Bonus: Who Pays for the News? Funding the Fourth Estate

In this special bonus episode of On Assignment, Malcolm Redd steps into the host chair to explore the financial future of local journalism. As advertising dollars vanish into the coffers of Big Tech, newsrooms are scrambling to find sustainable models—from reader-funded startups and journalist-owned cooperatives to nonprofit newsrooms and public benefit corporations.

Drawing on examples from Defector to Lookout Santa Cruz, and from Canadian policy to U.S. tax credits, Malcolm breaks down the innovative ownership structures and funding strategies reshaping the local news landscape. It’s a wide-ranging look at who pays for the news now—and what it might take to keep journalism alive where it’s needed most.

Creators and Guests

Guest

Malcolm Redd

Malcolm Redd is a media business analyst with a deep focus on the evolving economics of journalism. Based in the Chicago area, he has closely studied emerging ownership and funding models—ranging from reporter-led cooperatives to foundation-backed nonprofits and member-supported platforms. Redd’s approach is methodical, but never mechanical, shaped by years of parsing how local and national outlets adapt (or fail to) in a landscape where legacy structures are no longer guaranteed. He’s especially interested in systems that function outside conventional market logic, often surfacing insights that traditional observers might miss. Though rarely seen at industry mixers, his voice remains a fixture in conversations about journalism’s financial future.

What is On Assignment by The Assignment Desk?

On Assignment is a podcast about the people, practices, and ideas shaping the future of journalism. Produced by The Assignment Desk, each episode dives into the evolving world of local media, journalism education, news innovation, and the urgent fight against disinformation. From conversations about newsroom funding and emerging technologies to rebuilding public trust and reimagining community storytelling, On Assignment explores the challenges and possibilities facing today’s news landscape. Whether you’re a journalist, student, educator, or simply someone who cares about credible information, this podcast is your place to listen, learn, and stay connected to the mission of public-interest journalism.

Welcome back to "On Assignment." I'm Marcus Redd.

I'm stepping into the host chair — just for today. Liz and Gath will be back next time.

Last time, we talked about the problem of expanding news deserts — and the real damage they do to communities when reliable local reporting disappears.

Today... we’re going to focus on the flip side of that coin: how news organizations — both established and brand new — are trying to find stable footing, find the money they need, and build sustainable models for the future.

The core challenge is financial.

For decades, local news relied heavily on advertising — especially in print newspapers. But that model has... pretty much collapsed.

As the Public Policy Forum notes in its report "The Lost Estate," ad dollars going to Canadian community newspapers fell by 44%, and to local radio stations by 33%, between 2018 and 2022. Most of those dollars? They're going to big tech — Google, Meta.

A huge chunk of digital ad revenue now sits with those giants. And that shift... it's played a major role in the decline we talked about last time.

So now, the big question is:

Where does the money come from for the news outlets that still exist and where can it come from the new one's that are just getting starte?

One of the biggest shifts we're seeing is a growing reliance on direct audience support — subscriptions, memberships, donations.

Many digital-first outlets are built entirely around this model.

Readers pay for the content they value.

Defector, 404 Media — both rely heavily on paid reader subscriptions. Hell Gate, in New York? About 50% subscriber-funded. The Charlotte Ledger? Somewhere around 70 to 80%.

The Banyan Project calls it a member model — readers enroll to keep the work going. To keep the institution alive.

Beyond reader support, there's real momentum in rethinking how news organizations are structured.

Mark Glaser, writing for the Knight Foundation, points out how some of these models aim to keep ownership local — and avoid the kind of extractive ownership that’s gutted newsrooms in the past.

One of the most interesting models is worker ownership — journalist-owned outlets.

This is where reporters don’t just do the journalism — they run the business. They call the shots.

Defector was founded by former Deadspin staff who walked out together. Hell Gate was born out of job instability. Racket came from alt-weekly editors. 404 Media launched after Vice collapsed. The Long Beach Watchdog? Formed after a round of layoffs.

According to Damon Orion, writing for Resilience, these kinds of outlets avoid many of the corporate restrictions that slow down traditional media. Editorial control stays with the journalists.

It’s not just about autonomy — it's about security, too.

As Lex Roman puts it, these reporters have skin in the game.

Of course, getting off the ground is tough — raising capital, building systems. But some — like Defector, like 404 Media — are already profitable.

Even the New York Review of Architecture became a worker co-op. It joined the U.S. Federation of Worker Cooperatives after years of building the right foundation.

Another shift?

Nonprofit status.

Matt DiRienzo put it simply: being a nonprofit is a tax status — not a business model. But it opens doors. Tax-deductible donations. Grant access. It prioritizes the public interest over shareholder return.

