How exactly does worker-owned news work?

Worker-owned newsrooms sound rad but how do they work exactly?

What I learned at Tuesday’s panel featuring four media co-ops is that there are a lot more of them operating than I realized. There’s actually so many that the US Federation of Worker Cooperatives maintains an extensive list.

This growing conversation of news cooperatives is worth paying attention to, even if you are an indie journalist building a solo publication.

One audience member at the panel raised up the question of authors banding together to share some of the immense labor that publishing and promoting a book has become. This mindset of *what could we do together* is a powerful way to take on power.

Anyway, I took tons of notes for you. Read below for 5 of the top questions to answer with your worker-owned co-op.

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5 top questions to answer about your worker-owned cooperative

Worker-owned media isn’t a pipe dream. It’s a real way to operate your business and it can be surprisingly straight forward, so long as you have the right partners.

The four orgs on the panel were:

• Defector (Founded 2020, Annual revenue as of 2023 ≈$4.5m, Team size 26)

• Time of Day Media (Founded 2013, No revenue reported, Team size 8)

• Maximum Fun (Founded 2004, Converted to Co-op 2023, Multi-million revenue not disclosed, Team size 25)

• Hell Gate (Founded 2022, First year annual revenue ≈$500k, Team size 7)

1️⃣ How to find startup cash

Esther Wang at Hell Gate spoke about how they solicited some donations to start up as they needed 3+ months of runway. Checks ranged from $5k-10k with some smaller and some bigger, including a couple philanthropic donations. Hell Gate is a private corporation, not a nonprofit, so they used IRE as their fiscal sponsor for those bigger donations.

The owners also pooled together $28k to invest in their own company. Read more in their annual report.

Ongoing cash comes from reader subscriptions, one time reader donations, and sponsorships/ads though this heavily varies co-op by co-op. Hell Gate is 50% subscriber funded with a full time staff of 7 which is pretty amazing for an organization that is only two years old.

2️⃣ Who gets ownership

Businesses can start as a co-op or convert to one. Defector got started with 19 people just after its owners resigned en masse from Deadspin.

Maximum Fun was actually owned by one dude and converted to a co-op years later when he approached the team and asked if they were up to the task. They used Shared Capital Cooperative to provide a loan so they could buy in.

In the case of all four panelists, there was immense trust in the initial founding co-op members, often working together for years before formalizing the partnership.

3️⃣ How worker-owners join and leave

Jasper Wang from Defector mentioned that its rare that they bring in another worker-owner but when they do, there’s a vote of approval from the team. They do a unified dilution of shares, meaning that everyone’s stake is equal and reduced by the same amount when someone new joins. Jasper pointed out that their business exists to support their mission and their staff and that it is not primarily a wealth building vehicle. They’re not aiming for an exit.

As Stacey Molski from Maximum Fun shared, when someone leaves, they get a pay out of their profit share.

Notably, all the organizations at this event still work with lots of freelancers.

4️⃣ Who makes decisions

Deciding who makes decisions is one of the most important things to get right (according to my lawyers when I asked them about co-ops.)

Esther from Hell Gate explained their committee structure which I’ve sat in on a couple times. They have organized a “growth committee” and an “operations committee” among a few others. Since Hell Gate is still small, they make major decisions with the full team.

Jasper from Defector said they elect an internal board to make executive decisions on behalf of everyone. The board rotates and everyone is eligible to be on it.

Stacey from Maximum Fun spoke to a decision matrix they created when they converted into worker-ownership. (Here’s a visual example of what those look like from my favorite co-founders Olly and Wilson at Senja.)

5️⃣ Whether or not unionization is appropriate

Co-ops and unions have related goals but they offer different benefits. In the case of Time of Day, they opted for both!

Time of Day produces digital campaigns and video content and, due to the nature of their work, they are covered under a contract with Writers Guild East. That means that when their worker-owned company books projects, the staff members who work on those projects bank hours with the union that makes them eligible for healthcare and pensions among other things.

Jasper from Defector called out what a huge thing this is as negotiating the healthcare deal every year falls into his lap.

Healthcare aside, Hell Gate demonstrated they can achieve similar effects to unions when they joined forces with other New York-based newsrooms to get the Local Journalism Sustainability Act passed which offers them a tax credit on a portion of salaries.

Our takeaway

A whole lot of this has been figured out! From my vantage point outside journalism, the question is not so much “is journalism a viable business model” but more “how do we get more journalists seeing themselves as viable entrepreneurs?”

Worker-owned is just one way forward for journalists starting outlets, and whether or not you choose to operate that way, there’s a lot of people out there who can offer you a shortcut, a template, or a best practice. You don’t have to build your ship from scratch.