What does it mean to be a “sustainable” news business?

To industry insiders, Bklyner seemed like a standout success story amid the turmoil of local news. 

Founded in 2016, Bklyner became a trusted news source for New York City’s largest borough, building a newsletter audience of more than 30,000 readers, earning financial support from more than 1,700 subscribers, and winning awards for its investigative journalism and local coverage.

But Bklyner suddenly closed this year, and for our team at LION Publishers, the reasons sounded awfully familiar. 

“Frankly, I’m burned out,” Bklyner founder Liena Zagare wrote. ”[And] since I never figured out how to get paid regularly for the many hats I still wear… I cannot hire someone to fill in while I take the time off that I need to make sure that I, too, can be sustainable.”

Bklyner isn’t an anomaly. 

Over the last twelve months, LION’s Director of Teaching & Learning Lisa Heyamoto and Product & Data Manager Chloe Kizer have led our effort to understand sustainability by looking under the hoods of dozens of independent news businesses, and what they found is that revenue growth isn’t the only indicator of a sustainable news business — or even the best one. 

In the long run, our theory is that sustainability for independent news businesses exists at the intersection of operational resilience, financial health, and journalistic impact, and foundational weaknesses in any one of these areas can cause the entire operation to (at best) underperform or (at worst) fall apart. 

Here’s what we mean by each of those terms:

• Operational resilience: Without a company culture and systems, processes and policies designed to support staff and manage growth, news businesses will experience burnout among the very people whose talent and buy-in are critical to their success. 

• Financial health: Without a plan for earning money, managing a budget, and monitoring revenue and expenses, news businesses will reach the end of their financial runway without the tools and data they need to acquire more dollars or right-size their operations. 

• Journalistic impact: Without a track record of producing meaningful and demonstrable impact in their communities, news businesses will gradually (or suddenly) lose the backing of the investors, sponsors, and readers whose support fueled their growth. 

We’re intentional to call our definition of sustainability a theory: We still have many questions to answer about the path to sustainability for businesses of different sizes, ages, and revenue models. 

And in the spirit of learning out loud, we’re eager to share our working model of sustainability for independent news publishers, the process that led to it, and the ways we plan to apply it in 2022 to help our members build stronger and more sustainable businesses.

The ‘Aha’ Moment: How the first version of our Sustainability Audit taught us that financial success depends on a strong operational foundation 

Nearly a year ago, we announced a new program called the GNI Startups Lab that would help publishers design and execute a revenue-generating experiment to accelerate their path to sustainability. 

In partnership with the Google News Initiative, we selected twenty U.S. and Canadian publishers as finalists for the program and invited them to participate in the first version of our LION Sustainability Audit, an assessment tool to select the final cohort. (Hat tip to Janine Warner, who shared a similar assessment and process for program selection from her work at SembraMedia.) 

We expected these audits to help us identify specific ways that each organization could sharpen their revenue strategies or business operations before launching into a new tactical experiment. 

Instead, we learned that the majority of news businesses applying for the program had even more foundational needs that needed to be addressed before they were ready to focus on scaling revenue. This is a theme we saw repeated in other programs we ran over the course of the year.

Here’s how Lisa and Chloe explain this “aha” moment:

Lisa: We learned right away that many publishers struggled to answer some of the fundamental questions we asked in that first audit, and that they didn’t have much in the way of organizational or financial documentation. For example, several didn’t have a profit and loss statement for their news business. That was our first clue that folks were experiencing some operational pain points that might be holding them back. 

Then we conducted interviews to dig more deeply into their answers, and nearly every news leader said they felt that interview was the therapy session they didn’t know they needed. They had never been asked about their news business so holistically, or in such detail. It brought up their profound passion for journalism and community but also a deep well of anxiety and burnout. Folks had been building their businesses on the fly through necessity, but lacked the time and expertise to do the foundational work that would help them build it more durably. We were incredibly inspired, and re-energized by our mission to help.

Chloe: As Lisa alluded to, we learned that operations work typically, and understandably, falls to the wayside when an organization’s focus is supporting their community and generating the financial support to support the staff. We could see from the audits that journalistic impact, financial health and operational resilience were connected and equally important for the long-term viability of an organization, and it was also our job to show the publishers that was the case. 

Lisa: These findings led us to make a pivot. Originally, we’d designed the Startups Lab with the focused goal of helping publishers grow revenue, but we ended up having to design additional help to address some of these operational issues. We added training sessions on documentation, capturing the right analytics, clarifying organizational roles/responsibilities and right-sizing your tech stack. Coaching sessions wound up being as much about operational strategy as they were about revenue experimentation. We were so gratified that many of these news business publishers explicitly said the program helped them understand how to put as much emphasis on the word “business” as on the word “news.” 

Putting Numbers To It: How the Sustainability Audit v2 gave us more useful data for benchmarking and a better way to identify strengths and opportunities for growth 

The first version of the Sustainability Audit leaned heavily on interviews with our Startups Lab cohort. That qualitative data helped us better understand what questions we needed to ask to evaluate a publisher’s foundational strengths, weaknesses, and opportunities. 

