The National Trust for Local News continues to buy local newspapers. Here’s what they learned.

Atlanta — When newspaper veteran Ross McDuffie became the first chief portfolio officer of the National Trust for Local News, the nonprofit owned two dozen newspapers in Colorado and was generating about $5 million in revenue.

Just over a year and a half later, the trust has grown rapidly in almost every way. After new rounds of acquisitions and the launch of its first new Local newspaper, the National Trust for Local News currently has:

• 65 newspapers in three states (Colorado, Maine and Georgia)
• 500 employees, around half of them journalists
• 100,000 paying subscribers
• 300,000 copies of a print product distributed per month
• $50 million in earned revenue
• 2.5 million unique monthly visitors

Last week, McDuffie shared those numbers to a packed room at the Online News Association’s annual conference. Attendees came together to learn when and how to revive an old brand or launch something new in local news. The Trust has done both.

Something new

The Macon Melody launched in June 2024 as a digital news site and weekly print newspaper with an eight-person newsroom. In its press release, the trust said that with Melody it was building “a newspaper in a news desert.” However, the city is home to the 198-year-old Macon Telegraph – part of the hedge fund-owned McClatchy newspaper group.

McDuffie, who worked at Lee Enterprises and McClatchy before joining the Trust, noted that in hedge fund newsrooms there are “hard-working and very talented people who work tirelessly for local journalism.” (A quick look at the Telegraph shows that there is local coverage – including a recent story with local election officials reacting to the new hand-counting rules – although online coverage outnumbers stories about lottery winners from other states. ) Macon “deserves a brand of obsessively local news,” McDuffie argued, and “the incentive structure” of hedge fund-owned newspapers is “broken.” The trust’s market research also showed the community was “deeply disillusioned” with existing media options.

“The challenge is that in the 15 years I’ve been doing this, I have very rarely seen that the decisions that need to be made to maximize shareholder value – or generate the return on that investment – ever come into play consistent with the needs of that individual community,” McDuffie said. “What we’re trying to solve isn’t necessarily a business model problem. We’re trying to solve the issue of ownership incentives, which in many ways is the biggest challenge facing local news.”

Philanthropy alone won’t save local news

The trust has raised $38 million in philanthropic support, Poynter reported in July. But McDuffie said the goal of the National Trust for Local News is to build community news organizations that don’t rely on institutional philanthropy.

“Being mission-driven doesn’t mean we can be business-blind,” McDuffie told the audience at ONA. “The tax structure for nonprofits doesn’t mean you can lose money in the long run and expect to get a bailout from an institutional charity or a wealthy individual who has the goodwill to support local news.”

Still, institutional philanthropy remains “a very important part” of the trust’s business model. (McDuffie clarified in an email that 2% of the trust’s “subsidiary operating revenue” comes from institutional philanthropy.) The nonprofit has focused on raising funds specifically to acquire news brands, doing what McDuffie “said.” “catalytic investments” that are “future-proof” are what newsrooms call.

For example, when the trust acquired 18 newspapers in Georgia earlier this year, it said it received support from the Knight Foundation ($5 million), the Robert W. Woodruff Foundation ($1 million) and the Marguerite Casey Foundation received. The Macon Melody was also founded with a “groundbreaking investment” from the Knight Foundation. The “catalytic investments” supported by philanthropy often involve “deferred maintenance” from previous owners. They range from new content management and human resources systems to a new printing press.

The Trust’s newsrooms generate revenue from traditional sources: advertising and reader revenue, as well as events, commercial print jobs and branded content. Membership programs – and hopefully the small donations that come with them – “take time to build,” McDuffie acknowledged, but the trust sees them as playing an important long-term role in diversifying revenue.

Elizabeth Hansen Shapiro, CEO of the National Trust for Local News, said the trust has shifted its focus from direct investment to “execution” for one simple reason: The local news industry “doesn’t need more coaches.” McDuffie echoed that sentiment, saying the trust sees itself as providing purchasing power, management and other benefits that were not available to local news outlets “outside of the corporate media.”

“I would say we are very hands-on operators,” McDuffie added. “We are not consultants.”

The printing press in the room

The trust launched “The Macon Melody” with a weekly print edition and invested in printing presses and old newspapers in three states. A recent subscription benchmark report for news publishers found that “although digital-only subscriptions are outpacing print subscriptions (66% vs. 33%), print still accounts for nearly 75% of total revenue.” Still, the moves in a nonprofit local news industry, which often focused on digital distribution, raised a few eyebrows.

“I’ll give you the sanitized version (of what I hear): ‘What are you?’ Think?’” McDuffie said. “I think the print product is a really important part of the local news identity. Will it be part of this local news identity 50 years from now? I don’t know. But do I think it will be part of the identity in 10 or 20 years? I think that’s how it will be.”

Who’s next?

The trust plans to expand into additional states. The nonprofit news organization has heard from dozens of interested local news organizations. McDuffie outlined some of the factors the trust has learned to consider when deciding whether to take over:

• Without the Trust’s intervention, would there be a news desert? The overwhelming majority of local news brands in the Trust’s portfolio serve communities with fewer than 50,000 residents. None serve a community of more than 200,000 residents. The trust sees it as part of its mission to “serve communities that are very difficult to serve with a true startup.”
• Are there foundations and individuals willing to support local news in the state? “Philanthropy alone will not save local news. I think that’s pretty clear,” McDuffie said. “But we need an ecosystem of philanthropic support … that understands how important this is.”
• Has the news organization made “progress toward a more digital future”? “Do you think about how your audience evolves? Have you effectively communicated your mission and how important it is? “Were you able to prevent the brain drain?” asked McDuffie. “Honestly, that’s one of many things this industry can’t afford – the loss of talent.”
• Does the newsroom have the trust of the communities it serves? McDuffie said the trust looks at “the mix of stories produced”, social presence, participation in the wider news ecosystem and subscription trends to assess trust. “I’m not going to sit here and say that we have some kind of trust barometer that we go through everything,” he said. “But you do have a bit of a feel for things like this.”

“Small-j” journalism creates trust

McDuffie said trust is “the most valuable thing in every balance sheet we have across our three states.” He encouraged ONA participants to remember the work that went into building it:

“Small J journalism, which we simply call community journalism, may not be at the top of the Pulitzer every year, but it certainly inspires a lot of trust,” McDuffie said. “I think if you want your audience to pay attention, if you’re going to hold the powerful to account, give a voice to the voiceless, or shine a light in dark corners, then you’d definitely do better to show it when celebrating things that things are going well in their community, or, God forbid, they are grieving a shared tragedy.”

In the middle of the journey