Updated: Delaware sees a $4 million investment in local news as print reporting resources dwindle

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By Andrew Sharp

Sharp is a Delaware-based freelance reporter. The Delaware Journalism Collaborative, of which Delaware Business Now is a member, supports Sharp’s reporting.

To say the newspaper business is struggling is a bit like remarking that Republicans and Democrats don’t always get along. 

Both are obvious, but you might not realize they may also be connected — there’s evidence that your local paper’s disappearance could also hurt your friendship with the family next door. You know, the ones who belong to that other political party and put up obnoxious signs in their yard. 

To address problems like these, extensive efforts are underway to revitalize local news coverage, including in Delaware, where the state has recently seen more than $3 million in philanthropic investment in news. Here’s why journalism advocates say these efforts matter and how it all might help you and your neighbors understand each other better. 

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Two trends

If you have the pleasure (or misfortune) to sit next to an old newspaper editor at a bar, you may find yourself regaled with tales giving the impression that in the old days, dump trucks full of cash used to pull up to the newsroom a few times a week and unload. While these reminiscences might carry just a hint of nostalgia, it’s true that gathering the news used to be good business in the past. Today, a staggering amount of revenue has vanished, along with jobs, leaving communities small and large without many of the people who used to tell their stories. 

“Financial instruments, hedge funds, you know, chain news organizations have cut to the bone and then cut further than that,” said Chris Krewson, executive director of Local Independent Online News Publishers, which offers support to nearly 500 newsrooms ranging from tiny to small but growing.  

At the same time, the rancor and division in the United States have reached a pitch that is increasingly compared to the time of the Civil War — a conflict in which more than half a million Americans shot each other dead. We’re not there yet, but on Jan. 6, 2020, a mob did storm the U.S. Capitol building, and people died. 

Peter Kratofilow, former chair of the Western New Castle Region Republican Committee, sees polarization in both parties.

Delaware has seen much the same polarization as other parts of the country. 

“To say it’s polarized would be an understatement,” said Peter Kratofilow, former chair of the Western New Castle Region Republican Committee. A history teacher and pastor living in Newark, he sees that trend in both parties in Delaware. 

There are lots of reasons for polarization, but believe it or not, the fact that your local newspaper has had to make big staff cuts seems to be a contributing factor.  

The financial problems of your local newspaper and polarization might not seem obviously connected. Sure, you’re not reading as much about the fire company’s spaghetti dinner or what the mayor said yesterday, but how is that divisive? 

“To build empathy, we have to understand other people’s experiences and stories, and how they got to the values and beliefs that they hold. And that is, I believe, a huge part of what local news and information does,” said Allison Levine, founder of the Delaware Local Journalism Initiative. (Important note to readers: LJI is the parent organization of the Delaware Journalism Collaborative, which is reporting this story.) 

National news takes us to the level of 375 million people, but local news brings us back to a human-to-human level, Levine said, and that kind of connection is important to building a healthy democracy and reducing polarization. 

There’s a potential bright spot for journalism outlets in Delaware. Just this fall, funding institutions nationwide committed to investing $500 million in local news in the next five years. In Delaware alone, since 2021, at least $2.7 million in nonprofit funding has already been awarded to support local news efforts. There are also plans in the works for a new nonprofit news site, Spotlight Delaware, similar to several others that have popped up around the country in recent years. 

Restoring local journalism is not about finding new jobs for a bunch of newspaper reporters, Krewson said. “It’s about healthy, democratically informed societies. It’s about making where you live a better place.” 

Locals offer a similar take. 

“CBS is not going to cover a school referendum in Laurel,” said Bob Wheatley, chairman of the Sussex County Planning and Zoning Commission, who lives in the area. “ When you decide on whether or not you want to support a school tax referendum, well it’s pretty important to know what they’re going to do with the money, what their track record has been … it’s information for decision-making.”

Also, a lack of local news can push us further into our corners when many times there’s a middle ground, noted Dan Cruce, chief operating officer for the United Way of Delaware. Too often, people get their news from sound bites or Instagram, he said. “To have some stories that come through our local community, from a local source, that push a little bit more (in depth), I think that can be very helpful with the polarization.” 

United Way’s Cruse sees a lack of local news moves people into places where there is no middle ground.

Less news, more division

The causes of polarization are nuanced, but multiple studies have found a strong correlation between less local news coverage and divided citizens. 

Take voting, for example. Researchers have found that when local news shrinks, fewer citizens punch a button for multiple parties in the voting booth — picking a GOP representative and a Democratic president, say. This is one sign of polarization. 

Also, over the decades, as local newspaper numbers plummeted, polarization numbers veered sharply upward.  

