Newsroom acquisitions can serve different purposes. Be clear about mission and strategy from the outset.

A newsroom acquisition can fit a number of ways into a station or digital newsroom’s mission and strategy. A newsroom acquisition can provide greater sustainability for an independent newsroom; it can expand coverage for a public media station; it can increase the digital brand and boost the digital audience of both parties. Our research revealed a range of purposes and benefits. Yet the most important element to acquisition success was explicit mission and strategy alignment between the parties.

Here are some questions to ask if you are a station or a digital newsroom considering an acquisition:

• How would this acquisition help us fulfill our mission? What values does it help our organization express? What aspiration does it help us reach towards?
  
• How does this acquisition fit into our strategy? Who can we reach and serve differently with this acquisition and why is that important? How will this acquisition help us fulfill our sustainability goals? What does this acquisition allow us to do uniquely that other newsrooms and media institutions in our community cannot do?

A well-executed newsroom acquisition can be the catalyst for station transformation. 

Many public broadcasting stations over the past few decades have endeavored to build up their local journalism service through hiring more editors and reporters. But many stations have also struggled to build a culture of journalism that would deepen their reporting and local impact. Our work with a cohort of stations who have acquired digital newsrooms confirms that a well-executed digital newsroom acquisition can be the catalyst for the cultural transformation of a station into a civic news institution. But not all stations are ready for such a transformation, and not all digital newsrooms may want to be part of such a transformation. 

Here are some questions for stations and digital newsrooms to ask as they consider an acquisition:

• What is the station’s baseline commitment to local journalism, particularly in digital forms? Is the station ready for cultural change in the newsroom and for an expanded role in their communities? Who is in place to help lead that transformation and what are they ready to do?
  
• What is the independent digital newsroom’s appetite for engaging in a change process? Are leaders and staff ready to learn a new culture and create new ways of working in a larger, multi-platform organization?

Leadership and turnover are key ingredients in making acquisitions work over time.

Post-acquisition merger processes are messy for any type of organization. Culture clashes, workflow confusion, and identity trouble are common stumbling blocks to successful mergers. We found amongst the research cohort that leadership and turnover are key ingredients in making acquisitions work over time. Strong and visionary leadership is necessary for charting a shared vision and keeping staff focused on what matters. Turnover is necessary for allowing people who don’t resonate with the changes to leave and allowing new people who can help create a new culture to enter the organization.

Here are some questions for stations and digital newsrooms to ask as they consider an acquisition:

• Who are the formal and informal leaders in the station and the independent digital newsroom? What are their strengths around leading change and what are their weaknesses?
  
• Are leadership and staff prepared for turnover and hiring? What processes can be put in place to help staff and leaders who aren’t ready for change exit the organization and find a better fit? What new people and new roles could be a good fit for a merged newsroom?

Acquisitions are not panaceas: they do not substitute for purpose, strategy, and leadership.

In turbulent financial times for digital news and in the midst of increasing pressure to deliver high-quality local journalism, the marriage of public stations and digital newsrooms can boost the sustainability of both entities by growing the audience and the service. But while this model has many benefits in the abstract, it is not a panacea. Without explicit alignment on purpose, strategy, and leadership, an acquisition will face cultural and workflow obstacles that can drag down both entities. Purpose, strategy, and leadership are also not one-time activities. Both entities must be prepared for a continual revisiting of the goals, strategy, and shared vision of the acquisition as a necessary ingredient for long-term success. 

Here are some questions for stations and digital newsrooms to ask as they consider an acquisition:

• What is a realistic assessment of what problems and needs an acquisition can help solve, and what problems and needs have to be addressed in other ways? What level of agreement is there in those two categories?
  
• Are the parties to an acquisition ready to engage in a learning process together to refine strategy over time as the post-acquisition merger unfolds? What could that learning process look like?

Acquisitions require investment to deliver on editorial goals and investment to deliver on sustainability goals.

Acquisitions require more than the initial investment to legally combine two entities. Successful acquisitions require investment in the people and resources that can support a robust multi-platform newsroom. Successful acquisitions also require investment in the people and resources that can support multi-platform media business models. Without adequate additional investment in editorial, product, and business integration, an acquisition will under-deliver on its strategic promise.

Here are some questions for stations and digital newsrooms to ask as they consider an acquisition:

• What additional people and resources would be needed to deliver on the potential of a multi-platform newsroom? What strengths and weaknesses do both editorial teams bring to the table and what is needed to level up?
  
• What are the baseline levels of people and resources available to support digital sustainability in both entities? What kinds of skills, roles, and products are missing and what could be done to fill those gaps?

Acquisitions and integrations are stressful and chaotic. Successful integration requires time, resources, and patience.

Acquisitions are not for the faint of heart. They are often stressful and sometimes chaotic social processes that require time and patience. Not every issue can be predicted in advance, even with the benefit of outside expertise and resources. A willingness on the part of leadership to continually revisit and recalibrate how the integration is unfolding will help set the stage for long-term success. 

Here are some questions for stations and digital newsrooms to ask as they consider an acquisition:

• Are both parties to an acquisition ready to commit for the long-haul and mobilize the patience and persistence required to bring an expanded newsroom to its full potential? What would it take (in terms of data, resources, personnel) for each side to feel confident making such a long-term commitment?
  
• What periodic reflection and troubleshooting processes can leadership of both entities agree to in advance to ensure that the acquisition is nurtured for long-term success? What milestones could both parties agree to?

This chapter outlines the major benefits and important considerations to make in the earliest stages of considering a public media acquisition. These questions should help inform independent digital newsroom leaders and public media leaders who are discerning whether an acquisition is right for them.

A public media newsroom acquisition can be a powerful strategic tool to support quality local news and information in a community. But when does such a strategy make sense? What transaction structures are possible for making it happen, and what questions should guide the diligence process?

This chapter also provides recommendations and tools for managing the diligence and transaction process itself. We are grateful to our industry partners in this project, Public Media Company, for drawing on their expertise in public media acquisitions to create a handful of powerful tools for executives to use in pursuing a newsroom acquisition process. We outline those tools in this chapter, and link to downloadable versions in the Tools section of this Playbook. 

When does it make sense to pursue digital newsroom acquisition into public media? There is no single answer to this question. There are a variety of conditions and strategies that are a good fit for a newsroom acquisition into public media. And a single acquisition can serve a variety of purposes.

This section lays out some of the rationales for acquisition that we surfaced in the mergers study. These rationales provide a good basis for assessing, at a high level, whether pursuing an acquisition is a worthy goal. We first consider what a public media acquisition can do for an independent digital newsroom. We then turn to what an acquisition can do for a public media station.

What can a station do for a digital newsroom?

Provide financial and operational stability and heft

Many small, independent digital newsrooms operate on thin yearly budgets without much operating reserve. Many find it difficult to break out of “start-up” mode and reach a scale where recurrent revenue consistently meets or exceeds expenses.

For an independent digital newsroom, a new station home can provide operational stability and heft that is very difficult to achieve in a purely digital business model. (According to the Station Resource Group, in FY 2019, 62 stations reported a total direct revenue of $5 million or more.) Many public radio and television stations also have strong membership bases and are tapped into local philanthropic networks in addition to bringing in revenue from underwriting and sponsorship. While in many small digital newsrooms, executives have dual editorial and business responsibilities, most public media stations have professional revenue-side staff. 

Provide a longer-term horizon for sustainability 

The operational stability and heft of a public media station can provide digital news leaders with a longer-term horizon for sustainability and mission than they could otherwise create on their own. This ability plan for the long-term is a huge asset for building long-term community relationships and delivering on the promise of public service. 

Provide editorial guidance and leadership

Though many public media stations are early in the journey of developing a culture of journalism, many have also been hiring editorial leadership from newspapers to run their broadcast operations. Just by virtue of their size, public media newsrooms often have larger editorial teams than small independent digital newsrooms. This means that many stations already have a level of editorial professionalism and expertise that can benefit small digital newsrooms that might have been unable to scale editorial support as fast as reporting strength.