The next step: developing a survey to capture more quantitative data from publishers, and a process for turning that data into actionable insights that are as helpful to the Audit participants as they are to us. 

We tested this survey-based approach in our LION-Meta Revenue Growth Fellowship, a pilot program with the Meta Journalism Project that provides independent news businesses with the funding they need to hire an employee focused squarely on revenue growth. Here’s what we learned:

Chloe: The publisher stories in the first audit were powerful and informative, but each of those stories existed in isolation. So in the second iteration we gathered more structured data to place each organization within the collective context of their peers.

We went from having four in five of the questions as open-ended qualitative responses to a more 50/50 split between quantitative data and qualitative elaboration. We almost doubled the number of questions between the audits and collected more specific data. 

For example, this question — “How satisfied do you think your team is? Why/why not? What do you wish you could do to attract and keep talented staff?” — became these questions:

• “On a scale of 1-10, how sustainable does the workload and pace feel for your staff?” 
• “On a scale of 1-10, how confident are you that your current staff members will stay with the org for the next 12 months and beyond?”
• “On a scale of 1-10, how competitive are the salaries you offer your employees compared to similar opportunities in similar markets?”

That shift also made it easier for us to see patterns. For example, in our last batch of audits we saw that 16% of organizations listed reader revenue as a top performing revenue stream. However, of those organizations, a majority of them have membership tied with another revenue stream for effectiveness, showing us that while reader revenue programs can be effective at diversifying revenue, it is not commonly the dominant driver of revenue.

Once enough organizations have completed the audit, we will be able to develop benchmarks based on this data. Our hope is to develop an outline of the pathways that local independent news organizations take on their way to sustainability. 

Lisa: We also learned from the second round of audits that the operational pain points we’d encountered with the 10 publishers in the Startups Lab were not an anomaly, but were indicators of a more widespread challenge. 

So instead of diving straight into programming to help these publishers hire a revenue fellow, we took a big step back and designed programming to ensure these organizations were operationally ready to support a new employee focused on revenue. The RGF program was a natural place to pilot this work because preparing for a new hire requires a higher level of operational readiness, kind of like cleaning your house before you invite someone over. 

Our three-month operational readiness training used the audit data to identify specific gaps, like goal-setting, financial planning and employee onboarding, and provided support to fill them. We’re hoping to expand this programming support to our broader membership next year. 

The Path To Sustainability: How we’ll use the Sustainability Audit v3 as a diagnostic tool for identifying next steps and helping our members level up

The Sustainability Audit started as an effort to simply understand the path to sustainability for independent news businesses. Now we want it to become a more useful tool for publishers trying to get there.

In 2022, we’ll apply everything we’ve learned about sustainability so far to help more of our 400+ members take their next big leap forward. With some more work, our Sustainability Audit will be our primary tool for identifying what those leaps should look like for different member businesses.

Here’s how Chloe and Lisa are approaching that challenge:    

Chloe: The audit is a time-consuming endeavor for newsroom leaders who have little free time, so we have always sought to make the output useful to the participants. In the first iteration we supplied a SWOT (strengths, weaknesses, opportunities, threats) analysis. In the second iteration we supplied a rubric calling out wins, opportunities for improvement, recommended next steps, and resources. 

Now, we’re designing the next iteration of the Sustainability Audit as a needs assessment. Not only will each participating organization receive a document that provides commentary on their strengths and areas of improvement, but they will also receive a personalized list of asynchronous resources, connections to peer-learning opportunities and coaching, and, where applicable, placement in LION programs that will help them continue to develop as a business. 

To achieve this goal, we’ve structured the audit to be based on a series of stages and associated milestones.

Lisa: News businesses need different support at different points, and that’s informing our 2022 programming. 

Given what we learned from the first two audits, the majority of our members are in the earlier stages on the continuum, so we decided to prioritize our support there. Building operational resilience will be the cornerstone of that assistance, and we plan to roll out a slate of trainings and resources that will help publishers get to a place where they have a firm foundation on which to grow revenue and support ever-more-impactful journalism. We’ll also continue to offer programming for those looking to launch a journalism startup, and programming for organizations, with strong operational foundations, to grow revenue.

As Chloe mentioned, the audit will be our diagnostic tool to direct folks to the support they need that ideally meets them where they are. We know that news leaders are often overworked and overwhelmed, so we’re building an on-demand learning portal where our members can access a host of trainings, resources and templates whenever they want. We’re also hoping to offer a la carte coaching to complement the asynchronous curriculum and help our members connect ideas to execution. 

It all points back to our hypothesis that sustainability is achieved through a series of small but impactful steps rather than big leaps, and our support will mirror that approach. 

Want to learn more about LION’s Sustainability Audits, or how you can sponsor them for news businesses in your network? Email us at [email protected], and sign up for our weekly newsletter to get updates on our latest research on news sustainability.