Just because polarization worsens at the same time as newspapers shrink doesn’t prove this is the cause. Many factors contribute, but the research does point to less local news coverage being a possible factor.

Why is that? Researchers theorize that ownership of news outlets gathered into fewer corporate hands resulted in more partisan news coverage. 

Researchers also describe a sort of trickle-down division over the years: People became increasingly focused on national politics, where party leaders were ever more divided, and paid less attention to local news. Communities then started reflecting the national schism. If you depend on Fox and CNN rather than your local paper for coverage, your views may be more influenced by national opinions. 

Wheatley has experienced that impact. He’s run for local office twice, and “The question I got asked more than anything else was, who did I support for president? And my question to them would be, what does that have to do with the job that I’m seeking?” 

He added, “You’re running for County Council, people want to talk about abortion. And it’s because that’s what they hear about all day long.” (If you’re wondering, neither Sussex County Council or your local school board determine state or national abortion policy.) 

Kratofilow has seen this too. “I don’t really hear too many talks about potholes or how the community is going or if the sewers are working or not … and I think those are the issues that affect them more than whatever happens down in D.C.”  

Wheatley also lamented the shift from more fact-based reporting to a 24-hour news cycle full of commentators giving their opinions. On the local level, the journalism he’s seen is generally accurate, he said, but he doesn’t know how it can compete with national TV. 

Local news outlets around the country are on life support – or dead

A thorough review of the state of local news in 2023, led by the Medill Local News Initiative at Northwestern University, found the nation has 204 entire counties that are complete news deserts, with no newspapers, local digital sites, public radio newsrooms or the like. Another 228 counties are in danger of ending up that way. 

While that’s out of more than 3,000 counties, this is only a list of those with no news outlets at all. 

“Residents in more than half of U.S. counties have no, or very limited, access to a reliable local news source — either print, digital or broadcast,” according to the report. 

In Delaware, every county has a newspaper, radio or TV station, usually several. But some towns or regions still have little coverage — rural, northwestern Sussex County up into southwestern Kent County being one notable example. Perhaps even more striking is the absence of a thriving news outlet in the Middletown, Odessa, and Townsend area, despite its burgeoning population. In places where news outlets do exist, the staff has often shrunk to a startling degree. 

Kratofilow said when he lived downstate, the local TV station often covered local happenings. But upstate, a lot of smaller stories get missed. 

“If something happens in Bear, or Glasgow, or Middletown, if you talk to people, they’ll say, ‘Well, this isn’t going to make NBC, Delaware Online’s not going to cover it,’” he said. “It’s not major enough to make it.” 

Cruce of the United Way divides his time between Rehoboth Beach and Wilmington. There is news coverage in both these places, but some stories are missed, he said. 

At the beaches, news organizations often do a good job of covering the positive news, but have limited geographic area and are missing some of the in-depth coverage, he said. In Wilmington, there’s big-picture coverage (which he sees as often negative) but a lack of positive news about smaller, local efforts. 

The shakeup of the news industry that has cost many communities their local paper has been driven in large part by the advent of the internet. Media researchers note that people can turn to social media, national news websites, sports outlets like ESPN or the Athletic, and Craigslist rather than the roll of newsprint that used to land on their doorsteps every morning. 

Levine said that about 50 percent of local papers’ revenue used to come from classified ads for real estate, housing, and automotive. “All of that went away. And it is not coming back.” 

Allison Levine is making a presentation on the Delaware new initiative.

Writers composing pieces about the news industry frequently reach for adjectives like “grim,” “stark” or “dire.” From 2008 to 2018 alone, the newspaper industry experienced a 68% drop in advertising revenue, the Brookings Institution reported.  

That’s a lot of money — estimated at around $30 billion.   

Outlets had the idea that clicks on online stories might someday equal income. Now, there’s a recognition that simply shifting from print advertising to digital advertising isn’t going to work, Levine said. 

“The digital advertising revenue is a joke compared to what we used to see in print advertising revenue,” Levine said. 

But gathering the news still costs money. 

“It’s expensive to produce news. It’s expensive to pay people to go and be reporters and … to dig into the possibilities and to understand different people’s interests and present that information,” Levine said. 

News organizations have been working hard to figure out how to survive this shift, and as the statistics show, they’re often not doing very well. 

That doesn’t mean the whole outlook is dire. 

Christopher Wink, a co-founder of Technical.ly, a Philadelphia-based regional online publication that covers technology and entrepreneurs, is a survivor, a term he embraces a bit wryly. His business has lasted 15 years come February.

“Someone recently introduced me as having founded one of the, what was the phrase, ‘longest surviving local online news sites,’” he said, which seemed like a sideways reference to the way “a lot of us have struggled to last.” 

Technical.ly’s Chris Wink does not mind being called a media survivor.