Provide opportunities for cross-platform collaboration

Impactful journalism often crosses platforms, reaching different audiences in different channels. While many small digital newsrooms are experimenting with public media newsroom collaborations to help their stories travel widely, an acquisition can bake cross-platform collaboration into the newsroom’s operating model. Internal collaboration, though still difficult,  is much less costly and has the opportunity to be more efficient when everyone is under a single reporting structure.

Provide access to major donors who want to support the work

The strongest public media stations have built deep relationships with the philanthropists in their communities, and have professional development staff who support ongoing major giving work. Many independent digital newsrooms are working hard to develop this capability, but their leaders often have to juggle editorial oversight with donor relationship-building. When an acquisition works well, public media development staff take pride in the work of the new digital newsroom and take responsibility for connecting with major donors who want to support the digital newsroom’s work. 

Provide investments in product and revenue

Staying atop trends in digital product and revenue can be incredibly challenging for a small digital newsroom with limited staff and bandwidth. Though there are now quite a few tools and services which support publishing and revenue in small newsrooms, public stations can provide investments in more sophisticated product and revenue strategies that would be difficult for small newsrooms to secure on their own. 

Provide access to other platforms

Though public media stations retain a core focus on broadcast media (television and/or radio), most stations have diversified into other media platforms including digital video, podcasting, digital streaming, digital text, and social media. A public media acquisition can provide a small digital newsroom with access to other media platforms that would have been either difficult or ad-hoc to do as an independent. 

Preserve an archive!

For a struggling digital newsroom, a vitally important service that a public media acquisition can provide is to preserve its archive. Many independent digital newsrooms have stepped in where local newspaper coverage has shrunk or disappeared, and have become the “site of record” for important stories in their communities. When digital news sites shut down operations, their stories run the risk of being extremely difficult to access or lost altogether.

What can a digital newsroom do for a public media station?

Provide a differentiated digital brand

Public media stations have been trying to build digital brands since going online in the late 1990s and early aughts. Evidence from public radio suggests that despite many stations’ efforts at digital brand building, their websites are used for (1) checking the broadcast schedule, (2) accessing the broadcast stream, (3) donating. Listeners and viewers have not made the transition to being readers, despite many stations investing considerable resources in building digital products and hiring digital producers and reporters. 

The opportunity to acquire a differentiated digital brand should be hugely important to public media stations that are seeking to inform their communities with digital news. Building a digital media brand at any scale is incredibly difficult. And the advantage that small independent digital newsrooms have had is the ability to create a digital brand from scratch, not attached to broadcast call letters.

Provide an editorial voice with local resonance

Part of the difficulty of building a digital brand lies in crafting a distinctive editorial voice that can cut through the clutter of internet media and attract a loyal audience. Most successful local independent newsrooms have been able to build a brand and an audience through finding and honing that local voice. 

Much like strong public media stations—particularly radio stations—have learned to spot and develop broadcast talent, a solid local newsroom acquisition will provide the station with a star-quality of digital editorial voice and sensibility that is hard to replicate. 

Provide a digital audience (web, social, newsletter)

The combination of a strong digital brand and a strong editorial voice in an independent digital newsroom should result in a strong and growing digital audience. The size of the digital audience, the distribution of audience across platforms, and the loyalty of that digital audience are some of the most valuable assets to be gained in a digital newsroom acquisition. 

Provide digital reporting capabilities 

Public media stations seeking to build their digital service have attracted and grown a large cadre of digital producers across the system. Digital producers are skilled at taking broadcast content and adapting it to the web. But digital producers are not, by and large, digital reporters. At a basic level, what a digital newsroom acquisition can do for a public media station is bring in a team of digital reporters whose only medium is the internet, and whose only task is reporting stories that get published on the internet. For stations that are seeking to boost the quality, amount, and depth of their original reporting on the web, a newsroom acquisition is a much stronger strategy than continuing to build from scratch.

Provide a new product mindset

A digital newsroom acquisition can also help a public media station grow its “product mindset.” A product mindset refers to the practices of audience research, design, testing, launch, and assessment that characterizes the best of digital media creation. A product mindset is especially important for stations that are trying to grow their digital audience and increase the quality of their digital services. But a product mindset often runs counter to a broadcast mindset, in which stories get produced, aired to a mass audience, and forgotten. In strong digital newsrooms, a product mindset often goes hand-in-hand with editorial strategizing. It is this combination of skills and thinking that can be a huge boost to public media newsrooms and public media digital teams. 

Provide an audience orientation 

Related to the product mindset, a digital newsroom acquisition can also provide a new kind of audience orientation that many public media organizations have struggled to develop. Because digital audience building is about knowing your audience and then community building around them, any successful digital newsroom will have figured out how to understand its audience and respond to their needs.

Provide a different audience than NPR listeners

Finally, a digital newsroom acquisition can provide a different audience to a public media station. Most public media station audiences (and members) tend to be older, educated, affluent, and white. A targeted digital newsroom acquisition can help a station diversify its audience not just by channel but by demographics as well.

When considering an acquisition, there are a number of transaction structure options to consider. We asked the professionals at Public Media Company, who have helped structure and execute many acquisitions into public media, to outline the major transaction types and required documentation. Please note: The stations studied as a part of the Public Media Mergers Project were all either mergers or acquisitions. Due to confidentiality reasons, the research team is not able to disclose the specific deal structures and terms of the mergers and acquisitions examined as a part of this study. If you have any questions about this, please reach out to Dr. Elizabeth Hansen at elizabeth@elizabethahansen.com. 

Public Media Company captured the range of options for combining two newsrooms and the legal documents involved in their Structuring a Newsroom Merger document, which you can find in the Tools section. Structures can range from a less formal task-focused partnership, which means the two newsrooms collaborating on specific joint stories or projects through shared resources, to an acquisition, where one organization agrees to acquire the assets of another organization. 

Of course, legal counsel should be retained when completing binding agreements in connection with a newsroom merger or acquisition. 

The following advice was developed by Public Media Company. 

Task-Focused Partnership

In a task-focused partnership between two non-profits, the newsrooms collaborate on specific joint stories, with each newsroom providing resources. Via a Memorandum of Understanding (MOU), or other formal agreement such as a Term Sheet, the allocation of revenues and expenses, responsibilities for research, promotion/social media engagement, and other relevant roles/tasks are outlined and agreed to by the participants. If the partnership is between a for-profit and nonprofit entity, then the activities and the allocation of revenues and expenses should be clearly defined to show that such activities either help advance the mission of the non-profit or are unrelated to the nonprofit’s mission and, therefore, subject to unrelated business income tax, or “UBIT”. UBIT applies to income derived from a regularly carried on trade or businesses that is unrelated to the performance of the organization’s tax-exempt (e.g., charitable) functions.

Joint Venture

In a joint venture, two non-profits agree to undertake an economic activity together. This can be completed by entering into a Joint Venture Agreement that clarifies roles, financial, legal, and other responsibilities or by creating a separate legal entity. An example of this type of structure was Classical Public Radio Network (CPRN), a joint service provided by KUSC (licensed to University of Southern California) and Colorado Public Radio (CPR). CPR and KUSC set up a non-profit, limited-liability corporation (LLC) to streamline their classical music operations and to enable multiple distribution opportunities in broadcast, cable, satellite, and digital. CPR and KUSC both had a 50% interest in the corporation. An MOU can be created to outline the intended joint venture, and if a legal entity such as an LLC is formed, an operating agreement for the LLC will need to be created. In addition, the LLC will need to be established on the state and federal level (1023 filing for a new 501c3). 

Although the agreements for nonprofit-for-profit joint ventures and mergers are similar, such transactions can be complicated as they may have tax implications and create a risk to the nonprofit’s tax-exempt status. Advertising revenues and sales of products and services might be considered unrelated business income by the IRS. Such mergers and joint ventures are typically structured through subsidiaries to shield the non-profit. 

