companies that The Markup covers. (Syed hailed editor-in-chief Sisi Wei‘s “visionary leadership” in finding partners for The Markup’s stories and publishing “story recipes” that help local outlets find disparities in internet offers by neighborhood, investigate censorship in schools, and see if their city is using flawed homeless vulnerability scoring systems.) The other was finding the right match.

“We saw that our work really hit a chord when it was rooted in a local place,” Syed said. “Then the question was, well, intellectually this could make sense — it could definitely make sense on the local level — but who’s the right partner? Who’s innovative, who’s stable, who would be interested?”

The Markup — which has published tools and investigations into Amazon, Facebook, Uber, health care companies, local governments, and more — was also seeking an organization that was fiercely independent.

“We have a very particular approach to editorial independence, because we know that our stories can sometimes take on real centers of power,” Syed said. “We wanted to know that we were going to a place that shared not just tolerance for editorial independence, but that it’s, like, what helps you get out of bed in the morning.”

Enter CalMatters.

CalMatters chief executive officer Neil Chase said he and his friend David Boardman were “several drinks” in after a joint Lenfest and Aspen Institute event in Charleston last year when Boardman turned to him with an idea. “I just realized — you’re the perfect partner for The Markup,” Boardman, who chairs the board at The Markup alongside other roles in news leadership, told Chase.

Chase remembers that Boardman told him, “We’ve had real success doing local journalism at a national scale.”

The two talked about Markup reporting that had led to Los Angeles becoming the first city to outlaw digital discrimination by internet service providers. (The Markup’s impact page is filled with entries about Federal Trade Commission policies, class-action lawsuits, and new legislation.) They also discussed how important state, local, and city governments will continue to be in shaping tech policy.

“The more we looked at it, the more it made sense,” Chase said. “Technology policy is the biggest story that the world is watching California for right now. These are things that affect everybody. It is all coming out of California and we’re in a great position to do it.”

“The magic is that the way that The Markup investigates, they collect data and they build tools,” Chase added. “The way they report is going to help every one of our beats — not just technology.”

What else did CalMatters want to know about the potential acquisition? Chase said the nonprofit looked over The Markup’s books for “anything surprising” as part of its due diligence. Chase was also interested in who was backing The Markup financially.

“We looked at the funding lists. We have different sets of funders; there’s only a couple of funders that overlap. This opens the door for us to funders who haven’t supported us yet and it helps our funders have access to supporting this new work,” Chase said. “When you put two organizations together, if the funding streams are different, you put the two streams together. That’s a powerful financial story, as opposed to the other way around, if all the same people are supporting you.”

CalMatters, like The Markup and many other nonprofit outlets, relies primarily on foundations and major donors to fund its journalism. In 2022, half of CalMatters’ revenue came from foundation grants, with another 42% coming from gifts from major donors. (Just 5% of revenue came from memberships — which start at $10/month if you want a tote bag — and 3% from corporate sponsorships.) As Chase put it, “the nonprofit business is relentless, nonstop fundraising.”

Before committing to merging with The Markup, Chase spoke to some backers.

“It does take a minute to explain: how do a national and a local organization get together — and why does that makes sense? But we told the story to a number of The Markup’s current supporters and the response was universally: ‘That sounds really smart’ and ‘I’m glad you’re doing that.’ I think if their supporters had said ‘That sounds crazy’ or ‘That’s a bad idea,’ then we would have rethought it,” Chase said. “So, the diligence is partially studying their books and their corporate documents and all that. But it’s also taking the temperature of the people who make it possible and saying, ‘Do you think this is a good idea?'”

There’s been a recent uptick in consolidation in nonprofit news, and the industry might just be at the beginning. Chase, for one, believes “I don’t think we’ve seen enough yet.” States Newsroom acquired Pew’s Stateline. There’s been nonprofit mergers in New Jersey, Colorado, and Chicago. Mother Jones merged with the Center for Investigative Reporting late last year. And the Center for Public Integrity, facing layoffs and turmoil in leadership, explored merging with other news organizations, including The Markup.

