A Dose of Skepticism on Worker Cooperative Newsrooms

A closer look at Defector, Hell Gate and the rest

Welcome to Second Rough Draft, a newsletter about journalism in our time, how it (often its business) is evolving, and the challenges it faces.

The business crisis of journalism, now nearing its 19^th year, has yielded a number of significant reactions, the most important being an increasing reliance on revenue from readers and a flourishing of nonprofits. But there has also arisen a strain of thought that abjures the very idea that journalism should be a business. That approach is the subject of this week’s column.

The current darlings of this rejection of journalism via capitalism are Hell Gate in New York and Defector nationally, both valuable sites with lots of interesting stories. But I want to look at these newsrooms as businesses. And I want to do so skeptically, because the examinations of them to date have mostly suspended the skepticism that I think should be a hallmark of such inquiries.

“The Last Good Website”???

If your first instinct is to think I’m being unfair here, I would point you to the detailed piece on Defector some weeks ago in the Columbia Journalism Review, which was topped with an illustration consisting of a search window into which has been typed: “media industry paycheck that’s not ethically compromised.” The article was then headlined, “’The last good website’”—in quotes, to be sure (it’s Defector’s tagline), but with no question mark.

What makes Defector less “ethically compromised” than, say, the nonprofit, university-affiliated CJR? Well, it’s a worker cooperative, and, we’re told, at senior levels pays below-market salaries. And it decides things by a combination of committee consideration (like whether to cooperate with the CJR piece, and how to price subscriptions) and individual autonomy (over what to cover). Hell Gate is said to have similar virtues.

Have we really come to a point where experienced editors assigning stories, by definition, constitutes ethical compromise? I certainly hope not.

Some things these newsrooms do are less unusual than they may at first appear. They pay decent wages and fair “kill fees” to freelancers—although everyone should, and I assume CJR does. (It should certainly have said so in the piece if it doesn’t.) The cooperatives’ minimum salaries may be higher than at many places, although Defector’s minimum $70,000 is just over the $65,000 established in the new union agreements at the New York Times and Insider, and not much higher, in expensive New York, than the $60,000 for which a Gannett union recently went briefly on strike in much less expensive Austin.

Raising questions

Some things the cooperatives do may not, on balance, make sense at all. Why, for instance, is advertising revenue—which Defector, for instance, doesn’t solicit for its website-- any more corrupting than money from readers? Sure, it is possible for the pursuit of any sort of revenue to undermine editorial independence, but, just as practices have been developed to guard against this happening with large donations or groups of subscribers or members, so guidelines and attitudes with respect to advertising have been in place for decades at leading publications.

A key point here: if you don’t think catering to subscribers can be corrupting, may I suggest you spend a few minutes with the Wall Street Journal’s invariably credulous weekly Mansion section, or ask yourself why the Times ran 13 separate stories on the finale of Succession in one week.

Jasper Wang, Defector’s VP of revenue and operations, wisely observed to me, by the way, that “the operating model (i.e., capital structure, ownership structure, decision-making processes, orientation towards growth/profit/exit) and the revenue model (primarily subscription-driven) are distinct sets of choices.”

Paying below-market salaries for leadership has a surface appeal—I agree that CEO salaries at failing enterprises like Gannett are obscene—but take a closer look. Who can afford to accept a below-market top role, making much less than they could elsewhere to perform similar tasks? Mostly people with established wealth, or high-earning life partners. In a country where the median Black household has just $24,000 in savings while the median white household has almost eight times as much, is that really what we should be fostering?

Apart from leadership, paying less than market can undercut the quality of a newsroom’s work by eventually depriving it of its most outstanding talent. It’s noteworthy, for instance, that the same two Defector staffers whose recruitment was celebrated in a gushing 2021 Washington Post piece are the ones whose recent departures were noted in the CJR article, one moving to the Athletic (which is owned by the Times), one to the Post.

The worker cooperatives generally do offer health insurance, or minimal subsidies to purchase it, but most don’t yet provide any retirement benefits. Defector says it is considering adding this, and I strongly encourage them to do so. In the darkest days of Spring 2020, when the economy was in free fall, I said that we would not cut retirement benefits at ProPublica no matter how far revenues fell short. I advised the same even to those elsewhere for whom the alternative was limited layoffs, and still think that was the right call. Retirement benefits, especially as paid to younger employees, are a critical element of future economic security, no less than health coverage, even if the consequences are not as quickly evident.

In the end, I am happy that Defector, and Hell Gate, and other worker cooperatives, are adding to the great reporting being produced today. If their model is working for their staffs, that’s their business— if you (and they) can pardon the phrase. But before we hold these efforts out as a model for others, they deserve more scrutiny than they’ve received so far. After all, that’s a big part of what journalism is supposed to be about.

Update: This post has been updated to clarify that Defector doesn’t solicit advertising for its website, rather than refusing it altogether.

Second Rough Draft will be off next week for the holiday. See you soon.