Merger

In a merger, two organizations agree to combine their operations. Depending upon the agreed structure, it could be that an entirely new organization is established to which both organizations will contribute their existing assets. Or it could be decided that one organization merges into the other organization. From a governance perspective, a merger generally provides for the combining of the existing boards, and a consensus and agreement regarding how the merged organization will operate in the future. Legal agreements in connection with a merger often involve the transfer of assets from one organization to another without compensation under a Merger Agreement. While mergers between nonprofit and for-profit entities are structured similarly, there may be unique state law requirements and IRS requirements imposed on non-profits because of their tax-exempt status. 

Acquisition

In non-profit acquisitions, one organization agrees to acquire the assets of another organization (as opposed to the stock of a corporation). The acquisition terms may include fixed assets, intellectual property, assumption of obligations (leases, debt, etc.), commitments regarding personnel, board positions, etc. Generally, via an independent appraisal/valuation, a purchase price is established, and the acquiring entity agrees to pay a sum of money to the organization selling its assets. Legal agreements in connection with an acquisition include the Purchase Agreement. The seller would generally dissolve its company or agree to a non-compete agreement for a period of time.

An acquisition might also involve a non-profit acquiring the assets of a for-profit or vice versa. The agreements used in these transactions are similar to those in non-profit to non-profit acquisitions and include a description of the assets being transferred, the liabilities being assumed, and appropriate representations and warranties regarding such assets and liabilities and the parties. In the case of a sale from a for-profit to a non-profit, the seller has options regarding the purchase price, receiving it in the form of cash, a note receivable, or considering the transfer of the assets as a donation, possibly resulting in a tax deduction.

Formal Agreements

When structuring a newsroom merger there are a number of formal agreements that may be part of the process. For more formal structures, counsel will have to draft a Letter of Intent (LOI) that expresses that the two parties are committed to negotiating in good faith, a Memorandum of Understanding (MOU) that documents the terms the parties are agreeing to, and then for mergers, the Merger Agreement that documents the terms of the merger, and for acquisitions, the Purchase Agreement that documents the terms of the acquisition. 

See the Structuring a Newsroom Merger document on the Tools page for more on the information you’ll need to include in these formal agreements.

How long can you expect an acquisition transaction process to take? The timeline and activities will vary depending on the overall vision, size of the newsrooms, type of the organizations, legal structure, and the newsroom reach. Public Media Company, based on its work advising and structuring newsroom acquisitions in public media, suggests that a process can take anywhere from nine months to a year or more.

Be prepared for an acquisition process to take some time. While some of the acquisitions in the cohort came together very quickly (a few months) out of necessity, others took a few years to come together. Long acquisition processes can be positive, however. John Mooney, a founder of NJ Spotlight, engaged in an acquisition process with NJTV and WNET which took more than two years from start to finish. Mooney reflected: 

“I think you should temper your expectations to do this quickly. If you think it is going to take a year, it could take two years. In our case, from start to closing was more than two years. There was a lot to work out. The details themselves are enormous in dealing with any organizational merger, especially a media one. But one of the benefits of a long courtship is that it is a long courtship. In our case with NJTV, we got to know each other, and we did some work together during that time, and that was all really valuable for the acquisition to work.”

While we strongly recommend investing time up front in diligence and planning, there are inevitably issues which will not become apparent until the transaction is complete and the merger process is underway. This is especially true when it comes to managing reporting structures and mixing personalities and cultures. Mooney explained, 

“But you can do all the planning up front, and until you are actually in it, that is where the rubber meets the road. We thought we were all prepped and ready to go, but on day one you are starting to deal with cultures and all the issues with that. For all the prep work, we still had to deal with those issues.”

Talking about the fact that workflow and cultural conflicts will arise will help normalize conflict as part of the change process. It’s also important to agree ahead of time as best you can on how conflicts can be handled and resolved. These conversations will help prepare everyone for what is to come. Mooney explained,

”Knowing that culture and workflow issues are going to arise is the useful part. You have to start talking about those things early and start sitting at the table together, acknowledging you will have different ways of working and workflow. You should start talking about how you will resolve those issues when you will have two different points of view. Until you are in it, you won’t realize them all, but recognizing in advance what the big issues are will really help. Be ready and have a detailed plan, even if you might end up tossing it.”

The following advice was developed by Public Media Company. Please see the Tools page for a downloadable version of the full document “Timeline for Newsroom Mergers.” 

Sample Newsroom Merger Timeline

Step 1: Build trust and the ability to work collaboratively 

Focus areas: Editorial collaboration, co-fundraising, high-level conversations on the benefits of strategic alignment, cultural fit

Suggested activities (3 – 6 months or longer):

• Spend time together at the senior staff level and board level
• Share resources (e.g., offices, reporters, equipment)
• Collaborate on editorial initiatives
• Identify if strategic alignment makes sense, and why
• Participate in co-fundraising, if possible  

Step 2: Create a vision for how organizations could merge

Focus areas:  Editorial mission/vision, potential leadership structure, branding approach

Suggested activities (1 – 3 months):

• Conduct a SWOT exercise to determine alignment on strengths, weaknesses, opportunities, and threats to ensure a shared understanding of the landscape 

• Agree on the shared mission/vision for the combined organization
• Create an editorial plan for how the two newsrooms will work together. This editorial plan will help inform potential funders and be a guide through the business planning process
• Agree on the basic branding approach.Do the two brands continue to exist or does one brand go away over time?
• Confirm the leadership structure for the combined organization, and make sure that all agree with who is going to lead the enterprise post-merger. These discussions should also include any structural changes to any oversight boards, if relevant. This leader will have the final sign off on the business model for the combined organization

• Identify funders that may support the merger and confidentially discuss the shared editorial vision; inviting feedback, questions, and gauging potential for philanthropic support 
• Involve Board, as needed, to gain early buy-in to the merger

Step 3: Conduct rigorous business planning and diligence

Focus areas: Business model development, due diligence

Suggested activities (1 – 3 months):

• Collect information and data (refer to the “Due Diligence Checklist for Newsroom Mergers” for a complete list of the due diligence items).
• Create a detailed business model for the two organizations operating as a merged organization. Provide documentation for all revenues/expenses, reserves, restricted versus unrestricted revenues, preferably audited by an independent accounting firm
• Prepare a staff plan for the new organization, which includes both existing salaries and benefits and any additional positions to be hired in the merger. Identify if any positions will be eliminated in the merger
• Identify additional sources of revenue to support the merged organization and overall plan for sustainability for a five-year timeframe and beyond
• Determine where the staff offices will be located, and clarify expectations for co-working in the shared office space
• Discuss and agree about any services that will be ended (e.g., newsletters, podcasts, print publications) or locations that will be closed due to the merger

Step 4: Agree on merger terms and prepare agreements

Focus areas: Creating formal agreements, integration planning 

Suggested activities (approx. 3 months):

• If necessary, create and sign a Letter of Intent (LOI) documenting that the two organizations are committed to confidential, exclusive discussions with the goal of merging the two organizations
• Prepare formal merger documents 
• Engage in more extensive due diligence, such as documenting staff salaries and benefits, reviewing all contracts, documenting insurance coverage and inspecting all lease agreements (refer to the “Due Diligence Checklist for Newsroom Mergers” for a complete list of the due diligence items)
• Review all grant agreements and identify any grants in progress that require pre-approval from the foundation before transferring a grant to a new/merged organization. Make sure all grant approvals are sought and received in writing before signing merger agreements
• While merger documents are being finalized, prepare plans for integration (refer to the “Implementation Checklist for Newsroom Mergers”) and communication of the merger.  Keep key foundations and donors informed of the status and projected merger signing and announcement dates.

Step 5: Seek board approval and closing

Focus areas: Finalize merger documents, receive board approval, integration planning 

Suggested activities (approx. 1 month):

• Finalize merger documents
• Board discussion and approval
• Closing 

Public broadcasters and independent newsrooms will need a wide array of documents and materials from the other side in order to make an informed decision about a merger. 

Public Media Company created a Due Diligence Checklist for this process (see the Tools page for the downloadable document).

Newsroom leadership and/or legal counsel will need to request financial documents and data (including financial statements for the past two to three years and details on all ownership and assets) and clear reporting on editorial and content history and processes (including publishing schedules, current distribution partners, and editorial responsibilities). 

