In the public interest (or: I think it would be fun to run a newspaper)

Fronting the Senate Inquiry hearings last week, CEO of Fairfax Media Greg Hywood was asked to justify his widely reported salary of $7m given the massive workforce cuts he’d just announced. One senator calculated this as 7% of the $100m combined operating budget of the Australian Financial Review, Age and Sydney Morning Herald, or one quarter of the savings to be made in sacking dozens of journalists.

In response, Hywood said that his salary reflected “market rates,” but despite repeated questioning, refused to reveal his total salary package, which did nothing to redress the implication that its actual value well exceeds $7m. When a senator continued to press, Hywood retorted: “I thought we were here to talk about the future of journalism.”

New world order, or end times?

The future of public interest journalism rests on a radical reassessment of its business models – and a radical reinvention of its market.

Securing this future is one of the most important things our generation must get right. If media owners don’t adopt new strategies and fast, we won’t have expert journalists with the skill to investigate complex issues with rigour. We won’t have reliable checks on abuses of power. We won’t have a critical discourse that challenges our preconceptions, responds to new work and fosters our culture.

Or will we? Against the alarmism coming from panic-mode Fairfax, a parallel world of quality journalism has been quietly flourishing for some time now, working at a realistic scale – and ready to grow.

Schwartz Media sniffed the wind some time ago. Their Saturday Paper has helped quell the stench of the Age’s online rot, offering a quality alternative for the weekend breakfast – one of the few remaining cultural experiences premised on having a newspaper in your hands.

The Guardian and the New York Times, mindful of increasing hits of Australian origin, secured superb local talent and launched local bureaux – with quality journalism as their point of difference. The Washington Post has enhanced its profitability since adopting a strategy to make high-quality expertise, scoops and investigative journalism its point of difference.

Alongside these trends, Australian literary journals and current affairs magazines such as Meanjin, Overland, Griffith Review, Quarterly Essay and the Monthly continue to attract superb writers from an array of disciplines, as well as a growing readership. Together, they and many, many other independent publications ensure that the public conversation is enriched by expertise and creativity.

Each of these market leaders recognise what Fairfax cannot: that the public demand and the civic need for quality journalism warrants close attention – and substantial change.

What market?

So what was the market that Hywood was referring to in attempting to justify his salary?

A salary in excess of $7m may not raise eyebrows in the mining, property or finance industries, but in those industries whose work is to promote the public good, that salary is a scandal. As the contemporary truism goes: You don’t earn a $7m salary; you steal it from your employees.

“Market rates” for CEOs in health, education, the arts and social services are appropriately moderated by conscience as well as overall operating budgets. They are also determined by business models that prioritise the good work of the organisation, as opposed to annually increasing profitability at any cost.

The not-for-profit business model is widely misunderstood as a model of generous tax subsidies that underwrite the inability to make a profit. This is not true. Like any business, a not-for-profit company must generate an annual profit or else it cannot sustain itself. It must make a profit, but it does not exist for profit.

The key difference between a commercial entity and a not-for-profit is that the not-for-profit is legally bound to reinvest each year’s profit back into the business. Every aspect of its operations must realise the objectives of the company as enshrined in its constitution. No member and no director can profit from its successes, and were it to wind up, any remaining profit must be distributed to another not-for-profit organisation with comparable objects and values.

Imagine if every company on earth reinvested their profits back into their companies, rather than profiting individual executives and directors to ever-increasing amounts. Imagine the impact on multi-disciplinary and commercially-embedded research and development. Imagine how rapidly a culture of innovation would address climate change, renewable energy, mass transit and telecommunications.

Another widely misunderstood characteristic of not-for-profit organisations is that they survive on benevolent patronage which gives them an unfair advantage. This is not true. Far from being permanently safeguarded by sponsors and donors, not-for-profit companies devote significant resources to the constant struggle to identify and secure sources of income that are wholly unrelated to the work of creating their products and services. While this is exhausting work, it’s work that requires the constant articulation and re-articulation of the values that frame the company’s work. And in doing so, it creates a culture that values the contribution of diverse communities toward the public good.

Imagine if media owners had to articulate the public value of what they do, every single day, in order to secure their own profitability. Unable to articulate the work of his company as a public good, when asked back in February about his commitment to retain weekday print editions of the Age and Sydney Morning Herald, Hywood called it “the best commercial outcome for shareholders.”

The public good?

