How foundation funding could be protecting a journalism pay bubble

A journalist salary bubble may still be lurking somewhere beyond the newspaper right-sizing of the past decade.

We at Technically Philly are in the process of hiring our first reporter — to begin as an independent contractor expected to make something like $30,000 in a 12-month period. That’s a respectable, entry-level salary for a young, hungry reporter in a big market.

Unless you think otherwise. A freelancer friend of mine gave me a little grief, said she had a $30,000 salary when she started in 2004, expecting the total to have gone up in the ensuing years. I tried to remind her that in the years since she started, the momentum on subscription declines and advertising reductions have accelerated, not to mention a recession that stalled, if not shrunk, salary growth.

In short, her argument seemed to redouble my confidence that our small startup, for-profit technology news site was doing alright to budget $30,000 for a young reporter who would focus on reporting, social media and outreach. Her argument did something else though. It made me think there may still be shocks left in this generation-long restructuring in news from higher-yield print monopoly to lower-yield, online competition.

Starting reporter salaries at the Philadelphia Inquirer are something in the arena of $35,000, with benefits, as I understand it. Updated: See the Guild contract details here [PDF]. That’s not great money for a storied big market newspaper brand, but the Inquirer is a union shop so, as I’ve been told, the guild has a structure not unlike you’d expect for a civil servant: steep pay increases with years in.

A business columnist there might be getting north of $130,000, if I understand correctly. It sounds like an experienced reporter for another business publication in town is making between $70,000 and $100,000. Now I’m not suggesting that reporter salaries were ever at that level on average, but I am pointing out that at most legacy brands, there is a pay structure that ties back to a big yield print world.

A friend of mine is jumping from a well-paying, newspaper-backed administration job to a social media-driven role with a big foundation-supported journalism outfit. His salary is probably somewhere in the $60,000 to $80,000 range.

That’s just my concern.

The old pay structures that can grow reporters into six figure salaries are being maintained because of culture, union and logistical concerns. The biggest new celebrated brands of our age — MinnPost, Pro Publica, Texas Tribune, San Diego Voice and the like — are backed by big donors and foundations. Without normal market forces pressed on them, it’s my understanding that they are following the same salary levels of the standard-setting newspaper brands.

I respect greatly the involvement of philanthropic organizations in journalism (of course I do, such funding has helped us do great work), but I think those efforts should be focused on projects, not operations. Projects have ends. Operations are ongoing.) As this funding without normal market pressures impacts this still unsettled industry, I am left with two related questions about reporter compensation. Is there any evidence that the market can (or should) support pay levels of the past? Could foundation funding be protecting a journalism pay bubble?

As I look at the smaller, independent niche news sites that I know well, I see two paths: (a) one is a leaner, more efficient operation that doesn’t pay its reporters the kind of levels the past has prized, and (b) the other is funded entirely by foundations or other deep pockets, and pay reporters rates that are not unlike the past.

Granted everything is cyclical, so as news fractures, I fully expect there to be consolidation once again. With consolidation, presumably comes efficiency and better paid, top talent. There are already years-old glimmers of that, with properties like Gawker Media, which has a portfolio of high traffic sites, driven by content written by bloggers paid largely based on page views. Pre-recession estimates suggested that Gawker writers were getting paid up to $80,000, which would be respectable pay for valued writers at a valued brand.

But, as anyone covering communities know, Gawker is an aberration — a niche conglomerate with big money. I don’t think that will be representative at all.

When we crunch the numbers at Technically Philly, I’m not sure we could ever support the kind of salary figures an established technology reporter for a big legacy brand would demand. And, frankly, I’m not yet sure it should.