Other and perhaps more frequently overlooked information like information on software used for email, accounting and publishing, and communications and workflow for social media posts, should also be requested. 

It should be noted that not all of these due diligence items will be relevant to every merger. The scope and the extent of the due diligence materials might vary depending on the overall vision, size of the newsrooms, type of the organizations, legal structure, and the reach of the newsrooms.

Financial

• Historical, audited, or internally prepared financial statements for the past two to three years with detailed revenue and expense information including indirect costs
• 990s for the past two to three years
• Year-to-Date actual results and Year-to-Date budget for the current fiscal year 
• Budget for the next fiscal year 
• Strategic plan/operating plan and any overview documents that explain mission/vision and goals
• Distribution and production stats (weekly/monthly/annual production hours, number of stories produced, broadcast/online/podcast audience reach, focus of stories/content etc.)
• What are the key performance indicators (KPIs) that you track to quantify the economic and social impact (number of listeners, number of users, hours of content produced, etc.)? Any historical data you have on these variables/ratios since the inception, to the extent available.
• Records of all utility costs, taxes, assessments, and other costs associated with the operation for the past three years
• Detailed description of all payments made to content providers over the past 24 months.
• List of all sponsorship/advertising contracts sold during the past 24 months, including the contact information of the underwriter, the value of the contract, and the name of the employee responsible for the respective underwriting accounts.          
• List of all key contracts (leases, vendors, grants, etc.)

Content

• Describe editorial roles, responsibilities, and workflow
• A list of content and distribution partners
• Editorial policies
• Publishing schedule

Development

• Membership giving levels, pledge drive dates, direct mail solicitations schedule
• Provide the following membership information for the past two fiscal years:
  • Number of donors <$1,000
  • Prior year donors retained in current year (<$1,000)
  • Number of donors >= $1,000
  • Prior year donors retained in current year (>=$1,000)
  • Number of donors acquired via pledge drive, online, other
  • Number of sustainers
  • Total 12-month sustainer revenue for all sustainers giving in first month of prior year
  • Total prior year sustainer revenue for all sustainers giving in first month of prior year
• Provide a list and a brief description of the crowd-funded projects with the number of donors, donations, total revenue raised, and the campaign period
• Provide a list of events organized over the past two years with the following information for each:
  • Number of attendees
  • Gross revenue
  • Sponsorship, advertising, and/or fundraising revenue 
  • Historical sources of grants: provide a list of foundations, with the respective grant amounts. Indicate whether each grant is restricted or unrestricted, single-year/ multi-year

Governance

• Bylaws
• Minutes from the board or advisory group meeting
• Lists/bios of board members with terms

Human resources/administration

• Organizational charts
• Job descriptions for the core staff
• A list of all salaried employees and contract personnel with detailed information on salaries, hourly rates, and, if applicable, benefits
• Employee handbook
• Employee evaluation/review process
• HR training policies and programs (if any)

Ownership and condition of assets

• A list of the assets the merging entities use or hold for use in connection with their operations, whether real property or personal property, owned or leased, together with copies of all available reports and other valuation data, including physical conditions and depreciation, concerning such assets. The list should include the manufacturer, model number, and date of purchase or installation of any electronic equipment used or held for use by the entities.
• If applicable, all deeds and other real property title documents, including leases and assignment of leases of real property, to which each merging entity is a party, and which will be sold or assigned to the merged entity.
• A list and brief description of all liens, security interests, mortgages, and any encumbrances with respect to each of the Assets (including equipment), and the location where documents or financing statements relating thereto are filed.
• A list of all insurance policies, copies of all material insurance policies in force, and a list of any claims made under those policies or any predecessor policies, noting any cancellation or assignment issues.

Marketing and communications

• Recent marketing and communications plans

Technology

• Information/description of digital and CRM platforms and related contracts
• Donor analytics
• Underwriting/sponsorship software
• Website hosting information
• Information on other software systems used for email, accounting, publishing content, etc.
• List and review agreements with outside vendors supporting IT operations

Social media

• Communications and content workflow for social media posts
• Plans and budget for digital ad process

Once you have the key financial, audience, and other information from the other party, the next step in the diligence process should be business modeling — or the process of calculating all expected costs and revenue in order to determine how the newly merged entity can become sustainable— and when. 

Public Media Company created a spreadsheet calculator to aid in this process. See the Business Model Calculator on the Tools page. The calculator is based on over 200 business models that Public Media Company has created over the past two decades. 

Once you download this calculator, keep this in mind: we recommend completing the Tab 3 – Cash Flow Detail sheet first, looking at historical data to make some informed assumptions about how the business might grow. Then, the Cash Flow Summary sheet will act as a clean snapshot that can be reviewed with stakeholders and other newsroom leadership. 

Of course, it should be noted that the scope and the extent of the financial model might vary depending on the overall vision, size of the newsrooms, type of the organizations (commercial versus noncommercial, broadcast versus online), and the intended audience reach.

Making revenue assumptions

The most important components needed to project the sustainability performance of an acquisition over time are assumptions about the variables that will drive revenue. This business model calculator outlines a series of these assumptions.

We recommend making these assumptions based on historical analysis of performance, and planned investments in content, product, and monetization as part of the acquisition. These assumptions should help inform your revenue projections and help you monitor your performance over time. Most of the acquisitions in the research cohort were modeled on a three to five year break-even basis, subject to differences in the baseline financial health, audience size, and investments required for purchase and upgrades.

Making cost and investment assumptions

Of course projecting financial performance is not just about paying attention to revenues. You also need to plan for the ongoing costs of running the acquired property. You should plan for making investments in product, audience growth, and revenue capabilities as part of the business modeling. You may also want to add new staff as part of those investments.

See the Business Model Calculator for our recommended cost assumptions. If you have any questions about the template, please contact Evran Kavlak at evran@publicmedia.co.

Successful newsroom acquisitions require an up-front investment of time to align the key stakeholders on issues of mission, vision, and strategy. We saw across the research cohort that post-acquisition integration processes were rockiest when important questions around mission, vision, and strategy were left unanswered or unclear as teams began their work together. 

This chapter lays out recommendations for how to set up an acquisition for success by focusing on the key decisions related to vision, mission, strategy, and structure.

Undertaking the reflection and planning we outline in this section will take time and patience. But the payoff in the post-transaction merger process will be well worth the effort. 

Rachel Sadon, formerly the Editor in Chief of DCist, and now the News Director at WAMU, strongly recommends both sides to an acquisition take the time to lay out the mission, strategy, and operational choices that will be entailed post-transaction. This includes making explicit agreements about when choices will be re-evaluated and possible changes made. She explained,

“I strongly recommend really setting the time aside to make choices, and then re-evaluating those choices at set points after the launch. It’s so important to have a clear idea about what you are going to do. It’s also critical to be clear when you are making a change.”

Digital founders or key employees with a strong sense of culture and mission can, in the absence of explicit agreements, navigate the post-transaction culture and operational challenges of integration. But we observed in the study that the figure-it-out-as-you-go strategy can take a huge toll on leadership and staff on both sides, and prolong the transition period to a coherent and shared strategy and operations. Sadon explained, 

“Some of what leadership did in our acquisition was thrown together at the beginning with an agreement to see how it goes. Because I had so much background knowledge about DCist and experience in the previous newsroom, I could put the energy into working things out as we went along. If that hadn’t been the case, I don’t know how it would have gone… The problem is, if it’s not urgent, it can be easy to let big strategic questions slide.”

Who should be involved?

Arriving at a shared vision and mission requires first understanding the key stakeholders you need to include in the process. There are five key sets of stakeholders to consider:

1. Digital newsroom founder/leaders. The founder(s) and/or current leadership team of the digital newsroom being acquired should be part of mission and vision alignment discussions.
2. Digital newsroom board members. Board members of the digital newsroom being acquired (if any) should be a part of mission and vision alignment discussions.
3. Station leadership. The station manager/CEO and any top managers involved in content and business strategy should be part of mission and vision alignment discussions. 
4. Station board members. Station board members should absolutely be involved in mission and vision alignment discussions. For university licensees, this should include at least one representative of the university governance body, and the most relevant one or two members of any strategic advisory bodies. 
5. Major funders. To the extent there are major donors or foundations supporting the newsroom acquisition, those stakeholders should also be part of the vision and mission discussion.