The Senate Inquiry into the Future of Public Interest Journalism asks us to respond to the current state of journalism both here and overseas, including “the role of government in ensuring a viable, independent and diverse service.” The Inquiry’s terms of reference are quite usefully broad, spanning:

  • Regulatory frameworks such as competition and consumer laws and their impact on market share vs actual market power;
  • The operation of a comprehensive range of distribution platforms that have not, to date, been considered as news sources by those regulatory frameworks, such as search engines, social media, content aggregators and online advertisers;
  • The emergence of disruptive and deceptive practices that hijack those distribution platforms with deliberately deceptive intent, such as click-bait, propaganda and fake news, and an examination of who benefits from those practices;
  • Public and community broadcasters, their business models and their future;
  • Access to public interest journalism for regional Australia and for culturally and linguistically diverse communities.

Worth highlighting here are the deceptive practices that disguise disinformation as news. They’re worth highlighting because they’re not new. This is not a question of disruptive technology. The quest to profit from the publication of news generated violence on the streets of New York in the yellow journalism era, and influence of both Joseph Pulitzer and William Randolph Hearst in causing the 1898 Spanish-American War was the object of attack and ridicule in the monumental Citizen Kane.

The Inquiry’s reference to click-bait, for example, is to “online advertisers, ‘click-bait’ generators and other parties who benefit from disinformation.” The scourge of click-bait is not the headlines generated by bots but the headlines generated by paid, human editors of online newspapers, emulating the time-honoured tradition of writing sensationalist headlines to encourage sales and click-throughs. The editorial practice of writing deliberately misleading headlines contributes to a culture of news sensationalism that skews the way that information is made public – most problematically by politicians whose staffers are experts in spin.

The business model that sustains public and community broadcasters, literary journals and small-to-medium news publishers is intolerant toward deception. Its audiences are critical and connected, demanding a high-quality experience. Its leadership and its staff are collaborative and engaged, responsible to demanding stakeholders. Its regulatory frameworks are strict, demanding an exact compliance.

The role of government in advancing the public good is to create policies and then deliver those through a range of programs that offer clear modes of participation. In the arts, as well as in journalism in other parts of the world, government offers competitive grants programs that invite companies to describe how their business models and mission statements best meet a set of criteria around quality, participation and industry development.

What next?

Unsurprisingly, Hywood does not support such an approach. “What we don’t want is handouts,” he told the Senate Inquiry hearing on 17 May. “What handouts do is provide obligations.” That’s exactly right: the obligation to orient your business toward the public good.

Instead, when Fairfax recently attempted a Kane-style ‘Declaration of Principles’ in the form of a mission statement entitled ‘The Way Ahead’, journalists rightly responded with outrage. The proposed way ahead was to take a “pro-investor, pro-consumer view of business [as] central to our influence in the economic and business community.” In response, journalists rejected “ideological direction” and reaffirmed their commitment to “report the facts fairly and accurately without fear or favour.”

In a democratic country, no government tells an arts organisation what to program. The expectation of government reflects the expectation of the taxpayer: that arts organisations champion the public interest not through ideological adherence but through high-quality work.

At stake here is the future existence not only of quality journalism as a public good, but also, the very notion of a public. If we don’t see the diversity of our nation reflected in a diversity of quality media, the reduced media landscape will create the false impression of a reduced cultural landscape of predictable opinion, with news that reflects the interests only of those who can afford to buy its adspace or a controlling share of its governance.

In such a reduced landscape, the political cycle will be subject to even greater turbulence than the revolving door of leadership Australia has witnessed across recent years, as governments make policy and leadership judgements based on the reporting of polls rather than the long-term public interest. (The impact of reduced media diversity on political leadership is worth a Senate Inquiry all on its own.) Poll reporting, as opposed to rigorous analysis and investigative journalism, is one of the most troubling symptoms of the decline in quality journalism; like sports journalism, it readily fills a content hole with numbers and portrayals of players in competition and conflict, rather than offering a valuable interpretation that enriches the public culture.

The arts has many lessons to offer news media in restoring quality to their operations and in orienting themselves to the public good. Diversifying boards is a crucial start, securing talent with the ability to rethink strategy and operations. Creating company objectives that are honest and inspirational follows, articulating the value that the business offers its communities. Attracting and sustaining excellent journalists, and creating the best possible working environment, is fundamental to quality journalism. And adopting a business model that mandates the reinvestment of profit is vital, ensuring that the company’s decisions are always in the public interest.

Alongside climate change, securing the future of public interest journalism is one of the great moral challenges of our times.

If our generation can get that right, we’ll strengthen the future of our democracy, our culture and our nation.

 

 

There are two upcoming Sunday Salons discussing these issues. Full details and bookings here

IMAGE: Jed Leland (Joseph Cotten), Charles Foster Kane (Orson Welles) and Mr Bernstein (Everett Sloan), with Kane’s ‘Declaration of Principles’, Citizen Kane (1941). On rejecting the “gold mines, oil wells, shipping and real estate” roles he had just inherited, Kane seizes the opportunity to run a small New York media company “acquired in a foreclosure proceeding”, declaring: “I think it would be fun to run a newspaper.”