He’ll take it. 

For Technical.ly, survival has involved relying on not only the wealthier sponsors in the tech community and native advertising (articles written by sponsors), but also money from grants and even some recent experimentation with data services.    

Doug Rainey, who runs the Delaware Business Now website and email newsletter as a one-man shop, has also found a niche and makes a profit on his venture, although he’s not getting rich. But he notes that not everyone has the luxury of a little startup money and a cushion of time to build. 

Other Delaware outlets are staking out their own spots on the raft and staying afloat. However, they face a tough truth about journalism. 

“It’s not a good business, fundamentally,” Krewson said. “… The motivation for most smart business people is making money. And if you want to make money, there are much better, easier, and faster ways of doing that.” 

Levine emphasizes the focus needs to be on saving news, not newspapers. 

“Local news is not dying,” she said. “Local news is evolving … I think just in the past three years, we have really seen a shift in the national conversation about this, because it is much less pessimistic.” 

Enter grants, donations and other philanthropy

If money from advertisers and subscribers isn’t sufficient, can donations make up at least some of the difference? 

There’s been a shift in attitude on the part of nonprofit funders, Levine said. She’s seen it firsthand through her role with the Delaware Community Foundation, where she worked for years before stepping away to focus on building up local news.

There used to be a general sense that since the news industry used to make gobs of money, they just needed to get their house in order, she said. “If they just got the right business people in there, and ran it like a real business, they’d be fine.” 

Now, she said, “What’s exciting here, I think, is that the philanthropic world, including foundation funders, community foundations, corporate funders, and individual donors have recognized that local news and information is not just a broken business model. It’s a broken business model that is critical to our democracy and our communities. And they are stepping up to make it work.” 

Media Impact Funders, an organization that brings together groups supporting the arts and public interest journalism, partnered with several other organizations to survey philanthropists and news organizations alike on the ways outlets are getting support for their reporting. It found that in the past five years, more than half of those funders surveyed said they had increased their grants to journalism, and a similar share also planned to increase that giving in the future. 

Where are those millions of dollars going? One destination is a proliferating number of nonprofit newsrooms, with organizations like Spotlight PA, the Texas Tribune and Vermont Digger, to name some of the larger and more successful outfits. 

Nonprofits make up a slightly growing share of LION Publishers, where about 35% of newsrooms are some flavor of nonprofit, according to Krewson, the executive director. That’s an increase of about 5% in the past four or five years.   

Just because a news organization is a nonprofit doesn’t mean they’re dedicated to charity work. It’s more about tax status than business model or approach, Krewson said. Also, the little for-profit shops in LION aren’t exactly earning fabulous money or spinning off dividends. 

The idea of a nonprofit, said Tom Byrne, news director at local National Public Radio affiliate Delaware Public Media, is that the organization isn’t squirreling away donations, but is reinvesting it into the operation. 

There’s another reason behind the flow of donations to news, according to Wink. It’s not only that funders think journalism is needed; they also need an outlet to spread their message. 

Those in philanthropy circles had long assumed news outlets would be able to share their stories, Wink said. “It’s not true anymore.” 

Cruce said that sometimes organizations like the United Way have to rely on Constant Contact or other means to distribute information. 

“It’s not coming from a unified, professional journalistic source. It’s me writing some things,” he said. 

Nonprofit funders are mission-driven, and so are many journalism outfits regardless of structure. They share a belief in the importance of what they do and an idealism about what journalism can accomplish. 

It’s a bit like coffee fanatics who dream of running a coffee shop. It seems like a simple idea: People love coffee and want a place to hang out. But when the entrepreneurs discover that even charging eyebrow-raising prices for fancy drinks doesn’t pay the bills, they start selling coffee makers, T-shirts, brownies, books and anything else that might ensnare someone in the mood for caffeine. They do what it takes to keep the shop open. 

Similarly, newsrooms try various ways to earn money so that they can continue reporting the news, like holding events, selling merchandise, or even owning other businesses, like the Washington Post did for years with Kaplan

“This is a mission-driven industry,” Krewson said. It’s one that attracts “those kinds of people, the only people crazy enough to launch a new startup are those that believe so strongly in it, that they’re willing to shrug off the warning signs and damn the torpedoes and do it anyway.” 

Money coming to Delaware 

A portion of the nonprofit money headed to Delaware over the past few years comes from the Solutions Journalism Network, which has allocated money for the Delaware Journalism Collaborative (which means SJN is also indirectly funding this article). 

The Collaborative has a two-year, $200,000 grant from SJN to report on solutions to polarization in Delaware communities. Member organizations contribute articles, which all members can share, free of charge, and which are also available to the public at no cost. 