And that’s appealing — especially in this moment.

Additionally, we’re seeing a real increase in philanthropic support.

The Press Forward initiative — $500 million pledged to local journalism. The first round? $20 million distributed to over 200 outlets.

Debbie Blankenship, at Mercer University, says nonprofit status gives the public more trust — a sense of “buy in.”

She hopes to see more for-profit newsrooms make that leap. As a sign — that they’re committed to journalism as a public service.

Still, nonprofit outlets face challenges. They remain heavily reliant on foundation dollars.

But tools like NewsMatch are helping — by spurring individual giving and easing concerns over long-term sustainability.

Another option gaining traction: public benefit corporations — or PBCs.

These are for-profit entities... but with a public service mission built in.

It’s a hybrid approach — allowing for investment, while keeping community accountability front and center.

The Colorado Sun uses this model. So does Lookout Santa Cruz.

And in Canada, a similar structure exists — Registered Journalism Organizations, or RJOs.

Newspapers like La Presse and Le Devoir have gone this route — unlocking nonprofit-style benefits while maintaining their independence.

In some cases, local impact investors are stepping in.

These are people — or firms — who care less about quick returns, and more about lasting impact.

Take the Long Beach Post.

It was bought by a group focused on community benefit — not just profit. They even set up an “ethics wall” to separate operations from influence.

David Sommers, the publisher, says these kinds of investors give local journalism space to breathe — and grow.

Government support is also on the table — though it comes with debate.

In Canada, public policy has long supported journalism — postal subsidies, funding for public broadcasters. Now, the Online News Act aims to make platforms pay for content. Google has agreed to $100 million a year — distributed via the Canadian Journalism Collective.

Other tools include the Journalism Labour Tax Credit — and the Local Journalism Initiative, which funds roles in underserved areas.

In the U.S., groups like the Rebuild Local News coalition are pushing for policy solutions — tax credits, local ad spending requirements, public service programs for journalists.

States like New Jersey and California are already investing in these ideas.

New York City now requires half of city agency ad budgets to go to community and ethnic media.

Canada’s looking at new regulations too — like mandatory notice periods before outlets can be sold or shuttered.

Ontario has pledged 25% of its ad dollars to local publishers.

Now... about Google and Meta.

Should they compensate publishers? That’s still a major fight.

A Columbia University study, led by Anya Schiffrin, estimated they owe U.S. publishers between $11.9 and $13.9 billion a year — based on the value of news on their platforms.

Google and Meta dispute that — saying they already send valuable traffic to news sites.

Critics say that traffic doesn’t come close to what they extract in return.

The debate’s playing out globally.

Australia struck deals. Canada passed legislation — and Meta responded by blocking news entirely. That hit small publishers the hardest.

The Guardian quoted the head of the Australian Broadcasting Corporation calling revenue reform a “mainstream democratic imperative.”

But The New York Post reported that California’s own deal with Google — $250 million over five years — drew backlash. Critics saw it as letting Big Tech off the hook.

Meanwhile, we’re seeing more collaboration.

The Associated Press is a classic example — a cooperative owned by its members.

Today, public media is merging with digital startups: Colorado Public Radio acquired Denverite. W-A-M-U bought DCist.

Melissa Davis of the Colorado Media Project says this model helps scale public systems with startup energy. Rachel Sadon, editor-in-chief at DCist, says it’s about financial stability — and responsiveness.

The Public Policy Forum argues local ownership matters.

They’ve documented cases where it works:

CHEK Media — an employee-owned station.

The Eastern Door — a weekly paper in an Indigenous community, blending ad revenue with nonprofit support.

Cabin Radio — a profitable, digital-first station fueled by ads, donations, and government support.

And My Broadcasting Corporation — a chain built around local sales teams and hyper-local content.

So — is there a single answer?

No. Not at all.

Not yet.

But it’s clear the future will be made of many models — adapted to local needs, local resources.

It’s about finding what works.

Staying rooted in serving the community.

And making sure people — all people — have access to the information they need to participate in civic life.

As Tom Stites put it in Nonprofit Quarterly — the collapse of local journalism is "a threat to democracy itself."

And that demands new solutions.

That wraps up our look at how local news is trying to find its way forward in a challenging financial landscape. There's lots more to unpack here, and we'll definitely be exploring this vital issue more in the future.

I’m Marcus Redd.

Thanks for joining me today.

"On Assignment" is produced by Robert Sterner.

Thanks for joining me for this supplemental episode.

And remember — truth doesn’t trickle down. It rises up.