A First Look at NewCo's Business, Journalism Structure

First, the official release:

PIERRE OMIDYAR PROVIDES INITIAL FUNDING OF $50M TO ESTABLISH FIRST LOOK MEDIA

Honolulu - Dec. 19, 2013 - The news organization created by Pierre Omidyar (formerly dubbed "NewCo") has taken another step forward with an infusion of $50M in capital to fuel operations being established on both coasts.

Omidyar, who provided the funding, will also serve as the organization's publisher. Omidyar's first capital outlay represents 20 percent of his initial commitment to the media venture. First Look Media will publish robust coverage of politics, government, sports, entertainment and lifestyle, arts and culture, business, technology, and investigative news.

"This initial capital is the first step of many to bring the vision of this news organization to life," said Omidyar. "I am deeply committed to the long-term effort to build a new and exciting platform for journalism -- one that not only provides the innovation and infrastructure journalists need to do their best work, but that brings their reporting and storytelling to the widest possible audience."

First Look Media is made up of several entities, including a company established to develop new media technology and a separate nonprofit journalism organization. The journalism operation, which will be incorporated as a 501(c)(3), will enjoy editorial independence, and any profits eventually earned by the technology company are committed to support First Look's mission of independent journalism. The name of First Look Media's initial digital publication is yet to be announced.

First Look Media is currently securing space and setting up operations in New York City, San Francisco, and Washington, D.C. The team is actively recruiting in all areas of its operations.

As I previously explained to readers of PressThink, I am an adviser to Omidyar's company, so I can provide some further explanation and a view of what this announcement says.

1. The placeholder name, NewCo, is going away. First Look Media is the name of the new company. It has by the terms of today's announcement received an initial capital infusion of $50 million from Pierre Omidyar.

2. The new company will consist of several legal entities. One is a technology company, a business run for profit, that will develop new media tools for First Look properties and other markets. Another is a 501(c)(3), a non-profit under U.S. law. Its mission will be to publish and support independent, public interest journalism.

3. The 501(c)(3) will house the journalism operation, which hasn't given a name yet to its initial publication. It will have editorial independence.

4. Profits earned by the technology company will be used to support the mission: independent public interest journalism.

So that's what the announcement says. Now I am going to provide some of my own observations that I hope will be helpful for those who are following news of the company formerly known as NewCo. This isn't the company's description, it's mine.

5. As we figure out what the pieces of the company will be, we are announcing them. Today's news settles one of the questions I have been asked a lot: "Is NewCo going to be a business or a non-profit?" Answer: both. The news and editorial operation will be a non-profit. The technology company will be a business run for profit. If the tech company is successful it can help fund the journalism mission, along with other possible sources of revenue.

6. There are other known combinations of business and non-profit in journalism land. The Poynter Institute is a non-profit school for journalists that owns a controlling interest in the Times Publishing Company, which publishes the Tampa Bay Times. The Guardian Media Group is a for-profit company in the UK that is owned by the Scott Trust, which exists solely to guarantee the independence and public service mission of the Guardian, in all of its forms. ProPublica is a non-profit investigative newsroom, donor supported, that sometimes shares its work with for-profit newspapers.

7. The First Look set-up is different. Here the journalism operation is a non-profit, housed within a parent company, which may have other entities inside it. The entire operation is designed to support the mission of independent public service journalism, achieve sustainability and attract talent.

8. Another way to say it is: public service, mission-driven journalism, including investigative work, has always been subsidized by something: advertising, other kinds of news, donors to a non-profit (as with ProPublica) or a related and profitable business like the Bloomberg terminals that subsidize Bloomberg News. First Look Media is adding to the picture another possible source of support: profits from a company specifically focused on technology for producing, distributing and consuming news, views and information.

9. A good comparison point for that relationship is a company like the Atavist, which produces narrative non-fiction -- also called long form journalism -- and hopes to profit from a publishing platform, the Creativist, originally developed to publish the Atavist's own work. Notice I said a "comparison point," not: these two are the same.