Nick Cothrel landed his dream job. A few months after graduating with a journalism degree from Cal State Fullerton, the Orange County native was hired by Sports Illustrated as a football beat writer.

Then, in his first year on the beat, Cothrel followed the Los Angeles Rams. He hadn’t been out of school a year but was already inside SoFi Stadium for the most distinguished sports magazine in America.

He was there for the beginning of the Matthew Stafford era as the Rams won their division, rolled through the playoffs and defeated the Cincinnati Bengals in Super Bowl LVI.

For the next two years, Cothrel delivered three stories a day for the magazine where he planned to work for years to come. But in February 2023, everything came crashing down.

His boss at Sports Illustrated told him he was being laid off following the 2022-2023 NFL season. The company shifted its editorial structure and no longer supported Cothrel’s position.

But his boss offered him a new “job.” They invited him to do more stories for less money on a freelance basis. He declined.

“I opted not to take it,” Cothrel said. “It wasn’t even a livable wage or anything, so essentially I was just left without a job.”

Tens of thousands of journalists can relate. Front Office Sports reported that the media industry cut over 20,000 jobs in 2023 alone. That is on top of another 30,000 layoffs after the Covid shutdowns of 2020.

The sports sector was hit particularly hard. Even heavy hitters like ESPN, the Los Angeles Times, the New York Times and Barstool Sports experienced some sort of staff cuts in recent years.

But these layoffs aren’t one and done.

“SI has had several different rounds of layoffs and restructuring throughout the company,” Cothrel said. “Unfortunately, that’s become the norm in journalism right now.”

The State of Journalism

The media industry is in a state of financial crisis. Advertising revenue, once the multi-billion dollar well for journalism, evaporated over the last two decades. Since the turn of the millennium, the total ad revenue of U.S. newspapers plummeted from just under $45 billion to below $10 billion. 2020 was the first time that circulation revenue surpassed ad revenue in the American newspaper business since at least 1956, when the first data was available, according to Pew Research.

That would not be a problem if the circulation of newspapers was not at an 80-year low. The estimated circulation of U.S. daily newspapers is just one-third of what it was in the 1980s, according to Pew Research.

But where did this advertising revenue go? It did not disappear. Rather, it was diverted into the pockets of the new major force in the ad industry — multinational technology companies.

“Facebook and Google collect about 50% of every digital ad dollar spent in the U.S.,” USC Professor of Professional Practice Gabe Kahn said. “Big tech players are finding ways to tilt everything toward them. That’s because they built the marketplace and they are also players in the marketplace. It is completely corrupt and, I think, monopolistic.”

These corporations influence more than just advertising sales. The rise and fall of BuzzFeed News exemplifies just how much power companies like Meta have in news distribution and exposure on the internet.

The inception of BuzzFeed News came at a time when the internet audience switched from searching on engines like Google to searching directly on social media platforms, such as Instagram, Facebook and X (formerly Twitter). BuzzFeed News quickly recognized the scale by which it could distribute its content on social media, and the site was rewarded handsomely in the early years of this practice.

“‘Twitter is our homepage’ was [BuzzFeed’s] motto,” former BuzzFeed News editor-in-chief Mark Schoofs said. “And for a while, that looked great. A million page views for a story was certainly not rare — we were growing by leaps and bounds.”

In Schoofs’ words, BuzzFeed “cracked the internet” with its news coverage. In its 11-year existence, BuzzFeed News won two National Press Foundation Awards, a Sidney Award, a British Journalism Award, a George Polk Award and a Pulitzer Prize for International Reporting.

It seemed that news found a supportive home on the internet with social media, but like a tragic narrative that keeps the protagonist from actualizing their dream, another setback hit the news industry.

The hysteria surrounding the 2016 presidential election, particularly on Facebook, wrecked the relationship between news outlets and social platforms. Controversies surrounding Russian-operated bots, partisan political ads and other disastrous activity on Facebook enmeshed the journalism industry in Meta’s divorce from news distribution.

Meta recently removed the Facebook News tab from the site in the U.S. and Australia. The company also said it will not seek new commercial deals for traditional news content in the U.S. and four other countries.

News outlets around the world are now navigating a steep decline in referral traffic across all socials. From August 2022 to 2023, Facebook referral traffic to the top 30 news websites plummeted 62%. The consequences for some online publications have been detrimental.

“Facebook was the 900-pound gorilla,” Schoofs said. “That’s where the traffic came from. Suddenly, we were getting far less page views and far less advertising revenue.”

