By Shan Shanmugam Sgi (Own work) [CC BY-SA 4.0], via Wikimedia Commons

November 2, 2017; New York Times

When does a for-profit model make sense and when does it not? In some fields, profitability should take a back seat to being effective, useful, and sustainable, especially when those profits depend upon paying low wages. We have discussed this issue before, in “Is Exploiting Workers Key to Your Nonprofit Enterprise Model? The New Overtime Requirements,” and this story raises the question of whether some fields would be better populated by nonprofit, rather than for-profit, entities.

A week after reporters and editors at DNAinfo.com and Gothamist.com, two popular local news sites attracting nine million readers each month, voted to join the Writers Guild of America, a union, billionaire owner Joe Ricketts closed both, taking down all of their former content and eliminating 115 journalism jobs in one fell swoop.

It’s worth noting, though, that Ricketts’ action may violate federal labor law; for its part, the Guild has issued a statement saying that it “will be looking at all of our potential areas of recourse and we will aggressively pursue our new members rights.”

Ricketts, who originally entered the local news business declaring he would turn a profit where others had failed, announced his decision on the now-fallow sites themselves, acknowledging that even after “tens of thousands of stories that have informed, impacted and inspired millions of people…DNAinfo is, at the end of the day, a business, and businesses need to be economically successful if they are to endure.”

As NPQ readers know, the struggle of maintaining a tough business model is very real when it comes to local news, which is why the number of nonprofits as part of the field is increasing. For nonprofit news sites, being profitable is less important than being a sustainable source of news. Sites like the Texas Tribune, VT Digger, and scores of others are now established elements of the media landscape. Even in New York City, where DNAInfo was based, other local sites include the West Side Rag and Tribeca Citizen in Manhattan, Bklyner in Brooklyn, and the Queens Post.

The New York Times reports that when the editorial teams at DNAinfo and Gothamist first considered unionizing, management warned them of potential consequences. The company’s COO wondered aloud in a missive to staff whether unionization might be “the final straw that caused the business to close.” Ricketts chimed in with, “As long as it’s my money that’s paying for everything, I intend to be the one making the decisions about the direction of the business.” In a post on his blog explaining “Why I’m Against Unions at Businesses I Create,” Ricketts also wrote that “unions promote a corrosive us-against-them dynamic that destroys the esprit de corps businesses need to succeed.”

Perhaps not everyone was feeling the same esprit in this situation.—Ruth McCambridge