The Latest: Akron’s The Devil Strip adopts a co-op model (Feb. 24, 2020)
By: Tesnim Zekeria
Tags: Journalism, Local News, Media, The Latest

THE NEWS

The Devil Strip, an arts and culture alt-weekly based in Akron, Ohio, became the first cooperatively owned news organization in the U.S. last week.

SO WHAT?

Amidst increasing hedge fund control of local newspapers in the United States, some local news publications are building community-based ownership models. In addition to The Devil Strip, publications like Berkeleyside and The Mendocino Voice are also extending ownership to the communities they serve in unique ways.

The Devil Strip’s founder, Chris Horne, began researching co-op models in 2018 as an alternative to the publication’s reliance on print advertising. Co-ops are jointly-owned and democratically controlled companies: Ownership is distributed among a group of shareholders, and each member is allowed one vote regardless of the size of their stake. In 2019, the Devil Strip received a $200,000 two-year grant from the Knight Foundation to support its transition to co-op ownership, and it began selling shares in November.

With this model The Devil Strip can 1) remain accessible in a town where the median income is $36,000, 2) reward existing readers, and 3) increase community involvement. Devil Strip readers who live anywhere in Ohio can become shareholders by contributing as little as $1 per month. Once a reader has invested $330, they become a fully vested shareholder for life. By becoming a shareholder, a reader can vote on editorial projects and budgeting as well as run for the board of trustees.

In Northern California, The Mendocino Voice is working to become a co-op as well. Unlike the Devil Strip, whose co-op efforts are a result of financial pressure, The Mendocino Voice’s move to a reader-worker co-op is largely driven by a desire to ensure equitable and transparent coverage in a place where “minority and poor communities have distrusted the news.” Co-op members will be able to vote on editorial projects as well as the allocation of reporter resources. Last September, the publication received a grant from the Facebook Journalism Project to help with implementation.

Co-ops aren’t the only community-driven business models. In 2018, Berkeleyside became the first news organization in the U.S. to do a direct public offering — a fundraising strategy pitched by a reader. Berkeleyside sold stocks to the community without an underwriter or intermediary issuing the shares. The minimum investment was set at $1,000, and investors receive a 3% annual dividend from their shares. For two years, the publication ran a standalone site on the DPO process, mentioned the DPO in stories, designed marketing campaigns, and held house parties to meet investors. The results: Berkeleyside raised $1 million in capital from 355 of its readers. The average investment was $3,000, with the largest single investment being $100,000.

LOOK FOR

How many local publications adopt co-op models. While this is certainly not only the means of obtaining financial sustainability, the co-ops established at The Devil Strip and The Mendocino Voice may inspire other local news organizations to follow suit.

Additionally, whether these ventures can successfully scale their operations. The Bristol Cable, a U.K. publication founded as a co-op in 2014, currently has more than 2,000 members who pay £3 ($4.20) a month. As its membership base has grown, the publication has had to focus on ensuring that member meetings remain engaging and meaningful. The Cable also reported that as membership growth slowed down, it has had to change its messaging and approach to reach new readers.

Also look for other unique business models. The Salt Lake Tribune, for instance, became a nonprofit amidst financial difficulties. The Chicago Reader also announced that it was transitioning into a nonprofit model beginning in 2020. Other solutions include the creation of information districts, mergers between public media and digital media, support from state-based organizations like the Colorado Media Project, and government funding like the New Jersey Civic Information Consortium.