Some acquisitions will be opportunistic—meaning a time-sensitive opportunity arises and the station and digital news outlet must be ready to jump into negotiations immediately. Other acquisitions may be part of a strategic search process. The time pressure involved will help shape the sequence of stakeholder mission and vision discussions. But time pressure should not short circuit these mission and vision discussions. Even late discussions are better than none.

Creating a vision

A shared vision should articulate the ideal future state the parties imagine will be created by a successful and thriving combined entity. A vision addresses the “hopes and dreams” of the new entity and its members. To begin to create a vision, reflect on the questions:

1. If we were successful in bringing together these two entities, what kinds of outcomes would we envision for ourselves and the communities we aspire to serve?
2. If we were successful in bringing together these two entities, what kinds of problems would we be solving?
3. If we were successful in bringing together these two entities, what kinds of change would we be seeking to make?

A vision should use language that paints a picture of the future states of being, doing, and having that would characterize the new organization and the communities served. Vision can pull on qualities such as an informed public, engaged communities, democratic participation, or civic dialogue. An example might be: a metro region in which the diversity of our communities and experiences are understood and celebrated, in which citizens have the information they need to participate thoughtfully in democratic self-governance, and in which a variety of public and private stakeholders regularly come together to work for the progress of our region.

Creating a mission

A mission is present-focused and describes the actions and orientations of the new entity itself. A mission should be in the form of a “we” statement. It articulates the actions and values of the members of the organization and it identifies the groups that are served. To begin to create a mission, reflect on the following questions:

1. If we were successful in bringing together these two entities, what would we do? 
2. If we were successful in bringing together these two entities, who would we seek to serve?
3. If we were successful in bringing together these two entities, how would we serve them?

A mission statement brings you one step closer to strategy in that it should articulate a distinctive notion of what you do, who you serve, and how. A mission states how you will bring your vision into reality. 

There are plenty of generic mission statements that sound as if they could apply to any news organization. Truly inspiring and mobilizing mission statements (which you will need in order to mobilize multiple groups of people to come together) should address the distinctive way in which you desire the new entity to go about doing its work and bringing its vision to fruition. 

If your goal with an acquisition is to create a multi-platform newsroom that creates high-quality journalism, a mission which addresses what that newsroom does, whom it serves, and how it serves would be the building blocks of your mission.

The “how” portion of your mission should touch on the values that you want to guide your work. Relevance, human interest, civil discourse, timeliness are all examples of values that you could incorporate into a news-focused mission statement. An example might be the following statement, which guides St. Louis Public Radio’s newsroom: “Our coverage focuses on human interest, holds the powerful to account, and demonstrates our station as an authentic voice in the region.”

The importance of iterating and revising with stakeholders

Because an acquisition will likely have many interested stakeholders, creating statements of vision and mission should be a collaborative enterprise. Consider asking each set of stakeholders to draft their own statements of vision and mission for the acquisition, and then bring everyone together to discuss the similarities and differences, and close in on a single draft. 

The vision and mission for an acquisition should set the context for all of the subsequent discussions on strategy: editorial strategy, product and technology strategy, sustainability strategy. These two sets of ideas should form the “North Star” for any subsequent confusion or disagreements about what matters.

As part of crafting the mission and vision that will guide the acquisition, the leadership of both entities should come to an agreement about the editorial mission that will support the combined newsrooms. Editorial mission and editorial goals are some of the most important dimensions to seek alignment around during an acquisition process. This section will address the types of editorial missions you might consider in an acquisition process.

Types of public service editorial missions

You might think that there are only a handful of high-level editorial strategies that can work in a multi-platform public media newsroom. One striking finding of the study was the diversity of editorial strategies that acquisitions helped support. Public service local digital news is a relatively new phenomena in public broadcasting. And there seem to be many different types of public service models in local journalism that an acquisition can support. 

We outline three major types of public service editorial strategies here. As you reflect on the elements of mission and vision from the exercise above, use these models to help you bring together your newsrooms into a coherent public service local journalism approach.

General purpose daily coverage

The general purpose public service editorial mission covers a mix of topics (most inside beats or topic verticals) of general interest to readers: health, education, transportation, etc. The coverage is both informational and enterprise. For stations whose communities are losing or have lost a local paper, acquiring a local news site with a brand and newsroom can beef up general-purpose coverage in their community. A general purpose daily coverage mission can also include covering regional or statewide issues.

Good examples of this kind of mission are the Denverite/Colorado Public Radio and Billy Penn/WHYY. Both these newsrooms have strong editorial leadership who are seeking to serve their communities with daily coverage that turns over quickly and reflects the most important developments in their metro areas. 

Strong place-based vertical content with editorial voice 

This public service editorial mission emphasizes the uniqueness of a place and the collective identity of a community. Some of the coverage can focus on food, arts, or culture and provide a “guide to your city” service. Other coverage in this editorial mission can capture the pulse of a place—the quirks, personalities, and beloved locations that make a community unique. For stations that acquire digital newsrooms with strong editorial voices and local resonance, the coverage is often rooted in place-based reporting and commentary.

Good examples of this mission are the LAist/KPCC and the Gothamist/WNYC. The Gothamist family of sites developed with a strong sense of place and a distinctive editorial voice. Much of the early coverage of the Gothamist family sites was focused on arts, culture, and entertainment. While their new public media homes have encouraged an evolution of this core distinctive quality to include much more news, the distinctive strengths (and brand recognition) around place-based, “voice-y” and “guide to your city” coverage remains.

These newsrooms are also good examples of how public media can move a vertical content brand towards more general daily reporting. All of the Gothamist sites had strong vertical culture and entertainment content. Their new public media homes have given those brands the opportunity to branch out into daily coverage.

Public-interest policy and statehouse issue reporting

This editorial mission seeks to fill gaps in policy and statehouse reporting often left by shrinking local legacy newspapers. This kind of coverage provides a vital public service in many communities that have been left without strong statehouse coverage. This type of coverage is generally on a slower cycle than breaking news or daily reporting and requires deep and trusting relationships between reporters and their local government sources. 

A good example of this public service editorial mission is NJ Spotlight/NJTV. NJ Spotlight was founded by former Newark Star-Ledger statehouse reporters who were remarkably fluent in covering state politics and policy. When WNET (NJTV’s parent company) acquired NJ Spotlight, NJTV was the rare public television state to have its own nightly public affairs program. The combination of NJTV and NJ Spotlight – now renamed NJ Spotlight News – strengthened the policy and public affairs reporting of NJTV and gave NJ Spotlight another platform on which to showcase its work.

Strategy is a further articulation of how you will carry out your mission and achieve your desired ends. Strategy should encapsulate the distinctive nature of what you are seeking to create or provide. It should also help you be clear about what you will not do. With a clear articulation of strategy, you can set measurable goals and objectives that can help you to assess progress along the way.

An editorial strategy should:

1. Articulate the differentiated strengths of the newsroom, and how it stands out from other newsroom approaches.
2. Articulate which specific audience types and audience needs the newsroom seeks to serve.
3. Articulate how the newsroom will go about serving those needs – this can include the use of specific brands, channels, engagement models, and formats.

Following the recommended steps below should help you articulate an editorial strategy that follows closely with your editorial mission.

Take stock of each newsroom’s differentiating strengths.

Understanding the strengths of the newsrooms you are bringing together (or, if you don’t have a newsroom, the strengths of the newsroom you are acquiring) is a vital first step to crafting an editorial strategy and making any changes needed as part of an acquisition. 

