CHICAGO (CBS) — The Chicago News Cooperative has suspended publication, after 2 1/2 years of providing local news articles online and content for the Midwest pages of the New York Times.
Editor and chief executive officer James O’Shea, a former managing editor of the Chicago Tribune, placed a notice on the CNC Web site Tuesday announcing that effective this coming Sunday, the cooperative would halt publication “so we can reassess our operations and determine if there is a more sustainable path to the future.”
Effective Sunday, O’Shea wrote, the nonprofit cooperative will no longer provide content to the Friday and Sunday editions of the New York Times.
The problems that led to the decision stemmed from a lack of funding, O’Shea wrote.
“Unlike similar start-up efforts like the Texas Tribune in Austin, the Bay Citizen in San Francisco and ProPublica in New York, we never recruited the kind of seven figure donations from people of means concerned about the declining quality of news coverage around the country,” O’Shea wrote. “As a result, CNC never raised the resources to make investments in the business side of our operation that would have generated the revenue we needed to achieve our original goal – a self-sustaining news operation within 5 years.”
There are also unresolved questions about the tax status of the cooperative, and a “change in circumstances” that led to doubts about the economic wisdom of a business relationship between the CNC and the New York Times, O’Shea wrote. He did not go into detail about the “change in circumstances.”
But in an article posted this past Friday, the Chicago Reader’s Michael Miner reported that O’Shea asked the New York Times for the financial support required to continue the CNC, and the Times said no.
The reason was that the CNC did not bring more advertising to the Times or increase its circulation to the point where the Times thought funding the CNC was worth the investment, Miner reported.
The tax status questions stemmed from a recent IRS ruling, in which foundations and corporations were told they would only earn tax benefits from donations for particular CNC projects, and not donations that were just intended to sustain the CNC’s operation.
O’Shea wrote that he hopes the cooperative will not shut down altogether.
“In the coming days and weeks, we will be examining our potential to see if we can identify an alternative path and preserve some of the journalistic assets we have developed,” he wrote. “Continued support is welcome and would help us figure out the best path for CNC.”
O’Shea emphasized the need for public service journalism, and called the CNC “an experiment in trying to figure out a way to finance accountability journalism,” which he wrote that many news organizations have abandoned.
After its launch, the CNC some many of the city’s best-known print journalists. Longtime Tribune chief business correspondent David Greising signed on as general manager and deputy editor; former SouthtownStar columnist Kristen McQueary signed on to cover state government jointly for the CNC and WBEZ-91.5 FM, and Reader reporter and columnist Mick Dumke signed on as a CNC reporter – although he has since returned to the Reader.