Is outside spending good for local journalism?

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The Los Angeles Times building in Downtown Los Angeles. Photo: Wikimedia Commons

The Los Angeles Times building in Downtown Los Angeles. Photo: Wikimedia Commons
The Los Angeles Times building in Downtown Los Angeles. Photo: Wikimedia Commons

As news organizations across the country struggle to make ends meet, so-called “sponsored content” has become one of several tempting alternatives to traditional advertising, but not without drawbacks.

Recently, the Los Angeles Times became the focus of headlines for becoming the latest outlet to launch a separate side business that creates custom content for corporate clients.

As Gene Maddaus at the LA Weekly notes, the Los Angeles Times’ Content Solutions unit built a website called Powering California bankrolled by the California Resources Corporation, formerly oil giant Occidental Petroleum. The site extols the virtues of the petroleum industry in articles and video. At the same time, the LA Times newsroom was putting out an investigative report on oil company Exxon’s attempts at affecting climate science policy.

That juxtaposition is “a little awkward, or at least ironic” Maddaus told Which Way, L.A.?

“They take a certain amount of pride that their stuff is accurate, but at the end of the day it is advertising, so it’s a little bit more of a gray area than traditional newspaper advertising,” Maddaus said.

Like native advertising, this kind of public relations styled as journalism holds certain risks. Chief among the drawbacks is the potential loss of credibility, according to Kelly McBride, Poynter Institute’s vice president of academic programs. But she says that can be mitigated.

“A good news organization can convince its audience that the loyalty is still with the audience and I would expect that the LA Times would do that,” McBride says.

But sponsored content is not the only form of outside money flowing to the LA Times that has drawn scrutiny this month.

A Washington Post article put a spotlight on the LA Times for accepting $800,000 from a group of local foundations to pay for reporters covering education issues. Those foundations, including the Eli and Edythe Broad Foundation, have a stake in the very issues they’ve paid the LA Times to cover.

What’s the rub? The question is whether underwriting by civic organizations with agendas ends up influencing coverage in subtle ways. If groups contributing money for coverage don’t like the substance of the reporting, will they be eager to contribute money again?

Maddaus says outright influence of coverage is unlikely. “You have to be fair to the Times reporters and let them cover the issue and make sure the proof in terms of whether they can be neutral about it is in the reporting that they produce.”

This kind of outside money funding news organizations is not likely to go away. McBride says traditional advertising doesn’t work anymore and newspapers across the country are adopting branded content as a means of replacing dwindling traditional revenue streams.

Poynter, a Florida-based organization which offers training to journalists, is on board with sponsored content and even offers tips on how to provide readers with branded articles without compromising credibility.

“This is another way of bringing money in the door to pay for the journalism,” McBride says. “This model was kind of pioneered by NPR, so we should get that on the table.”