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Salt Lake Tribune gets IRS approval to convert to nonprofit

This April 20, 2016, file photo shows the Salt Lake Tribune in Salt Lake City. The Salt Lake Tribune says it has received approval from the IRS to convert into a nonprofit as the newspaper switches to a nontraditional model that it hopes will ensure long-term stability after years of financial struggles fueled by declines in advertising and circulation revenues. (Rick Bowmer / AP)
By Brady Mccombs Associated Press

SALT LAKE CITY – The Salt Lake Tribune hopes its new status as a nonprofit will ensure its long-term viability in an industry in crisis – and other newspapers suffering amid the same declines in advertising and circulation revenues are expected to be watching closely.

The newspaper will be governed by a board of directors and rely on donations under a plan the Tribune said Monday has been approved by the IRS six months after the Utah news outlet made the request. The newspaper will maintain editorial independence and enact a strict firewall between reporters and donors to prevent influence or sway, just as newspapers have long done with advertisers, owner and publisher Paul Huntsman said in a news release.

One difference, though, is the Tribune editorial board will no longer make candidate endorsements.

The plan is similar to arrangements at the Philadelphia Inquirer and Tampa Bay Times, which are owned by nonprofit foundations. The Tribune’s arrangement is different and noteworthy because the newspaper itself becomes a nonprofit.

In many ways, it’s similar to the model that National Public Radio and PBS have used for a long time, said Alberto Ibarguen, president of the Knight Foundation, which supports journalism and has pledged $250,000 to the Tribune.

Now that the IRS has made the precedent-setting decision, the nontraditional model could be followed by a number of other news outlets around the country that are exploring ways to survive, Ibarguen said.

“The beauty of this is the recognition by the IRS of news as a value that deserves tax exemption,” Ibarguen said. “The ability for a local news organization to add a revenue stream is enormously important at a time when so many other news organizations are dying on the vine. They are shriveling.”

The Salt Lake Tribune plays an important role in the state as the largest independent news outlet. The other large newspaper in the state, the Deseret News, is owned by The Church of Jesus Christ of Latter-day Saints, widely known as the Mormon church. The majority of the state’s lawmakers and about two-thirds of the state’s residents are members of the faith.

Huntsman purchased the newspaper in 2016, leading to a period of increased stability after the newspaper had dealt with staff reductions and feared closure under the previous owner. The newspaper won a Pulitzer Prize in 2017 for a series of stories about church-owned Brigham Young University’s practice of opening honor code investigations into students who reported they were victims of sexual assault.

But financial hardships endured, and one-third of the staff was laid off in 2018. That was the fourth round of layoffs since 2011 at the Tribune, which now has a staff of about 60, down from 148 in 2011, according to the newspaper’s story about the announcement.

“The current business model for local newspapers is broken and beyond repair,” Huntsman said in a statement. “We needed to find a way to sustain this vital community institution well beyond my ownership, and nonprofit status will help us do that.”

Huntsman is the of son of the late Jon Huntsman Sr., a wealthy industrialist who was the patriarch of one of the most influential families in Utah, and brother of former Russia Ambassador Jon Huntsman Jr. The Huntsman family runs a major cancer research center in Utah, and their name adorns university arenas and college programs. On Monday, the family announced it was donating $150 million to create a mental health institute for research and care at the University of Utah.

Paul Huntsman will be the chair of the board of directors for the Salt Lake Tribune, with other members selected in the future, according to information on the newspaper’s webpage up already for tax-deductible donations that features a section of frequently asked questions.