On the Media: Is a not-for-profit news website in the cards for L.A.?

I’ve been wondering for a couple of years whether someone would bring Los Angeles the kind of not-for-profit news website that has popped up in cities like San Diego, San Francisco, Minneapolis, Austin and Chicago.

That day may be drawing closer, as venture capitalist and former newspaper executive Tom Unterman has been quietly exploring the formation of such an organization to focus on public policy issues.

Unterman has been quietly discussing the idea with a handful of community leaders around Los Angeles on and off for at least a year, with his deliberations picking up momentum of late. He still doesn’t have a formal plan or the partners he would seek to launch the site, but told me he expects to decide this spring whether to go ahead.

“A good, smart, nonprofit journalism effort could be a very nice complementary piece to the media picture here in L.A.,” said Unterman, former chief financial officer for Times Mirror Co., which published the Los Angeles Times before it was bought by the Tribune Co. in 2000. “Particularly if it focused on investigative work and filled a gap in the kind of stories that for-profit media can’t persistently fill now because of changes in the economics of the news business.”

While “very hopeful” about making the site a reality, the founder of the Santa Monica-based investment firm Rustic Canyon Partners said the key would be coming up with a plan to sustain such a venture beyond the startup phase — which he estimated would last three years and cost $10 million.

While reserving judgment on the many particulars that remain unclear, I can’t think of any substantial reason not to root for the opening of another news outlet in our region. Yes, it would bring more competition for stories and perhaps for journalists. But there are plenty of good unemployed scribes raring to get back at it, and more being minted every day.

Journalists should operate from the assumption that more information — as long as it’s thoughtfully collected and delivered — is better. Most of the cities that have been home to nonprofit news ventures over the last half-dozen years have seen a nice flowering of stories and competition. In most of those cities, the operators will concede they don’t have the size to do a lot of the daily coverage established news outlets still provide.

Why Los Angeles? Why now? Because the city has been no exception to the national phenomenon of shrinking staffs at all kinds of news outfits. Newspapers, TV and radio have all cut back as advertising has migrated to the Web. Though traditional news operations all have their Internet components, the chronically low rates for online ads can’t support large staffs of reporters, photographers and editors.

I’ve written before about the shrinking ranks of journalists covering Los Angeles County government and other important institutions. The enormous county bureaucracy is larger than that of most states. It oversees beaches, health clinics, welfare offices, children’s foster homes and much more. Yet the whole megillah routinely gets covered by just two or three reporters.

So here’s a vote, in principle, for anyone who wants to start a news outlet to add to the conversation.

When I called Unterman and told him a couple of sources had tipped me off about his initiative, he initially didn’t want to talk about it, saying the idea was not fully formed. But he agreed to fill in a few details.

Rather than competing with The Times, Unterman suggested the nonprofit might work cooperatively with the newspaper — contributing its investigative pieces and “co-publishing” stories. He confirmed what I had heard: that Jim Newton, editor at large of the opinion pages of the L.A. Times and op-ed columnist, has been a “sounding board” for some of his ideas. Newton and Unterman are friends and the Times journalist sat in as Unterman gave initial outlines of his concept to a couple of community leaders.

“I think there is a lot of interest in exploring ways to do different kinds of journalism in L.A.,” Newton said, “and my belief is that it would be best to do it in some form of cooperation with The Times.”

Besides The Times, other potential partner organizations could emerge. Initial feelers were extended to USC’s Annenberg School for Communication & Journalism about a year ago. (In San Francisco, the Bay Citizen nonprofit news site has teamed with the Graduate School of Journalism at UC Berkeley.)

The New York Times has instigated partnerships with the Bay Citizen and with the Texas Tribune, a nonprofit news site in Austin. The New York paper has been looking for nonprofit partners to help beef up its coverage of Los Angeles.

Many challenges await anyone who wants to join the news party. Finding the money ranks as the first and most crucial. Unterman said he imagines gathering a group of initial investors to put up the $10 million in startup money, with foundations, corporate donors and individual members sustaining the operation for the long run.

That’s how it’s worked out at one of the earliest and most successful nonprofit news sites, Voice of San Diego. The site has become an admirable asset over the last six years — exposing troubled redevelopment agencies, problem schools and exaggerations about the level of public safety in San Diego.

Voice of San Diego’s success has allowed it to attract public attention and form a partnership that puts its stories on a local TV news station. That in turn has drawn more contributions from a variety of sources, so the businessmen who founded the website now contribute less of the total budget.

Unterman said his research has shown that the returns on fundraising appeals tend to be significantly lower than he initially had believed — making the challenge difficult. He also said he wants to be sure that the founding sponsors are numerous, and diverse enough that no one contributor appears to be in a position to bias the coverage.

He expects the outfit would field about a dozen reporters and have a total staff of 20. Subjects for coverage could include education, healthcare and the environment — but Unterman said he wouldn’t want to presuppose what smart reporters and editors would come up with.

Los Angeles is different than some of the other cities where new nonprofits sprang up. The community is more populous and vast. And The Times, by far the largest news organization, remains a substantial presence, despite staff reductions from its peak.

Geneva Overholser, director of USC Annenberg’s School of Journalism, said the “continued strength” of The Times was likely one reason a news nonprofit hasn’t yet come to L.A., along with the “intricacies of doing justice to this sprawling area, with so many communities,” she said, adding: “That would be daunting to anyone wanting to launch a startup.”

Unterman, 66, is no stranger to the news business in Los Angeles. He served as chief financial officer of the old Times Mirror Co. Later, as representative of The Times’ founding family, the Chandlers, he helped engineer the sale to Tribune, walking away with a reported $2-million advisory fee for his trouble, plus whatever gain he may have realized as a Times Mirror shareholder.

His involvement alienated many who work — or worked — here, as the merger shifted ownership out of town and cost many corporate employees their jobs.

When I raised those differences, the venture capitalist said he doesn’t want “to re-litigate the past,” and that his current interest in journalism has no relation to the 11-year-old Times sale. “I am trying to do a good thing and I think for good reasons,” he said.

“I am trying to catalyze this thing and get it working,” Unterman concluded. “I don’t want to run it.”

james.rainey@latimes.com

Twitter: latimesrainey