The old newspaper business model, former Arkansas Gazette Editor Carrick Patterson explained, was to build “a very expensive factory to process expensive newsprint paper and send tons of it out daily by an expensive transportation system only to be looked at once and thrown away.”
In today’s digital world, that won’t work, so Arkansas Times Publisher Alan Leveritt and Director of Development Wythe Walker have hit upon a new business model for profit-making news outlets: taking donations from ardent readers.
As newspapers fail daily and Google and Facebook snap up 70% of the advertising local papers once commanded, Times donors are providing hundreds of thousands of dollars to more than double its staff.
Since first appealing for donations in April 2022, Leveritt has increased his news staff from four to nine, built a subscriber base of 4,000 full-access website readers paying $120 a year, and hired reporters to cover hot-button beats like education, City Hall and investigations.
Along with personal pitches by Walker and fundraising letters featuring Leveritt and his dog, Inca, the Times offers readers a chance to donate with a click online. Many “supporters,” as the Times now calls subscribers, pay a little extra — or a lot — with their monthly payments. Articles online include postscripts urging readers to help.
“Wythe went to work, and he did $110,000 [in donations and grants] in the last six months of last year,” Leveritt said. “This June we raised $24,000 with a letter to our subscribers asking them to support the journalism … and we recently raised $50,000 to fund David as a full-time Arkansas Learns beat reporter.” Leveritt was referring to Times veteran David Ramsey, who has written for The New Republic, Men’s Journal and The Paris Review.
Arkansas Learns is the education overhaul that will give parents state-paid vouchers to send children to private schools, or even to home-school them. Gov. Sarah Huckabee Sanders made the Learns Act the showcase of her first months in office, and Leveritt and Walker say the alternative paper’s readers’ dismay with the conservative governor is clearly helping their cause.
“Sarah’s helping with our traffic,” said Walker, scion of a prominent Little Rock family and a veteran publisher himself. (He once published Arkansas Business.)
“Our traffic is up almost 100% in a year,” Leveritt said. “We went from 220,000 unique website visitors in June of last year to 420,000 this June, and we also had record ad sales for our website in June. These donations are going into our editorial staff, which in turn generates readership, which generates more advertising. It’s kind of a long way around, but we’re very excited.”
Without skeptical journalists demanding answers, politicians and powerful interests go unchecked, Leveritt said. Finding a sustainable way to pay those journalists was essential, but he admits he once doubted that donors would support a for-profit outlet, as opposed to nonprofit news groups like Arkansas Public Radio or the Arkansas Advocate, the Sonny Albarado-led website that recently celebrated a successful first year.
Leveritt was encouraged by other alternative newspapers’ success in building financial support. And in June, the Poynter Institute for Media Studies called for more newspaper giving, pointing out that 70 million people, a fifth of the U.S. population, live in places where newspapers have failed or are dying out.
“Philanthropic giving is becoming more and more important to independent journalism,” Leveritt said, and he detailed some of its effects at the nearly 50-year-old Times.
“We hired an award-winning reporter, Debra Hale-Shelton, who broke the story about University of Arkansas System President Donald Bobbitt’s plan to affiliate with Phoenix University, and just today [Aug. 31] had another scoop about how officials pursued the deal even after the board of trustees rejected it,” Leveritt said.
Mary Hennigan joined the staff from the University of Arkansas’ journalism master’s degree program to cover City Hall, and Hendrix College graduate and master’s holder Daniel Grear came on board as culture editor. Stephanie Smittle, who had the culture job before, became managing editor, freeing up Editor Austin Bailey to write more.
Walker said a $50,000 grant helped put Ramsey back on staff, and Leveritt expects his detailed and analytical coverage of education to be a Times cornerstone for years.
“This isn’t a one-day story; it isn’t a one month story,” Leveritt said. “Arkansas Learns is a three-year story, crucial for the state’s future.”
Times’ Niche? Liberalism
Walker said he gathers money from readers, grants, partners, small donors, large donors and “editorial events,” like a coming barbecue and bourbon tasting. “I think we’ll get to $200,000 by next April,” he said. “And unless something really changes, I think we should eventually be doing anywhere from $300,000, $400,000 or even $500,000 on an annual basis.” Leveritt said every penny in donations goes to its editorial hiring fund.
Every general-interest news publisher knows the old model is broken, Walker said. But niche publications focused on business, sports or specific topics command a premium from audiences and advertisers.
The Times’ niche seems to be its biting liberal viewpoint in a red state and its disgust with Republican culture war issues. A headline in June read “Know-nothing state Sen. Dan Sullivan wants to defund libraries that don’t bend to his will.” Sullivan is a Jonesboro Republican and foe of affirmative action.
“The point of view is really important,” Leveritt said. “Someone needs to critique what’s going on at the state Capitol. You’ve got a government that’s trying to erase Black history, that’s trying to ban books and interfere with the work of libraries and librarians. Here’s a government that’s banning abortion and rolling back LGBTQ rights. Someone has to say something, and if not us, who?”
The editorially conservative Arkansas Democrat-Gazette has made no appeals for philanthropy, so far. But Publisher Eliza Hussman Gaines and her father, Wehco Media Chairman Walter Hussman, wrote a letter to subscribers informing them of a price increase, and detailing the financial strain of keeping a large reporting and editing staff in a ravaged age of newspapering.
Gaines and Hussman called the Democrat-Gazette unique as a modern statewide paper, and noted that its 106-employee newsroom staff, not to mention 52 staffers at its sister Northwest Arkansas Democrat-Gazette, dwarf the news staffs of papers like the Arizona Republic and Austin American-Statesman. It noted that the newspaper has been family-owned for four generations, a rarity in a landscape where private equity groups own half of all U.S. papers.
The letter detailed the $943,000 cost of a new roof at its Little Rock headquarters, the $300,000 price of a new elevator and nearly $600,000 in investments in newsroom and advertising equipment.
To stay in business as advertising declines, papers must get more revenue from readers. Hussman pioneered an idea of publishing a replica newspaper and giving subscribers an iPad for reading it as long as they keep up their subscriptions. It has worked, the letter said, citing a study by the Medill School of Journalism that found the Democrat-Gazette’s rate of retention the best of any newspaper in the nation.
“But subscribers die, move out of state or stop subscribing for other valid reasons,” the letter said. Subscriptions are rising from $34 to $39 a month.
“Being candid with subscribers worked well when we introduced the iPad and moved away from [daily mass printing of the newspaper],” Gaines told Arkansas Business. “And we’ve had the same positive reaction to the rate increase letter. People appreciate our honesty, and really don’t want to lose their local newspaper.” She said the Democrat-Gazette was looking into what other for-profit newspapers have done in philanthropy. “If the community support is there, it’s typically worked out really well for them.”
The Times is now shooting for growth and sustainability. Deep-pocket donors and grants are essential, Walker said, but $50 donations and subscribers who pay $15 or $25 a month rather than the minimum $10 are making a difference. “We get checks that show up in the mail after Debra writes a story, for example, saying thank you for that story.”
He recalled one woman who broke into tears when he described the philanthropy program to her. “She was just glad to know somebody was doing something. Journalism will never go away, but it’s having to be reinvented. Arkansas Business is a healthy product, and it probably doesn’t need to do what we’re doing. But in our case, we’re swimming upstream in a lot of ways, and this lets us do the kind of journalism that we want to do.”