Investing in Newspapers to Save Them

There are two independent bookshops off the charming town square in Healdsburg, California, and local hardware stores have thrived as the community has pushed back against the encroachment of big box retailers.

The community also loves its local newspaper. When Rollie Atkinson, who owns four weekly newspapers in Sonoma County, reduced the number of print pages a couple of years ago, loyal readers “raised holy hell,” he said.

But it was a fiscal necessity: The traditional business model for newspapers, in Healdsburg and elsewhere, was failing rapidly. So as he cast about for new ideas to save the business, he was inspired by what another Northern California news outlet, the digital news site Berkeleyside, had done: raise about $1 million by selling stock to readers.

So this year, Atkinson, in what is believed to be a first for a local newspaper, began making his pitch at cocktail gatherings and dinner parties and in full-page advertisements. The so-called direct public offering — essentially a small scale IPO but without investment banks — has so far raised $100,000 by selling equity. The offering lasts until March, and Atkinson said he hoped to raise $400,000.

That money, first and foremost, will go toward higher wages for his journalists, some of whom have been making about $15 an hour. Atkinson’s company, Sonoma West, includes four newspapers — The Healdsburg Tribune, The Cloverdale Reveille, The Windsor Times and Sonoma West Times & News — whose combined paid circulation is about 9,900.

Some readers who invested said they did so not just to support their local paper but also as statement against the rise of fake news, and against a president who has constantly battled the notion of a free press.

“I think, now more than ever, we can support democracy by supporting our communities,” said Marie Gewirtz, who is retired and has invested in the newspapers.

Sonoma County, with an abundance of wealth, vineyards and aging baby boomers, is fertile territory for Atkinson’s experiment.

“We are a liberal society that believes in taking care of your neighbors and supporting local stores,” said Rick Theis, another reader who invested.

Theis said that the local newspaper often has stories about people he knows well, and that he often finds uplifting stories there as well. It’s not all the doom and gloom he gets from the national news media.

“The national news is so depressing,” he said. At the community level, he said, at least there is a balance between problems and “good things happening.”