In a five-year project that ends this year, the Solutions Journalism Network has supported 16 such collaboratives around the country, the vast majority of which are still working together, according to Liza Gross, a senior advisor for SJN. Most of the collaboratives plan to continue their work even after their two years of funding runs out, finding ways to continue with new sources of revenue and structures that can sustain them, she said. 

SJN’s goals include building trust in the news by reporting on possible solutions, not just problems, and helping news organizations share their strengths to have more impact than they could alone, Gross said. 

The Longwood Foundation is a local funder that has also increasingly contributed to journalism. In the past couple years, it has made grants of $800,000 to DETV, a Wilmington-based TV station founded by Ivan Thomas, and $250,000 to Technical.ly. Both grants aim to enable the organizations to expand what they’re doing in Delaware. 

Thomas said DETV, which started in 2019, will use the grant to grow the organization, including by hiring more people and purchasing equipment. His vision is to build an outlet that offers hometown information focused on Delaware that brings the community together, he said.  

Longwood also gave $275,000 to Delaware Public Media in 2022. General Manager Pete Booker wrote in an email Longwood has been a supporter ever since DPM’s early days, and this grant will help the station expand its operations.    

Delaware Public Media says the Longwood Foundation is a long-time supporter of the public radio station.

The foundation is also contributing $800,000 to the launch of Spotlight Delaware, a new nonprofit newsroom that is also part of Levine’s Local Journalism Initiative and a major part of her efforts to find new ways to deliver news. 

Spotlight Delaware also got a major boost in January of this year, when the American Journalism Project announced a $1 million grant to help build the organization. 

“We’re building Spotlight Delaware with our communities and, with the help of the American Journalism Project, we’re building it to last,” Levine said in a statement when the grant was announced.

Her vision is not to compete with existing outlets, but to find stories that these outlets can’t get to, she said. Spotlight Delaware would then make these stories available for free to other news outlets and find other innovative ways to deliver the news to communities.  

“There are more stories than any organization could possibly cover,” Levine said. “Our interest for Spotlight Delaware is in helping fill the gaps.” 

The organization recently announced former Delaware Business Times Editor Jacob Owens as its editor-in-chief and plans to begin rolling out its operations in 2024.  

“We will not have to generate profit for shareholders,” Levine said. “So by removing that profit motive, it reduces the pressure on a nonprofit news entity to allow us to cover some of these issues and stories and topics that we know are important to the community.” 

Philanthropy isn’t a news utopia

Just as with the old advertising model, there are challenges and drawbacks to relying on philanthropy to pay for news coverage.

One is ethical. Everyone could tell who was backing newspapers in the advertising days, just by looking at the ads, Media Impact Funders noted. But not all news organizations have developed clear guidelines for how they will acknowledge their donations. 

And foundations, like advertisers, have their own motives.  

Lion’s Chris Krewson says nonprofit sites have to be well managed..

“The risk of conflict of interest has grown alongside funding,” the Media Impact Funders report notes. “More funders are financing journalism in areas where they also do policy work … and four in 10 outlets take money to do specific reporting suggested by a funder.” 

That said, the report found that most outlets do have ethical guardrails in place to address these conflicts, like policies about disclosing their donors. 

Another issue is that while the for-profit model has struggled mightily, it’s not simple to throw a switch and replace advertising revenue with donations. 

“It’s no panacea, right, just saying, ‘We’re nonprofit,’ doesn’t mean the money automatically flows in,” Krewson said. 

“You still need to be well-managed. You still need to worry about a budget, you still need to worry about making payroll,” Gross said. She adds while philanthropy is essential, news organizations also have a responsibility to be entrepreneurial and generate value.

Wink said philanthropy can’t be seen as a shortcut, where someone just cuts you a check, and then you can do your work. Having to bring in revenue from multiple sources is difficult, but pushes outlets to make sure their coverage matters, he said.   

He sees such donors as playing an ongoing role, but not an oversized one. They can help his organization continue to offer news without a paywall and support storytelling about communities that otherwise might not get coverage. 

Thomas, for one, sees the DETV grant as a one-time aid to build momentum, rather than an ongoing revenue stream. “We have a sustainability plan,” he said. 

Donors often prefer to offer money to help news outlets get started until they can support themselves. But Levine argues for a different attitude. 

“Funders don’t hesitate to support the arts. It’s understood that this is something that is critical to our communities, to our culture, to support the arts, and that it just is not sustainable through ticket sales. Why then would we consider local news and civic information that is critical to our democracy, to our communities, and to equity, any less important?” she asks. 

However, local news organizations are reborn, and it will take time and likely an enormous amount of commitment. 

“There are no short-term solutions or answers or easy paths to this transition that we’re enduring,” Krewson said. 

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