Even during the golden years of Buzzfeed News, the newsroom was still losing tens of millions of dollars every year. BuzzFeed subsidized its news division through its other online content, but eventually losses became too great to ignore. In 2018, the newsroom began its consolidation. That happened until company CEO Jonah Peretti pulled the plug on BuzzFeed News in May 2023.

The moral of BuzzFeed News’ story is that quality journalism costs money to produce, and the company did not prioritize making its reporting profitable.

Not every newsroom can discover sustainable revenue streams to fund its activities. If anything, companies are inclined to consolidate before they uncover lucrative avenues.

Legacy media is emblematic of this decline in production and quality.

Gannett, America’s largest newspaper company and bastion of local journalism, closed or sold hundreds of papers between the years 2019 and 2023, NPR reported. In that timespan, Gannett’s staff shrunk from 25,000 employees to 11,000.

According to Northwestern Medill’s 2023 "State of Local News Project,” 204 U.S. counties are without a single local news outlet. More than half of American counties have either zero or just one local publication.

Leading national papers are also struggling for revenue. Most newspaper sites have implemented paywalls to generate subscription revenue, but that induces even greater problems, Kahn said.

“What we have now is this perverse incentive structure where quality news costs money and shitty news is free,” Kahn said. “There's a mountain of pink slime between the consumer and actually getting informed. If you are on Instagram or something like that, you only get a snippet of the story, a headline. All of the sudden, people feel that they’re informed by osmosis because they’re on their phones for eight hours a day.”

Pew Research published a 2022 survey where 50% of adults said they “sometimes” or “often” get their news from social media. For Gen Z Americans, half opt for social media as their daily news source, according to Statista.

“Media literacy is one of the issues that we need to address in order to fix this problem,” Kahn said. “[getting news from social media] is such a reductive nature of understanding.”

Searching for Answers

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If billionaires can't save journalism, what will?

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A common trope in journalism is a newsroom owned by a philanthropic billionaire — a figure that will pledge millions of dollars to keep the printers running. Whether it be Jeff Bezos’ Washington Post or Patrick Soon-Shiong’s LA Times, these media mammoths are actually in the negative eight to nine figures on a yearly basis.

If the size of the owner’s checkbook is irrelevant to a newspaper’s success, what can publications do to generate revenue, while also providing reliable information to the public?

The answer is excruciatingly simple, but by no means effortless: be indispensable.

“News can make money. It doesn’t take a billionaire owner to subsidize it,” Schoofs said. “There are several ways that news can make money. First of all, if it provides something that people need.”

Outlets specializing in financial and political news are among the most successful financially. The Wall Street Journal was the most widely-circulated American newspaper in 2023, with more than twice as much exposure as the New York Times. While the NYT is the global leader with 9.4 million digital subscribers, the WSJ is also in the positive with 3.5 million patrons.

Politico, whose mission statement is to “inform the powerful, particularly those who have a political, professional or financial stake in politics,” collects hundreds of millions of dollars in revenue annually, mostly from its “Politico Pro” subscribers.

“Politico makes some money from its standard journalism, but how it really makes its money is through its coverage of the minutiae of certain industries,” Schoofs said. “A regulatory change can literally be tens of millions of dollars for a company, so they are willing to pay five figures a year or more for a newsletter.”

Another strategy for driving revenue, Schoofs said, is for the newsroom to create a real bond with its readers. This can be achieved through a variety of methods that aren't always journalistic.

Semafor, a global news site centered on politics, business and technology, hosts a variety of public events including panels, presentations and other discussions. In 2022, the company organized a fireside chat with the president of Rwanda. CEO Justin Smith said that Semafor made monthly profits in its first full year of operation in 2023.

In the nonprofit space, publications like Capital & Main generate revenue through annual fundraising events. The watchdog site will present “Exposés: 10 Years of Investigating Inequality and Climate Change” in early June.

Not every major newsroom makes the extra effort to maximize its reach, and Schoofs believes that Southern California’s largest daily newspaper can do more.

“I will venture a criticism of the LA Times. I don’t think that they’ve had a really dynamic business leader,” Schoofs said. “They basically just sell subscriptions, but there is so much more that they can do — they have an amazing food section. Could they not create more of a bond with their readers through that food section?”

The LA Times does have staple promotions such as the annual Festival of Books, but the company is still scrambling to rediscover its identity in the news business. It has been decades since the LA Times could be spoken in the same breath as the New York Times, Washington Post or Boston Globe, and the paper’s losses in revenue and staff reflect that discrepancy. Soon-Shiong’s LA Times lost somewhere between $30-$40 million in 2023 and cut 20% of the newsroom in January of this year.

