Colorado Community Media, the company that produces two dozen newspapers around the Denver-area suburbs, has been acquired by a local and national partnership with the goal of building a sustainable business model for local news, its ownership announced on May 3.
Jerry and Ann Healey, the couple who built the company over the past decade, sold the network of papers that now spans eight counties and dozens of communities to a joint partnership between the National Trust for Local News, or NTLN, and The Colorado Sun.
The acquisition is the first for NTLN, a nascent nonprofit that seeks to leverage national foundation funding to buy and bolster local newspapers threatened by faltering business models and the encroachment of hedge funds and corporate conglomerates.
The Colorado Sun, a statewide news outlet founded and run by former Denver Post journalists, will oversee daily operations at Colorado Community Media. Together the partnership will be called the Colorado News Conservancy.
With the Healeys looking toward retirement and hoping to leave the company in good hands, publisher Jerry Healey said the deal was the best he could have hoped for.
“We were looking for new owners who understand the purpose of community newspapers,” Jerry said. “Someone who believed in our mission to tell stories that matter in our communities, not just in sending profits back East. They have the heart and vision for what could be a way to preserve and grow local papers everywhere, not just ours.”
Ann said she has total confidence in the new owners.
“They're in it for the right reasons," she said, "and they really care about journalism.”
The acquisition charts a new path forward for family-owned legacy newspapers, said Larry Ryckman, the editor and co-founder of the Colorado Sun.
“This is a cool opportunity to demonstrate to Colorado and the country that we can find a way to keep local journalism in local hands,” Ryckman said. “My expectation is we'll hire additional people. Readers will keep seeing the journalism they trust and support, but we can breathe some energy into both the print and digital operations.”
The approach will be gradual and thoughtful, he said.
“We don't want to come in and say how to run the shop,” Ryckman said. “I want to be humble and listen to readers and staff and figure out the best way forward. Job one is to not break anything.”
Newspapers for sale
The Healeys began quietly hunting for a buyer around Thanksgiving 2020, Jerry Healey said.
He approached Laura Frank, the executive director of the Colorado News Collaborative or COLab, a nonprofit statewide network that works to strengthen local journalism, asking if she knew of any potential buyers who would preserve and grow local news. Frank connected him to Elizabeth Hansen Shapiro, CEO and co-founder of NTLN.
The timing was serendipitous, Shapiro said. Just over a month earlier, NTLN had published its concept paper through Harvard University's Shorenstein Center on Media, Politics and Public Policy.
The situation in local news nationwide is dire, the concept paper says.
Though many small family-run operations remain profitable around the country, they face serious headwinds from declining advertising revenue and print subscriptions. Digital advertising struggles to make up the difference, especially as corporate behemoths like Facebook and Google have gobbled up much of the available online ad revenue.
Waves of consolidation and acquisitions have left a third of America's newspapers in the hands of 25 companies as of 2018, the paper says, with more than 1,800 newspapers shut down in the last 15 years.
“The most powerful newspaper owners are now private capital holding companies whose expectations for profit and return have strongly influenced local newsrooms' size, quality, and resource levels,” the paper reads in part.
Corporate ownership entangles newspapers in a “downward spiral” that slashes newspapers' legitimacy and capabilities, it says.
Though some newspapers have been preserved by local “angel investors” or billionaires who take them on — as is the case at the Washington Post, Los Angeles Times and Colorado Springs Gazette — that model is not replicable on a large scale.
NTLN draws inspiration in part from public radio, which in recent decades has built a diversified funding model built on grants, foundations, underwriting and listener support, while still retaining local control.
“The new business model is 'all of the above,'” Shapiro said. “It's advertising, philanthropy and small-dollar giving. We're pragmatists — let's get the news funded as many different ways as we can. Multiple revenue streams preserve independence.”
The CCM acquisition — the terms and price of which are confidential — brings together an array of funders.
The deal was funded by FJC, a boutique public charity that specializes in nonprofit loans, Shapiro said. The loan is guaranteed by the American Journalism Project, a venture philanthropy organization; the Colorado Trust, a health equity organization; and the Gates Family Foundation, a philanthropic group with its roots in Denver's Gates Rubber Company.
A grant from the Colorado Media Project, a grant-funded initiative that advocates for journalistic innovation, supported a portion of the legal costs and connected NTLN to local funders.
Operational support is being provided by the Knight Foundation, a national arts and journalism philanthropic group; the Google News Initiative, which partners with local news organizations; and the Democracy Fund, a nonpartisan foundation that seeks to strengthen civic engagement.
None of the foundations will have any say over CCM's content or editorial direction, she said.