We recommend you begin with an exercise like “first, best, only” to understand the baseline strengths of the newsrooms involved in the acquisition. This exercise asks you to consider, for each newsroom on its own, the answers to the following questions:

1. We are the first newsrooms to….
2. We are the best newsroom to…
3. We are the only newsroom to…

It’s a good idea to do this exercise with the editorial leadership in both newsrooms, as well as any other major stakeholders involved in the acquisition who know either newsroom well. Comparing the “first, best, only” statements of each newsroom will help you see how the differentiating strengths of both newsrooms might be put together in a cohesive overall mission, vision, and strategy.

Take stock of your ecosystem. 

In many communities, shrinking local newspapers are leaving major gaps in coverage — particularly around local government and statehouse issues. An acquisition is the right moment to take stock of where the coverage stands in your ecosystem. Which outlets are covering what types of stories? What is missing? What developments in your metro, region, or state aren’t being covered well? Strong editorial leaders and reporters should have a sense of how the important issues are (and aren’t) being covered – but it’s also worth being rigorous in your audit.

Take stock of what your audience thinks is important. 

The third leg of the stool needed to craft an editorial strategy is understanding the audiences of each newsroom. What kinds of stories drive audience attention, and what does that suggest about the personas that might be attracted to particular types of coverage? What kinds of stories do the most loyal audience members gravitate towards? You can use newsroom analytics (particularly email newsletter analytics) to help you answer these questions. You could also run an audience survey on both news sites to understand what your audience would like to see more of. 

Audience research can be particularly helpful during the transition of an independent digital newsroom into a new public media home. The transition can provide an opportunity to re-assess the needs of the audience and what is working and not working from a content (and, if applicable, membership) perspective. For example, as WAMU was working to re-launch DCist, they conducted audience research with DCist’s former audience to understand what stories the audience wanted to see more of, and what new areas DCist might be able to cover. Rachel Sadon, now the News Director at WAMU, explained that this audience research was very helpful in crafting a new editorial strategy for DCist as it re-launched in its new public media home.

Take stock of the brand strengths of each newsroom. 

Newsroom brand is a slippery concept that is related to newsroom strengths and audience needs, but also separate. A newsroom’s brand should stand for a core set of values, set an expectation of value, and (if managed well) deliver a consistent user experience. A newsroom brand is expressed visually in the graphic design of a site and editorially in its choice of story type, format, and tone or voice. A public media brand and a digital native brand likely “do” very different things: they stand for different sets of values, they set different expectations of value, and they deliver different user experiences. 

Many of the digital brands in the cohort were designed to attract a younger news audience than the typical public media audience. For example, Sandra Clark, VP for News and Civic Dialogue at WHYY, shared,

“Billy Penn knows how to bring you the news without asking you to do much work, in a newsy entertainment kind of way. Their target age range is much younger than your average WHYY audience member.”

But the brand and voice that a digital newsroom brings to public media can shift over time. For example, Billy Penn came to WHYY with a distinctive brand, but it is growing and evolving too, especially around diversifying its audience. Sandra Clark, VP for News and Civic Dialogue at WHYY, shared,

“At the beginning there was some concern about Billy Penn getting absorbed into the WHYY brand. Now I think there is less a concern that Billy Penn’s personality and tone will fade away. Really Billy Penn has an opportunity now to go beyond being the “cool kid.” I think their audience are more sophisticated news consumers who want to engage. I think we can take that brand and elevate it – and not make it inaccessible. They have a bit of a cool kid factor that leaves a lot of people out. If they can do more engagement, that will help… Danya hired a reporter of color for Billy Penn and that has made a world of difference and has helped their brand in many ways.”

Brand can matter not just for retaining audiences through an acquisition, but for retaining newsroom staff and donors as well. Most of the digital newsrooms we studied retained their brands post-acquisition. John Mooney, a founder of NJ Spotlight, specifically ensured that brand retention was part of the acquisition agreement. He shared, 

”One of the points in our [acquisition] agreement was that our brand wouldn’t change. We had a clause that we said we wouldn’t give up our brand or our site for at least three years… That might not have mattered for other cases, but as a founder you put your heart and soul into this. It would have hurt some of our donors too, if we had lost our brand.”

The success of an acquisition will depend on many things — but a shared understanding of each brand will be a huge contribution. You can commission a brand study from a marketing firm to get data on each brand. You can also try to field your own survey to figure out how audiences hold each brand in their minds.

Putting it all together. 

With an understanding of each newsroom’s strengths, the coverage gaps in your ecosystem, the behaviors and preferences of each newsroom’s audience, and the brand strengths of each newsroom, you should have all the insight you need to draft a new editorial strategy that is closely connected to your editorial mission. 

Because post-acquisition integration will be a process, not a one-time event, consider setting strategy and goals for the first six months, one year, and two years. Crafting interim steps can help you keep tabs on the progress of integration. If your strategy and goals are too ambitious, you will set up teams for disappointment and failure. If your strategy and goals are not ambitious enough, they won’t help you to make progress on the changes necessary to get through the integration.

Articulating editorial independence policies

Achieving a common understanding—and explicit documentation—of editorial integrity is another key milestone in crafting an editorial strategy. Many mature public media newsrooms have editorial integrity policies in place that enshrine editorial independence as an explicit value. These policies are designed to prevent any editorial influence from major donors and commercial partners of the station. An increasing number of stations are also adopting donor transparency policies that put in place procedures for disclosing the identity of donors or sponsors that might create a perception of a conflict of interest for particular stories. 

Editorial independence and editorial integrity policies are particularly important in university-licensed stations whose governing bodies and governance procedures are tied into university systems. For an independent newsroom that may have been accustomed to its own board or the oversight of a fiscal sponsor, the shift to a new station governance system — especially university governance — can require a learning curve. 

It is vitally important that digital newsroom leaders and station leaders discuss expectations and policies around editorial independence, particularly where donors, board members, and commercial sponsors are concerned.

With a shared mission, vision, and editorial strategy in place, the next major decision that will set an acquisition up for success is to choose a structure that will govern the configuration of different teams and activities. 

Though the word “acquisition” implies a full integration of people, brands, and processes, there are other ways to structure the relationships between an acquired news outlet and public media station operations that don’t necessitate full integration. These structures allow for different degrees of autonomy between units and activities. Depending on your vision and mission, you may want to opt for a lower degree of integration, or shift the level of integration over time. We classify these structures into three types. 

1. Full Integration
2. Targeted Integration
3. Structural Separation

Structure should follow mission, vision, and strategy. 

If you find that your public media newsroom and the digital newsroom you want to acquire have very differentiated missions and strategies, you might want to choose a structure that segments the newsrooms and news brands to some degree. If you decide you want to craft a single editorial mission, vision, and strategy that has the acquired newsroom’s strengths as the base, then a full integration structure is a good decision. The acquisition structure should go hand in hand with the acquisition’s vision, mission, strategy and goals. 

Structures can shift over time. 

This is not to say that the structure you start with is the one you should or will keep for all time. Because post-acquisition merger processes are fundamentally organizational change processes, we strongly recommend that you assess your organization’s readiness for change as part of your initial structure decision. If either organization has been stressed by a period of many changes prior to the merger, you may want to begin with keeping operations structurally separate, and then shift towards full integration over time. 

For example, some stations/digital newsroom pairs in the study, like WNYC and the Gothamist, began with structural separation but were moving towards an integrated model. Others, like Colorado Public Radio and the Denverite, for reasons of coverage and service specialization, adopted a model between structural separation and targeted integration. Still others like Cascade Public Media, because their acquisitions were more mature, were operating under a full integration model. The combination of time-since-acquisition and strategic choice will help shape which merger structure makes sense at any given point in time.

Fully integrated editorial structures

A fully integrated editorial structure is what most stations and digital news outlets will likely want to achieve, long term, as part of an acquisition. Full integration involves combining the editorial decision-making and workflow activities of the acquired news outlet and the station. Full integration of a newsroom implies shared staffing, shared reporting structures, and creating common ways of working.

