Journalism needs a new investment model

L'Ami_du_peuple_1We need new capital structures to support new forms of journalism

I confess to being a news junkie. I like nothing better than a pile of newspapers on the weekend. The best thing about travelling to London is that they have even more newspapers than we do – a stack of The Guardian, The Independent, The Times and the Daily Mirror literally takes hours of pleasure to consume. I have tried to go digital but at the end of the day paper is just better. I can read more stories, more quickly with a newspaper than I can online.

But I admit to being very concerned as to whether I will be able to enjoy my addiction in coming decades. But the loss of the smell of news print in the morning is nothing compared to the loss of quality journalism itself.

There is a lot of discussion about the future of newspapers. They not only face the growing threat from social media, but they have investors who demand a return on investment. An additional threat we should be worried about is the Federal Government’s ill-thought idea to legislate prison sentences for journalists that publish restricted government content.

Today’s Fairfax newspaper illustrates the problem. On one hand we have a glowing obituary to one of the icons of Australian journalism, Michael Gordon, who passed away at the age of 62. In the same pages there is a puff piece on drones with the journalist disclosing that Telstra had paid for a trip to the Gold Coast.

Are we witnessing the “passing of the elves”? Will corporate content continue to bleed into papers so that in the future it becomes hard to tell what is independent news and what is corporate spin? Will we produce a next generation of journalists of the same kinds of quality as Michael Gordon?

To answer this I believe we need to go back in history. The small number of corporate newspapers we have today was not always the case, During the French Revolution for instance (between 1789 and 1799) France had over 1,300 newspapers. The image in this post is of the L’Ami du people, complete with the blood stains of Marat who was stabbed in his bath whilst reading the paper .

Diversity of news is a great thing. Different thinking supports a vibrant democracy. Whilst in the last decade we have seen old mastheads struggle, we have seen the emergence of new forms of journalism. One of the best examples is Michael West, one of Australia’s best investigative journalists, who has established his own online publication (which my wife and I are proud to sponsor. See

Outside of the heroic efforts of individuals though we have a structural problem which is that we lack the capital structures to support not-for-profit investment vehicles.

This wasn’t always the way. The structure of capital that we have today has not been fixed over time, and may therefore not stay the same in the future. In the 1870’s for instance cooperatives were a rising form of organisation with 334 cooperatives organised in that decade in the United States. The Knights of Labour, which at its peak had almost a million workers, were responsible for organising around 200 industrial cooperatives around this time. Friendly Societies and mutual insurers were another form of collaborative capital that has been around for hundreds of years with members contributing to a mutual fund which enabled them to receive benefits at a time of need. By the late 1800’s there were around 27,000 registered mutual societies.

Impact investments are rising as an alternative investment opportunity. But to make them scalable we need to develop the products that have the risk and return characteristics that investors demand. If we can do that we can create an impact investment bond market that provides the market structure to support not-for-profit investments. With my colleagues we have been working on a new model of community bonds that is aimed at addressing the risk and return question.

Journalism has been the heart of civil society for the last two hundred years. We not only need to fight to ensure that quality journalism survives, as a society we need to develop the capital structures that can support future not-for-profit news organisations. Journalism needs to be the focus of impact investors.

Originally published LinkedIn February 6, 2018


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