Chicago News Cooperative To Shut Down February 26
By Amy Cavanaugh in News on Feb 18, 2012 4:00PM
This is a blow to Chicago journalism—the Chicago Reader reported late yesterday afternoon that Chicago News Cooperative will end operations on February 26. CNC, a non-profit organization, provided four pages of Chicago-centric news each week to The New York Times and posted news stories to its own website. CNC, which also has partnerships with WTTW, Chicago Public Radio, and other organizations, is known for its thoughtful, in-depth pieces of journalism.
Founder James O’Shea, who launched CNC in the fall of 2009, told the Reader that he asked the Times for financial support, but the Times refused:
There's been no quarrel in New York with the quality of the report that CNC provided, but it didn't increase circulation or draw advertising to an extent that made the Times willing to commit more money to it. CNC's financial crisis came to a head last week, O'Shea explained, when the IRS issued a ruling that compromised the level of corporate underwriting and foundation support CNC could expect in the future. According to the IRS, tax benefits that would be received for funding particular projects would be denied if the funds were simply intended to sustain the operation. CNC's primary financial lifeline has been the MacArthur Foundation, which has given it a million dollars.
According to Crain’s Chicago Business, O’Shea is looking for ways to structure CNC so it is part for-profit and part non-profit. Apparently, this could include a relationship with the Chicago Sun-Times:
"We are in discussion with the Sun-Times about the continuation of some of our coverage areas, including education coverage," Mr. O'Shea said.
Michael Ferro, chairman of Chicago Sun-Times owner Wrapports LLC, is on the CNC board of directors, according to the co-op's website. The chairman of CNC's board is Madison Dearborn Partners LLC Chairman John Canning Jr., a financial backer of Wrapports.
CNC supported itself through corporate and individual donations, and O’Shea told Crain’s that he did not want to continue to seek donations while a for-profit venture is under consideration. CNC plans to hold onto its staff of eight paid employees, seven on retainer, and three to five freelancers.