Benefits of fully integrated editorial structures

• Cultural transformation. Over time, full integration of a digital newsroom and a legacy broadcast newsroom can lead to culture transformation of a station and a digital newsroom into a multi-platform civic news institution. This is a powerful result and one worth pursuing.
• Robust multi-platform coverage. The “one newsroom” strategy combined with differentiated branding provides for robust multi-platform coverage that reaches a variety of audiences with rich and multi-faceted stories.
• New leadership. Because the cultural transformation and change required is so intense, a full integration structure will inevitably open up opportunities to bring in new leadership and new thinking.
• Higher level of local service. A fully integrated newsroom which has surmounted the cultural, workflow, and strategic challenges can truly claim to be providing a higher level of local public service in the content it produces. 

Drawbacks of fully integrated editorial structures

• Cultural turbulence. The path to creating one newsroom is not easy. The risk of going for full newsroom integration is a period of high cultural turbulence, particularly “us versus them” dynamics. This period of turbulence can have real costs in terms of stress, anxiety, and burnout in staff; it can also distract and derail leaders from other priorities.
• High turnover. The other risk of creating a fully integrated newsroom is the high level of turnover which can overwhelm existing staff and human resources functions. Though turnover is absolutely necessary for cultural change, turnover (and filling new positions) is also expensive and time-consuming. Leaders who want to go for full integration should be prepared for the turnover that follows.
• Brand dilution. Managing multiple brands is a growing edge for many public media stations. The risk with a full integration strategy is that the marketing function can’t keep up with the demands and complexities involved in managing multiple brands. Without clear marketing and messaging, both the digital newsroom brand and the station brand run the risk of brand dilution externally, and brand confusion internally.
• Investments required. Editorial integration can seem like the only priority in a full-integration strategy. But the benefits of full integration will only be fully realized when you make investments in technical and financial integration alongside editorial integration. Without these parallel investments, the new digital news products will be under-leveraged and under-monetized. But it can be difficult to commit the level and diversity of resources needed for full integration when making “one newsroom” is one priority among many. 

Fully integrated editorial structure summary

Fully integrated product structures

In a full integration of the product structure, the digital newsroom migrates to the station’s technical stack (e.g., CMS, CRM, ESP). The digital newsroom also benefits from the support of the station’s product or digital team, and its products have a place on the wider station product roadmap.

Advantages of fully integrated product structures

• Support for migration. Migration to any new system can be tricky for a small independent newsroom. The advantage of a fully integrated product structure is that the acquired site can take advantage of station support and attention to migration.
• Greater resources for product development. Many public media stations have bigger product and digital budgets than small independent newsrooms. Folding in support for a digital newsroom’s product into a larger product team means there is potential for easier department-level resourcing for digital news product development.
• Insight across audiences. One of the key advantages to a fully integrated product structure is the visibility product teams can have into overlaps and differences between legacy audience and new audience. When product data and resources are shared, this can generate powerful insights in audience behavior that can translate to better product development, better editorial decision-making, and better spotting of monetization opportunities. 

Disadvantages of fully integrated product structures

• Migration risk. Though fully integrated structures can provide support for migration to new systems, the migration of a digital newsroom’s data and operations to a new stack is not without risk. Disadvantages can include the time and expense of migration, and the risk of data loss in the migration process.
• Added complexity and technical weight. Many of the systems that support station publishing and membership are very heavy-duty and designed to handle large volumes of broadcast members’ data. Even on the digital content management side, the publishing functionalities of a station CMS may be unnecessarily complicated for the acquired digital newsroom (many have to handle digital audio formats in addition to text). Thus migration to new technical systems may also entail a loss of degrees of freedom. And acquired digital newsroom staff may face added complexity when moving to enterprise-level software.

Fully integrated revenue structures

In a fully integrated revenue structure, the sales and membership functions which support a digital newsroom are absorbed into the station’s existing sales and membership departments. The digital newsroom’s products are monetized alongside other station properties. In fully integrated models, costs and revenue can be accounted for at the station level, rather than broken out separately by product. 

Advantages of fully integrated revenue structures

• Expanded, centrally-managed ad inventory. The advantage of a fully integrated revenue strategy for underwriting and sponsorship is that the new digital news products can diversify and expand the inventory a station can offer to its business partners.
• Strengthened digital membership capability. The advantage of a fully integrated revenue strategy for membership is that a station’s membership team can support and learn from growing digital membership around a new brand. 

Disadvantages of fully integrated revenue structures

• Sales training likely needed. The disadvantage is that a station’s existing sales team might not be well versed at selling digital media or packaging digital media with existing broadcast offerings.
• Risk of under-prioritization. The disadvantage of fully integrating membership is that because the station’s existing member base will more than likely dwarf a digital newsroom’s member base, it may be difficult for a station membership team to prioritize digital membership without expanded staffing.

Targeted integration editorial structures

Under a targeted integration editorial structure, some activities and parts of the editorial workflow and decision-making are combined while others are kept autonomous. For example, you could opt to have the broadcast news and digital news teams maintain their own reporting structures, but fold the acquired news team into the digital news team structure.

Benefits of targeted editorial integration

• Just enough interdependence. In a targeted integration model, editorial teams have just enough interdependence that they can learn from each other through targeted collaboration. But they don’t have so much interdependence that consistent workflow or cultural conflict interferes.
• Cross-platform learning. For staff who are interested and capable, targeted newsroom integration can provide opportunities for learning and creating on a different platform. Reporters aren’t forced to learn a new craft (with the difficulty that comes with that) but can do so if they choose.
• Intact teams. In a targeted model, teams can feel mostly intact and able to function as usual. This can be a huge benefit, particularly if the formal acquisition/transition process itself has been prolonged.

Drawbacks to targeted editorial integration

• Mid-level leadership required. A targeted integration model requires savvy mid-level editorial leadership to help teams coordinate when needed, but also maintain separate operations. Getting this right requires both smart structures (roles and reporting relationships) and a good match of mid-level leadership personalities. A good relationship between a broadcast newsroom lead and digital newsroom lead will go a long way towards making a targeted integration model work.
• Risk of muddle. Without savvy mid-level leaders, the risk is that the acquisition and merger in a targeted integration structure can feel “unfinished” to staff. Fuzzy boundaries and unclear strategic mandates can further create anxiety and confusion in staff which will ultimately work against a successful acquisition.
• Inadequate training. While not everyone in a targeted integration model needs to understand the methods and craft of the other team’s platform, those who do want to cross over run the risk of being poorly trained and poorly managed. Inadequate training and mentorship on other platforms can lead to quality issues and extra work for everyone in a newsroom.

Targeted integration editorial structure summary

Targeted integrated product structures

In a targeted integration product structure, the acquired digital newsroom maintains some of its own software and migrates to some of the station’s software. An acquired newsroom could also retain its own product team, and that team can coordinate as needed with the station product/digital team.

Benefits of targeted integration product structures

• Can enable targeted product experimentation. If the digital newsroom maintains its own Customer Relationship Management system (CRM) and Email Service Platform (ESP) but migrates its Content Management System (CMS), the advantages are that any existing membership and sponsorship relationships can remain intact, but the newsroom can test cross-platform news product strategies by sharing station digital resources.
• Can enable targeted monetization experimentation. If the digital newsroom maintains its own CMS but migrates to the station’s CRM and ESP, the advantage is that the digital newsroom can test out revenue strategies with the station’s larger membership and subscriber base, while maintaining editorial control over its main digital product. 

Drawbacks of targeted integration product structures

• Split resources and decision-making. The disadvantages of targeted integration are that resources and decision-making are often split between teams and maintained under different brands, which can lead to confusion and missed opportunities.

Targeted integration revenue structures

The sales and membership functions of a digital newsroom can also be semi-integrated into station operations. For example, the sales function supporting an acquired digital news product can be rolled into a station’s sales team, but the digital news team can retain responsibility for its membership and philanthropic revenue. Costs and revenue can be accounted for either at the organization level, or at the digital news product level. 

Advantages of targeted integration revenue structures

• Fitting relationships to scale. The advantage of opting for targeted revenue integration is that leadership can choose which kinds of business relationships (membership, sponsorship) make most sense to preserve at the digital news product level and which are a better fit for scaled operational support. 