The benefits of joining forces boil down to something like this: it’s simply too expensive to run all these different nonprofit news companies. Industry leaders hope that by sharing line items like payroll, technology, and business-side positions, they can conserve resources and put their business models on firmer, more sustainable ground.

“I think consolidation is natural. I think it’s important. And I think you’re going to see more of it where it makes sense,” Chase explained. “It’s not like [CalMatters] is in a position to go roll up a bunch of companies or anything. This one-off made sense for us because both companies are in pretty good shape — as good as a nonprofit could be. It’s not a bail-somebody-out-who’s-in-trouble situation and I don’t know that we could fix somebody else’s situation. This is two organizations that would have been okay on their own but I think will be better off together.”

The acquisition will result in “a single integrated newsroom” led by the current leadership team at CalMatters — Chase as CEO and Kristen Go as editor-in-chief — with Wei taking on the new title of chief impact officer and Syed departing for a yet-to-be-announced external role this summer. Currently, CalMatters has 72 employees and The Markup has 28, roughly half of whom live in New York. CalMatters will not force employees to relocate but will offer help to staff who do want to make the move, Chase said. Both newsrooms are unionized with NewsGuild.

“What I find really unique about this merger is that it is the coming together of a national organization and a local organization. I have not seen a combo like this, personally, in the industry,” Wei said.

How — and how well — the newsrooms will blend is a good question. Though both outlets fall under the broad category of accountability journalism, The Markup’s reach is much smaller, according to statistics from SimilarWeb, and its budget smaller.

The Markup’s audience is also much more targeted. The newsroom’s published works — often accompanied by code, data sets, and statistical analysis — evince what can only be described as a zeal for methodology. “We invite academics, journalists, policymakers, consumer activists, and community organizers to engage with our findings,” The Markup’s About page reads, “after all, this is for you.”

Chase said Markup reporters will be able to continue to work on stories that are national in scope. “I wouldn’t not do a story because it’s not 100% California,” he said.

Other aspects of the transition are yet to be decided, however. Take the issue of digital privacy, the target of some of The Markup’s most celebrated investigations and tools. Since Syed and former editor-in-chief Julia Angwin launched The Markup in 2020, the news org has made explicit privacy promises to its readers.

“We will not expose you to third-party tracking. We will collect as little personal information about you as possible. And we will never monetize this data,” The Markup’s About page reads. “This makes our work more complicated and more expensive, which is tough for a nonprofit—but your privacy is worth it.”

The promises have made The Markup an outlier in the news industry. (The newsroom rejected eight different email providers before finding one that could be custom-built to send without user-tracking.) The Markup says it has not displayed advertisements on its site “because they so often contain tracking technology” and does not “share, loan, trade, rent, or sell donor information to third parties.”

Chase said that the privacy policy came up when he and editor-in-chief Kristen Go held an open house for Markup staff to ask questions after the acquisition was announced.

“My answer was that I really respect that and I admire it. At the same time, we use the data we collect to give readers a better experience. If you’re getting a newsletter, I’d like to not offer you that newsletter subscription when you come in. If you’re a member, I’d like to know that and put different messaging on the screen. If you live a mile from we’re going to have an event tomorrow, I’d like to invite you to the event,” Chase said. “So I said to them, that’s one of the several things that we haven’t figured out yet.”

Markup reporters also asked CalMatters leadership about maintaining the editorial independence they’ve become accustomed to.

“In response, Neil, very poignantly, said something like ‘I would love to have arguments with funders because if we’re not making people mad, we’re not doing our job,'” Wei recounted. “I feel good in terms of having a very clear answer: our editorial independence is intact, and nothing is going to change there.”

Sarah Scire is deputy editor of Nieman Lab. You can reach her via email (, Twitter DM (@SarahScire), or Signal (+1 617-299-1821).
POSTED     April 25, 2024, 10:37 a.m.
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