Non-Profit News Deal between Millionaire Hellman, KQED Falls Apart

According to sources close to the parties involved, the deal to create a much ballyhooed non-profit local news organization in San Francisco based at public broadcasting station KQED to be financed by philanthropist Warren Hellman has collapsed.

Rumors of troubles surrounding the deal, which also involved the University of California, Berkeley, Graduate School of Journalism (GSJ), and -- according to some reports -- possibly The New York Times, have been circulating in Bay Area journalism circles for months.

Blending a set of disparate institutions is always a difficult task, of course, but this particular project appeared from the onset to be ambitious beyond realism. KQED, as I have reported here, is an organization beset by internal controversies over how to allocate resources among its various verticals -- radio, TV, the web, and far-flung satellite stations outside of the Bay Area.

The GSJ does not have a strong presence in the city of San Francisco, which from a journalistic perspective has to serve as the news hub of any such operation, although in recent years, at least one professor has instituted a promising experiment in "hyper-local" reporting in the city's Mission District.

Sources have told me that the various parties to the negotiations have not been able to come up with a consensus over how to run the new news organization, and as of today, financier Hellman's patience has apparently run out.

KQED, meanwhile, is in the midst of yet another contentious leadership change. According to sources, its Board of Directors has recently rejected all three internal candidates for the job being vacated by outgoing President and CEO Jeff Clarke.

The GSB has also suffered from a leadership vacuum in recent years, with an interim dean leading the operation during a long stretch when no suitable replacement for departed dean Orville Schell could be found.

My reaction to the initial reports that the Hellman project has collapsed is that this is not necessarily bad news. Last fall, when the project first came to light, I raised a number of issues that such an organization would need to address before it could succeed:

New media NPOs need to make sure they commit themselves to fundamentally rethinking the way they go about covering their communities before they launch. The old ways of doing things will no longer cut it.
Relying on philanthropists and foundations to simply re-invent the wheel of traditional newspapers will not succeed in today's changed media landscape.
Thanks to blogging and social media like Twitter and Facebook, there are many ways to bring the community into the news-gathering process. Striking the right balance between "citizen journalism" and the professional variety will be one key to each new organization's success.
Perhaps even more important to these ventures' success will be facilitating readers urge to share their content. People love to share content. Making it simple to do so means your initial base of readers will do the work of circulating your content via their social networks, thereby vastly expanding the number of eyeballs that see your content.
There must be, from the start, a plan for charging for content. This does not necessarily mean charging for news content, which won't work (yet), but a commitment to development a premium model of tools and services plus exclusive content to be ready when -- a year from now -- Google's micropayment platform for publishers is scheduled to be ready.
Establishing as diverse a set of revenue streams is a much more sustainable model than relying on one investor, or a handful of sources of funding.

If NPOs like Hellman's recognized and executed against these new media "best practices," I argued then, they could soon be on their way to serving their communities in ways traditional newspapers, even in their Golden Age, never did.

But as far as I've been able to determine, few if any of these issues were ever addressed during the negotiations, now collapsed, between the various parties involved in the Hellman project, perhaps because all the wrong people (i.e., the usual suspects) were sitting at the table.

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