Acquiring CCM is an exciting chance to prove the NTLN concept, Shapiro said.
“There has to be more to the story of American journalism in the 21st century than all the destruction we see,” she said. “This is setting up CCM for the long term. It's not going to get sold to a conglomerate or hedge fund and shut down. We're setting these papers up on strong footing, but it's going to be up to the communities to keep them that way.”
Here comes the Sun
NTLN provided the funding for the acquisition and will provide consulting and business services, but the ultimate goal is to hand off control and ownership to The Colorado Sun, Shapiro said.
The Sun was founded by former Denver Post journalists who left in 2018, following moves by Alden Global Capital, the newspaper's hedge fund ownership, that slashed dozens of news staff and moved the newsroom from downtown Denver to the newspaper's Adams County printing plant.
Since its founding, the Sun has proven to be resilient and well-supported, said Ryckman, the editor and co-founder.
“Our business model is so simple it sounds naive,” Ryckman said. “Treat readers with respect. Don't scam them with clickbait, autoplay videos or pop-up ads. Give them journalism worthy of their support. We've seen tremendous growth in readership and paying membership.”
The Sun is in a growth phase, he said.
“We started with 10 full-timers, and we'll have 16 next month, and we're aiming for 20 by midsummer,” he said. “We do have statewide ambitions, and our goal is to fill the gaps and do the stories others aren't doing.”
CCM fits nicely into that goal, he said. Like the Sun, CCM will be operated as a public benefit corporation, meaning while it remains for-profit, it has no obligation to maximize shareholder profits.
“Strictly for-profit means you do whatever you can to make as much money as you can,” Ryckman said. “If that means layoffs or selling real estate, so be it. In a public benefit corporation, you need to treat it like a business, but the first goal is to serve the public. Journalism is too important to be in the hands of strip-mining hedge funds.”
Ryckman said he hopes to bolster CCM's existing strengths and connections to the communities it serves.
“CCM will remain independent, but we can find ways to help and collaborate on the business and news side,” he said.
The two already have an established working relationship — CCM reporter Jessica Gibbs and Colorado Sun reporter Jesse Paul recently took home an award from the Society for Professional Journalists for a series on how COVID affected public health workers.
“We can be great resources,” Ryckman said. “We're run by journalists. We've got Pulitzer Prize winners on staff. The Sun is the most collaborative place I've ever worked, and that's the spirit I want to bring to this endeavor.”
It's too soon to say what staffing will look like going forward, but Ryckman said they have no plans to fire anyone, and a new digital editor is likely. The Sun will also begin a search for a new permanent publisher for CCM, though Jerry Healey will stay on for a time as a consultant.
The Sun's leadership plans to listen to readers to figure out a path forward, said Sun editor Dana Coffield.
“These are changing times, and we need to listen to what news consumers are telling us,” she said. “There's great journalism being produced, but it may not be presented in the ways readers want to receive it. We're looking at web platforms that are more reader-friendly, email newsletters, more of a social media presence. We'll start with the basics, and can get more excited and ambitious from there.”
That doesn't mean print editions are going away, she said.
“We hope to do print for a very long time,” she said. “But a robust internet product is important too.”
In good hands
For the Healeys, the deal is a great outcome for the crowning achievement of their professional lives.
“We've taken this company as far as we can take it, and it's time for someone else to take it to the next level,” Jerry said.
The company wasn't in danger of closing, he said, though the past year has been tough.
Half the company's advertisers either backed out or cut ads last spring, and reporters each took a week of furlough. Several salespeople who left weren't replaced. CCM received $255,800 in Paycheck Protection Program loans last year, according to federal records.
“I'm not afraid to say PPP money got us through last spring,” he said. “The government stepped up. We would have gone into our savings to keep it going, but we wouldn't have closed the newspapers. It gave us the ability to focus on the company and pay the bills.”
The company had strong showings in the third and fourth quarters of 2020, Jerry said.
“Advertisers were coming back, and I'm most proud of my management during COVID,” he said.
The company stayed bullish, with the Healeys buying seven newspapers from Landmark Community Newspapers in October.
Ann said the acquisition is a win for the newspapers, some of which date back more than a century — or in the case of the Golden Transcript, to the Gold Rush.
But it's also a win for readers, she said.
“These days people can get lost in the cacophony of social media and snap judgments, and it's easy to lose sight of what's important,” she said. “We're making sure these communities still have their voices heard through active, high-quality journalism. We feel like we're just a small part of the history of these papers and these communities, but we're so excited for this opportunity to hand them off and make them better and stronger.”
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