Nonprofit Journalism

In the contemporary journalism economy, alternative revenue streams to advertising and circulation are becoming increasingly necessary for news outlets, especially nonprofits.

The nonprofit model has become one of the most popular trends in American media. Over the last 10-15 years, hundreds of newsrooms have adopted this framework as an alternative — and often a replacement — for the withering presence of legacy media.

“The digital-first outlets that started springing up locally were helping fill news deserts — some of those places where the traditional outlets had closed,” said Sherene Azimi, communications director of the Institute for Nonprofit News. “People are coming to realize that they need to save or reimagine news in their community.”

The nonprofit news space is rich with success stories that range from pioneers such as NPR and Mother Jones, to modern examples like ProPublica and CalMatters. The nonprofit surge is a bright spot in an otherwise bleak panorama of news, but concerns still remain regarding if this model will be a permanent answer to journalism’s questionable status in the U.S., largely because of how reliant these newsrooms are on donations.

There is no doubt that philanthropic funding has assumed an essential role in nonprofit journalism’s function. With the news industry in financial crisis, foundations have dedicated serious resources to journalistic efforts. Last year, the Knight and MacArthur Foundations headlined a coalition that pledged $500 million into Press Forward, an initiative aimed at revitalizing local news coverage in the U.S.

According to survey data collected from 315 nonprofit news organizations in the Institute for Nonprofit News 2023 Index, foundations account for 48% of total nonprofit news revenue. On an individual basis, 65% of revenue comes from major donors — distinguished by a donation of $5,000 or more.

Some local investment in nonprofit news has been achieved through initiatives such as NewsMatch, a campaign where a handful of charitable foundations match the donations made to newsrooms by community members. The program has sourced over $300 million of funding since its inception in 2017.

Hundreds of millions of dollars in support sounds monumental for journalism, but there is no telling how long foundations like Knight and MacArthur will stay dedicated to keeping newsrooms afloat. As it seems to be the case in for-profit media, creative business strategies are essential to the survival of nonprofits.

“There's a lot of innovation and experimentation that's happening in the nonprofit space to try and figure out how to increase the revenue side of things,” said Danny Feingold, the founder and publisher of Capital & Main. “In part, that comes because the philanthropic sector reminds us on a regular basis that their support is limited, potentially finite.”

The thought of losing donor funding is near inconceivable to most nonprofit newsrooms, especially those delivering invaluable coverage of their local or regional communities. Feingold stressed the urgency in which funding for quality journalism is necessary in America’s current political climate.

“We are in a moment of enormous crisis, not just with journalism, but with threats to democracy, inequality — fundamental issues that journalists write about,” Feingold said. “It would be a huge mistake for philanthropy to pull back their funding. If anything, philanthropy should seriously be considering bigger investments.”

The Institute for Nonprofit News, for example, has fostered the growth of nearly 450 independent, nonpartisan news organizations with the goal of ensuring that trusted news sources can be found in communities around America. If those publications lose grant funds, the consequences could be equally disastrous for local areas as for the newsrooms themselves.

With nonprofit organizations like Capital & Main, the priority remains to be as robust and dynamic as possible in order to mitigate the risk of losing funding. The publication is mission driven — specifically geared toward investigating economic inequality and climate change. Even with these parameters, C&M produces reporting with both local and national draw, often co-publishing or collaborating with news organizations around the U.S.

Editorial independence is arguably the largest differentiator between for-profit and nonprofit media. As opposed to its counterparts, C&M and similar nonprofits can pursue stories they are dedicated to and passionate about, insulated from the pressure that for-profit newsrooms often receive from management to increase engagement.

“In the nonprofit model, your revenue isn’t entirely dependent on how many clicks you get for a story — that’s important,” Feingold said. “We’ve had stories that had a relatively small audience, but the people who read those stories were decision makers, and they resulted in concrete change.”

There is a sentiment that the nonprofit space enables a more pure form of journalism where the work is primarily fueled by passion for a distinct mission. This idea has made the sector one of the most desirable locations for experienced and dedicated writers and reporters.

“As news organizations like the LA Times and others continue to hemorrhage staff, we are a destination that I think a lot of journalists are looking to,” Feingold said. “We’re a mission-driven news organization, so a lot of journalists are drawn to that — they know that we’re doing this because we are passionate about the journalism and issues we write about.”