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    If Malin Burnham has his way, San Diego would have a new model for how journalism is done here. Burnham, a longtime San Diego philanthropist, and a group of supporters is interested in creating a nonprofit that would own the U-T San Diego newspaper. The paper would continue to run as a for-profit enterprise. He first confirmed his interest in the paper to the San Diego Reader over the weekend. If he’s successful, the U-T would have its fourth owner since 2009.

    I spoke with Burnham Monday afternoon. He insisted any deal is far from guaranteed, and the next step is getting approval from the Internal Revenue Service for his plan. He said U-T’s current owner, developer Doug Manchester, has encouraged him to do that.

    “We don’t have a handshake or an agreement,” Burnham said. “We feel we can go back and get an agreement.”

    Manchester told Voice of San Diego in an email that a lot of the discussions were premature.


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    “Actually no comment as we have zero deal at this time!” Manchester wrote. “I have always admired and respected all that Malin has done for our community and continues to do. If Malin gets the necessary approvals then we will talk but we are a long way from any type of transaction if any will ever materialize.”

    Manchester said that he respected and appreciated Burnham’s core philosophy, which Manchester described as “community before self.”

    How Would This Work?

    Burnham envisions the paper as a blend between a traditional nonprofit and a traditional newspaper. The paper would solicit donations, but also accept advertising and subscriptions. He got most excited talking about how the paper’s profit would be distributed.

    “Instead of it going to the owner for the investment, we will, in effect, reinvest it into the community,” Burnham said.

    He said that nonprofit civic organizations, such as the San Diego Foundation’s Center for Civic Engagement (which Burnham helped bankroll – it also bears his name) and arts groups and others could receive grants for projects. So could biotech and medical nonprofits.

    “The investments could not just benefit San Diego, but the whole world,” he said.

    He said the paper was much more financially sound today than it was in the last days of the Copley family’s ownership in 2009.

    Burnham was less specific about how the journalism would work. He said he recognizes that print is declining while online news consumption is growing. Over time, the paper could reflect that by cutting its size and the days of the week it’s published. He says he’s bullish on the news business, though.

    “We think that the distribution of news will continue to be a worthy enterprise,” he said.

    He also emphasized the journalism aspect was a work in progress.

    “We’re not experts in journalism,” he said.

    Burnham also confirmed that any deal wouldn’t involve the paper’s Mission Valley real estate, which has long been considered the most valuable part of the operation. He said the paper would be tenants in the building, not owners.

    What About the Editorial Page?

    The biggest stamp Manchester has put on the paper is his aggressive editorial stances for conservative political causes and building a new Chargers stadium.

    Expect that to change under Burnham’s group.

    He said there’d be a firewall between the nonprofit and the editorial board – something that would likely be required under IRS rules, anyway. But he said he also would expect the board to be nonpartisan and less in your face.

    He expected the board would continue to endorse candidates and political initiatives but decide on a case-by-case basis, not from a particular partisan perspective. He said that the board would make decisions based on “the best interests of San Diego.” I pushed him on who would decide what the best interests of San Diego were. But Burnham kept repeating that line.

    “Hopefully that editorial board would be a cross-section of the community,” he said.

    What’s the Timeline?

    Burnham said he expected IRS approval for the venture would take three months. Nothing could happen until his group had that in hand. After that, the timeline would depend on striking a deal with Manchester.

    “It all depends if Mr. Manchester is willing to sell us the paper,” Burnham said. “He has encouraged us to seek the IRS opinion. We know we’re running the risk that he might sell it to someone else in the meantime.”

    Are There Other Places Like This?

    This model for journalism does exist other places, most notably, along Florida’s west coast. The Tampa Bay Times is a for-profit newspaper owned by a nonprofit. It has had a reputation as one of the best newspapers in the country for decades. But recently, it’s fallen on serious financial difficulties.

    Burnham said his plan isn’t modeled after the Times or any other organization. He told me he read an article about the Times’ financial distress Monday morning.

    “I don’t know anything about their situation other than that it’s a newspaper owned by a nonprofit institution,” he said. “Their financial status, their business climate could be very different than ours here.”

    What Don’t We Know

    A lot.

    Burnham wouldn’t disclose the names of his partners pursuing the venture. Nor would he say whether he’s talked with Manchester about a purchase price. He said all those discussions were premature. Burnham did say that community members he’s discussed the plan with have been universally supportive of the idea.

    Who Is This Guy?

    Picture in your mind the stereotype of a longtime civic leader and philanthropist from San Diego. If you guessed an older white man, who worked as a developer, was a prominent sailor and is a coastal Republican, congratulations, you just described Malin Burnham.

