When Facebook co-founder Chris Hughes bought the New Republic in 2012, he hoped to find a sustainable business model for the publication. The push for such a model, along with some stunning ineptitude, led more than two dozen staffers and high-profile contributors to walk out in December 2014.
Now, after spending $20 million in a quest for sustainability, the 32-year-old Hughes is putting the magazine up for sale, confessing that he failed to grasp "the difficulty of transitioning an old and traditional institution into a digital media company in today’s quickly evolving climate."
Hughes is still hoping that someday, somebody will find a way to make TNR viable. "The New York Times, The Atlantic, and other traditional outlets seem to have found business models that work for them," Hughes said. "I hope that this institution will one day be part of that list." But he's no longer going to throw money at this challenge.
Apart from the spicy drama around the meltdown of a fabled political journal, this is a familiar story. The fundamental, life-or-death challenge facing nearly all media outlets today is the quest for a sustainable business model. It's incredibly difficult stuff, but there have, indeed, been hopeful signs of models that work. We were among the few defenders of Hughes—who was trashed, in part, because he wanted to move beyond TNR's longtime, but doomed, business model, which entailed rich owners losing their shirts and passing the thing to somebody else. As we wrote in this lengthy piece last year, Hughes was clearly not interested in TNR as a philanthropic endeavor, but as a business project.
So what happens now, with the verdict that no for-profit model may ever be able to sustain TNR?
Well, maybe this is the final end of TNR, a publication that some have argued—most notably Ezra Klein—has been rendered less relevant by a rising flood of opinion journalism in recent years.
Or maybe the next move, to extend TNR's very long life, is to turn the publication into a nonprofit and keep it afloat with philanthropic dollars. There's been speculation along exactly these lines—that Hughes may sell the magazine to a philanthropist who would transform it into a nonprofit.
Would that strategy work?
Maybe, and maybe not. One problem, here, is that the august TNR brand was closely associated with many of its veteran high-powered writers, all of whom fled the magazine. It's now much less of a trophy property for a wealthy donor than was the case a few years ago.
And even if a benefactor could lure back many of the former TNR writers, or recruit some impressive new ones, the question would remain about whether it could regain anything like the influence it once wielded—which would be the only real reason for a donor to sink millions into sustaining the magazine. It's been a long time since TNR was "in-flight reading for Air Force One," and the day may well have passed when any opinion journal can play that role amid an unending deluge of digital information. It's just hard to see TNR's unique value proposition.
On the other hand, we could imagine a scenario for philanthropic resuscitation that goes something like this: A wealthy new owner takes it over, reconstitutes it as a nonprofit, and then invests not just in strong new writers, but in developing a robust fundraising capacity to seek donations and grants. In particular, TNR could seek funding to cover issues of interest to foundations—like, say, healthcare or education—a fundraising model that has attracted serious money for other media outlets. The American Prospect used this approach in the past, doing a series of funder-backed special issues—not a story that ended so well, as the Prospect was ultimately forced to downsize for lack of funding.
However, what the Prospect lacked was a serious sugar daddy who could reliably be a core part of a revenue model that didn't just hinge on foundation grants, but also money from subscriptions and advertising. In other words, with a major benefactor in the mix—one who would give more in some years than in others, depending on how other funding went—the Prospect's model may well have held up.
You could imagine a TNR benefactor who doesn't want to give many millions forever, but who would backstop the magazine on a smaller scale over many years as part of a diversified nonprofit funding model. You could also imagine that person recruiting a board of donors to further diversify the funding sources.
With a core major donor, a cast of smaller supporting donors, and a bunch of foundations in the mix, TNR would have a fighting chance. Meanwhile, it could creatively explore other revenue channels that media outlets have used to survive, such as custom research, events and conferences, specialized newsletters, and more.
Is this all a pipe dream, given the larger, unanswered question about TNR's unique value proposition in this day and age? Maybe. And let's not forget another problem, here, which is that all foundations have agendas, and it's problematic when media outlets rely on this source of funding—a point we've discussed often at IP.
Still, as yet another media publication faces extinction, it's impossible to not look at philanthropic solutions. One of the values of philanthropy, remember, is that it can address market failures. And journalism is one obvious place where markets can't deliver important public goods.