Drawbacks of targeted integration product structures

• Risk of under-investment. The disadvantage is that if any of these support functions aren’t properly staffed or resourced—either at the station level or the digital news team level—teams can quickly become overwhelmed and revenue progress can grind to a halt.

Structurally segmented editorial structures

Many acquisitions will likely go through a period of structural segmentation, especially in the early days. Under a structurally segmented model, the public media and digital newsrooms fully maintain their independence from one another. Some stations may choose to keep their digital newsrooms structurally separated for reasons of strategy, autonomy, and mission. There are benefits and drawbacks to keeping newsrooms structurally separate. 

Benefits of segmented editorial structures

• Newsroom independence. The main benefit to designing for the structural separation of public media and digital newsrooms is that it is relatively easy to grant the digital newsroom continued independence in its orientation, choice of stories, and branding. For digital newsroom leaders that want to wade into a merger process slowly and calibrate their level of interdependence with the station’s wider editorial operations, beginning with structural separation can make sense.
• Less staff pressure. In a structural separation model, the burden is on leadership to fit the strategic pieces together of a newsroom acquisition. This puts less pressure on staff to figure out collaboration, branding, and resourcing.
• Low cultural turbulence. Because each newsroom continues with mostly business as usual in a structural separation model, this model has the lowest level of cultural turbulence of any of the post-acquisition merger structures.
• Cross-promotion. It’s important to note that even in a segmented or structurally separate model, the reporters from the acquired digital newsroom can still appear on-air and share their reporting. And similarly, stories produced by the public media newsroom can be cross-posted to the acquired site. Structural separation as an acquisition model refers to the operations of the newsroom and related staffing. Content strategy is flexible across the different models.

Drawbacks of structural separation

• Little culture change. For stations hoping to transform the culture of their newsrooms with the help of a newsroom acquisition, adopting a structural separation model will not help. Culture change is hard to achieve without the interdependencies, and cultural work, that are part of bringing different teams together.
• Resourcing difficulties. Digital newsrooms may find it is difficult to get their resource needs met under a model of structural separation. Especially if the digital newsroom is small compared to the scale of wider station operations, getting a seat at the decision-making table—and advocating for resources—can be very hard work when a digital newsroom is in its own separate silo.
• Strategic confusion. Ironically, a deeper strategic question can emerge in a structural separation model – what is the bigger purpose here? If a station acquires a digital newsroom, but there is little interdependence or integration into station operations, staff on both sides may become confused about why the acquisition was undertaken in the first place.

Structurally separated editorial structures summary

Structural separation product structures 

In this set-up, the digital newsroom maintains its own technical stack and does not integrate with any station software. 

Benefits of structural separation product structures

• Avoid brand confusion. This can work well when a digital newsroom truly serves a small segment of the station’s overall audience, and the degrees of freedom that would be lost in product and revenue by connecting into any part of the larger operation are too numerous. The advantages of maintaining separate stacks is that it helps to avoid brand confusion, and makes it easier for digital news teams to make strategic decisions for their products without having to build consensus with the station.

Drawbacks of structural separation product structures

• Less visibility. The drawbacks of keeping a digital newsroom’s product stack structurally separate from the station are the lost opportunities for visibility and learning across products and brands. Particularly for stations that are interested in growing their digital fundraising, segmenting technical stacks can help with “sandbox” learning from small experiments with the digital brand, but those learnings will be difficult to translate unless all digital products are supported by a single technical stack. It can also be difficult to track the overlap of the digital product’s audience and membership and the broadcast’s audience and membership if each is supported by a different technical system. Furthermore, a segmented model of product management can create more work for a station’s digital team by expanding the set of tools and services they have to care for. 

Note: Some members of the cohort planned a phased approach to integrating product structures, beginning with a segmented model and then integrating (or considering an integration) once newsroom operations were stabilized. For example, Billy Penn had been using the News Revenue Hub’s technical stack to manage its newsletters and members when it was acquired by WHYY, and they continued the Hub’s system after the integration with the station. The relationship with the Hub was an important source of continuity for Billy Penn and its supporters as the outlet transitioned into the station. However, as the desire for better visibility of digital audience behavior and member messaging across the station’s digital products grows, Billy Penn is considering transitioning onto the station’s CRM and email service provider.

Structural separation revenue structures 

In a structural separation revenue strategy, the acquired digital news site remains a standalone product with its own diversified business model. All of the membership, underwriting, sponsorship, and major giving activity are the responsibility of dedicated digital product staff, and costs and revenue are accounted for at the product level. In this set-up, the digital news outlet and public media station will have to negotiate what, if any, forms of support the digital newsroom can expect from the public media station. 

One example of a structural separation revenue strategy is the WAMU and DCist model. DCist membership is kept structurally separate from WAMU’s program, which allows the DCist team to maintain the tone and feel of the DCist program. In this kind of structure, the station and the digital site have to make difficult decisions around which station resources (and how much) to allocate to building digital membership versus other station verticals and products.  

Benefits of structural separation revenue structures

• Maximum autonomy. The advantage of this model is that it preserves the maximum degree of flexibility, autonomy, and coherence of the acquired digital news product. 

Drawbacks of structural separation revenue structures

• Less revenue. The disadvantage is that it can under-deliver on revenue potential if there is no exchange of resources or support between the station and the acquired site. A dynamic like this can sometimes result in the digital news site team feeling siloed and under-resourced, and the station team feeling overstretched.  

As you consider which combination of structures is right for you, it is important to understand that managing revenue and product integration will require just as much work as achieving editorial integration. We recommend taking into account the following factors.

Make a long-term plan for how you will invest in digital revenue growth

Growing digital revenue requires time and patience, and if staffing and resources aren’t adequate, all forms of digital revenue will grow even more slowly. This is a risk especially in merger situations because of the usually lopsided sizes of digital newsroom baseline revenue versus station baseline revenue. Under-investment in support for digital revenue was a common finding across our study cohort.

As part of an acquisition process, the station and the digital newsroom should discuss what investments in digital revenue capabilities are needed to monetize the new digital properties. These could include a dedicated sponsorship sales position, or a certain percentage of underwriting team time given to the digital product sales, or training of underwriting staff on how to sell the new products. In terms of membership, resource plans could include support for a membership program launch, dedicated membership staffing, or upgrades to a new membership tech stack. The rest of the section should give you more ideas for what digital revenue investments might look like. 

Make a plan for how you will integrate editorial, product, and revenue decision-making 

Growing digital revenue (both contributions and earned revenue) requires tighter integration with product and editorial strategies than for broadcast forms of revenue generation. Too much separation between a digital newsroom’s product, editorial support, and revenue support can lead to under-leveraged revenue potential.

Make a plan for how product and editorial staff can coordinate as needed with the staff responsible for setting and executing digital revenue strategies. In many digital-only news organizations, the product team acts as the interface between the editorial and revenue teams. Consider how you could replicate similar decision-making structures in the context of a merged newsroom. 

Plan to leverage a strong digital newsroom brand to grow earned revenue

A willingness to leverage the acquired digital brand combined with investment in growing digital media sales capability should absolutely be priorities for stations that want to acquire digital newsrooms. 

On the earned digital revenue front, this study found that digital newsrooms which brought strong digital brands and strong local business relationships were huge assets to their stations. The station sales teams that had the capability and capacity to work with an expanded palette of digital brands and digital inventory were able to make good use of these acquisitions to grow commercial revenue streams. For stations whose sales teams had less experience or expertise in selling digital media, the commercial revenue potential of the acquired sites remain under-realized. 

Educate your major donors about the acquisition

Major giving is a strong (and growing) baseline capability in many public broadcasting stations. Station board members and major donors who aren’t regular digital news consumers may require some education by station leaders about the strategic importance of potential acquisitions. Especially in communities where local news production capacity is dwindling, this case is not hard to make. 

However, station and digital newsroom leadership should be prepared to educate major stakeholders about the importance and intended outcomes of an acquisition. Additionally, this study found that digital newsroom leaders and founders themselves are often well-connected in giving communities. Combining development efforts between the acquired digital newsroom and existing station development staff is a powerful way to grow the sustainability of an acquisition over time.