    Now 86 years old, Burnham won an international yacht racing competition when he was 17 and has continued sailing since. He’s chaired nine major nonprofits and co-founded 14 organizations. He’s heavily involved with the San Diego Foundation, the region’s major universities and also the Sanford-Burnham Medical Research Institute in La Jolla, which he endowed. He also helped bring the America’s Cup to San Diego in the late 1980s and co-owned the Padres in the 1990s.

    Burnham is hardly a shrinking violet politically, either. He’s given lots of money to political causes over the years. Most recently, he donated big to Nathan Fletcher’s mayoral campaigns, an unsuccessful city tax increase ballot measure in 2010 and the successful pension reform ballot measure in 2012.

    He recently criticized the local right-wing Lincoln Club as “The Lynching Club,” a play off the club’s chairman Bill Lynch, and knocked the group for its aggressive attacks on Fletcher during the mayoral campaign. In the previous mayoral campaign, Burnham said he called District Attorney Bonnie Dumanis to tell her to drop out of the race so Fletcher would have a shot at advancing. (Dumanis denies this happened.) Burnham also was behind a failed attempt to put a 500-foot statue of wings on the Navy pier.

    Burnham also has, without question, the best head of hair in San Diego.

      This article relates to: Community, News, Nonprofits/Community, Share

      Written by Liam Dillon

      Liam Dillon is senior reporter and assistant editor for Voice of San Diego. He leads VOSD’s investigations and writes about how regular people interact with local government. What should he write about next? Please contact him directly at liam.dillon@voiceofsandiego.org or 619.550.5663.

      31 comments
      stclairp
      stclairp subscriber

      If a conventional newspaper cannot make  a profit, ownership by a non profit entity is not going to improve the economics one little bit.  In fact, it probably makes it more difficult to obtain short term credit needed to buy newsprint, fund capital investments in printing and distribution, etc.  So the real question is whether Malin Burnham can create an editorial strategy that is more appealing to a wider variety of paying readers.   Older people read the paper.  They like holding it in the morning.  They participate in civic dialog.  They vote.  Younger people engage in dramatically different ways.  Perhaps a newspaper needs to adopt a Yelp model of "scoring" news stories, editorials, etc.  In any event, its critical that we have an independent investigatory body in San Diego or the politicians and bureaucrats are going to rob what's left of the store they have not already absconded with.   Vote "Yes" on any acquisition that leaves the UT in local hands, concerned with local events, and tied to a gentleman who has given most of his life to making this a better place to live (and who knows how to find Tijuana by land, air and sea.)  

      Kelly Abbott
      Kelly Abbott moderator memberadministrator

      Ken Doctor (newsonomics) wrote about this particular californian phenomenon today. 

      http://www.niemanlab.org/2014/09/the-newsonomics-of-auctioning-off-digital-firsts-newspapers-and-california-schemin/


      Looks like it's not just SD. It starts to get interesting when you consider that from Ventura County to Tijuana we have newspaper ownership in flux. He even hints at the possibility of there being an opportune time for the LA Times to landgrab from SD and OC as a result. At least, that's how I read it. 


      Worth checking out.


      Also, @Liam Dillon gets a shout out several times in the article for his coverage here. 

      Kelly Abbott
      Kelly Abbott moderator memberadministrator

      @Liam Dillon I neglected to also link to the Bay Area non-profit article also via Nieman Lab today. 


      http://www.niemanlab.org/2014/09/could-a-bay-area-news-nonprofit-take-over-some-of-its-biggest-newspapers/


      Also, Liam added a nice foreword to this VOSD article when it got republished by Nieman Lab yesterday. The foreward reads like a summary of his responses to commenters (which is why we're here, amirite?). 

      http://www.niemanlab.org/2014/09/what-we-know-and-dont-know-about-the-plan-to-make-san-diegos-daily-a-nonprofit/

      Steven Greer
      Steven Greer subscriber

      @gumballgary @voiceofsandiego Right - It seems that the U-T under Pappa has already been a "non-profit" for quite some time.

      David Cohen
      David Cohen subscriber

      I thought the flight of subscribers from Papa Doug's political tract had already made it a non-profit enterprise, but then I remembered all the journalists no longer in the payroll and thought, "maybe not."

      We would resume subscribing if/once Manchester is no longer involved in the U-T.

      SDResident
      SDResident subscriber

      The 501 C 3 non-profit that I belong to is specifically prohibited from endorsing candidates for political office.  How does Malin propose getting around this restriction?

      Carrie
      Carrie subscribermember

      @Liam Dillon @SDResident It will no doubt  be named the UT "Foundation". Wonder how long before the IRS closes this loophole. 

      Bob Stein
      Bob Stein subscriber

      It is not unusual for a non-profit to own a for-profit enterprise that provides funding for the services rendered by the non-profit.Goodwill owns retail stores that fund its mission to train workers.The blood bank sells blood to fund its mission of collecting blood.

