Mississippi Twist: Newspaper Helps Support a Foundation

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By: Jim Rosenberg

In the scramble to find new business models for newspapers, some see charitable foundations as the way to keep newspapers afloat. But in what may be the poorest region in the nation’s poorest state, the Northeast Mississippi Daily Journal is one of the financial engines of a foundation that’s helping improve the lives of its readers.

The Daily Journal’s help in supporting the foundation that owns it, which now helps to fund some 600 initiatives in 16 Mississippi counties, may account for its seeming paradox: sustained readership and advertising support in a region of low educational attainment and income.

“We’re in the community-building business,” says Clay Foster, president of parent company Journal Inc., which includes Journal Publishing newspapers and commercial printing, an online business and Journal Logistics real-estate holdings exceeding one million square feet. All report to Foster, who also was named Daily Journal publisher last summer. “Folks have a connection to us.” Even when disagreeing with the paper, they appreciate its role, which he calls “the key to sustaining circulation and readership over the years.”

The Daily Journal’s unusual business structure dates back to the Great Depression, when unemployed educator George McLean bought what was then the twice-weekly Tupelo (Miss.) Journal. In the early 1960s McLean launched the CREATE Foundation. When he died in 1983, his Journal Inc. stock was transferred to CREATE to ensure local control of the newspaper — and to help fund the foundation and its 10 affiliates.

Even in these tough times, the paper continues to contribute. Though the paper did not disclose results, it said Journal Inc. had an operating profit in 2009.

With a workforce of approximately 200, Journal Publishing circulates 35,000 copies daily and 23,000 weekly. Judging it “in good shape” relative to the industry as a whole, Foster attributes that to circulation, advertising and editorial attention to “a defined market area” served by eight weeklies, which handle their own newsgathering and ad sales, clustered around the daily, which prints everything.

Though the weeklies fared better than the daily in 2009, the latter revived this year, according to Foster, who said Journal Publishing has mirrored the industry in recent years: “The larger the paper, the more impacted it was.” Citing a “not significant” hiccup in 2004, he says, “We’ve had circulation growth seven of the last nine years.” Population growth certainly has not been a factor. While the market’s not dying, he adds, some counties’ populations have declined substantially.

Judging by surveys of its peers by Inland Press Association, Foster says, the Daily Journal and its siblings have always run lean and did not need to do the kind of drastic cost cutting of other papers. It has so far survived the Great Recession without resorting to layoffs, although hiring is still frozen. But after freezing wages through 2009, he adds, “We just announced an across-the-board pay increase.”

Journal Inc. has resisted one industry temptation: Every opportunity to buy papers elsewhere, says Foster, was rejected to “focus all our time and energy” on northeast Mississippi, where the “basics” of strong sales and retention are emphasized, because “good customer service is absolutely critical.”

But another kind of expansion is in the cards. Journal Inc. needs new equipment, so it considered outsourcing, but decided to pursue printing contracts itself and “make that a significant source for our business,” Foster says. One possible customer is The Commercial Appeal in Memphis — which has considered outsourcing to Tupelo, where Journal Publishing, which operates its newspapers and commercial printing, will either upgrade its plant or use a Journal Logistics facility.

CREATE is also weathering the tough times well, and earlier this year became the first foundation certified by the independent Center for Fiduciary Excellence for “adhering to a global standard of excellence for investment stewards” — a “seal of approval” that CREATE President Mike Clayborne says inspires donor confidence.

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