      But it is highly unusual, if not downright bizarre, for a non-profit to own a for-profit that has nothing to do with the mission of the non-profit except to provide it with money to distribute outside the non-profit for whatever its board feels is a worthwhile cause. 

      But, as I read you Liam, Burnham’s idea is to do just that; to restructure the UT as a revenue generator for a civic foundation (?) through which he and his friends will send money to the causes they favor most.  We must assume, given the players, this means political causes along with standards like the arts and human services.

      It is equally bizarre, given the players, that if, as Burnham states, the UT is profitable, that Papa Doug would sell it to a non-profit, as non-profits by nature have little to no money for buying for-profit businesses, nor, if they did, could they come close to what a for-profit buyer could pay, given a potential return.

      But then, as you point out, we don’t know who else is involved, how much money they can bring to the table, the valuation of the paper, or what is really going on here, especially given the nature of Republican power in San Diego and the role these men and this newspaper play in promoting conservative Republican ideology.

      The whole thing smells.  Let the investigative journalism begin.

      Joe Jones
      Joe Jones subscriber

      @Arizona Bread Burnham didn't say the Union-Tabloid was profitable. He said it's doing better under Manchester than it was when the Coleys dumped it, which is like saying the Chargers did better under Mike Riley than Harland Svare.

      David Crossley
      David Crossley subscriber

      I don't think Malin needs to worry too much about Dougie selling his paper to someone else.

      Kelly Abbott
      Kelly Abbott moderator memberadministrator

      Point 1: So this would be a non-profit in the same way the NFL is a non-profit. 


      Point 2: Do they really think they'll be so flush with cash that they can become a foundation? This is inspired thinking but the revenues will hardly come from the newspaper side of the house. @Liam Dillon you should press him on those deets. 

      Liam Dillon
      Liam Dillon memberadministrator

      @Kelly Abbott Hi Kelly. 


      Point 1: It's better to think of it as two separate things. A for-profit newspaper whose owner is a nonprofit. Profits from the newspaper, if there are any, would go to the nonprofit to distribute rather than to an individual or shareholders. 


      Point 2: Yes, I asked a few times about the state of the newspaper business and whether he thinks it would deliver any profits at all. He said the paper was better off now than it used to be and he envisioned a digital transition that would ultimately make the actual printed edition less relevant. But he believed this could make money.


      Essentially this would deal with one aspect of the Future of News Revenue puzzle. It would eliminate the need to deliver profits for an owner or shareholders, which for-profit news companies by definition have to do. But by itself it doesn't solve the How Does News Make Money -- or at least not lose money -- problem.

      Kelly Abbott
      Kelly Abbott moderator memberadministrator

      @Liam Dillon I think your points contradict themselves at the for-profit level entity. Doesn't the newspaper still have to report profits? If so, then that means they're using the non-profit to house the losses which makes me as a potential donor say WTF? Again with the NFL reference, why would I donate to such an entity? Is there any non-profit activity to it or is it just a convenient accounting trick? Furthermore, even a non-profit pays taxes on unrelated income. What will be the mission-related activity of the non-profit and what will be unrelated? Lots of questions...

      Randy Dotinga
      Randy Dotinga memberauthor

      @Kelly Abbott @Liam Dillon The non-profit could be an umbrella group that's pushing for civic improvement, with the newspaper as one of its projects. 

      I think the non-profit could get donations or grants and use them to subsidize the paper so it wouldn't have to make net revenue.  

      JoelCHoffmann
      JoelCHoffmann

      @dillonliam Sources confirm that it is a good synopsis, and it currently appears on multiple nodes of the World Wide Web.

      JoelCHoffmann
      JoelCHoffmann

      @dillonliam I'm disappointed that you didn't include the rumor about Burnham wanting to blow a hole through the Silver Strand, though.

      Steven Greer
      Steven Greer subscriber

      Great article, and I agree about the hair.  We can only hope that whoever runs the new endeavor will (a) dump the existing editorial board and "glibertarian" columnists like the bag of rocks that they are and (b) bring back Don Bauder on the business page.

      Eric Spoerner
      Eric Spoerner subscriber

      @Steven Greer Would also help if they stopped dismissing sportswriters for disagreeing with that stupid downtown Chargers stadium idea.

      Randy Dotinga
      Randy Dotinga memberauthor

      @Steven Greer Until then, we can enjoy Bauder's reporting of rumors at the Reader. It's OK, the Reader says, because sometimes they're true!

      Joe Jones
      Joe Jones subscriber

      @Steven Greer The only way Bozo Bauder returns to the U-T is if it's purchased by Barnum & Bailey.