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Media Fri Sep 11 2009

Chi-Town Daily News Dies, New Venture Rises from the Ashes

ctdn_mast.jpgChi-Town Daily News, one of the first and more prominent efforts to create a citizen journalism-driven online newspaper, has laid off its entire staff, effective yesterday.

One of the laid off writers, Peter Sachs, who also writes for A.V. Club Chicago, told that publication that "Geoff told us Wednesday that we were out of money, and that was it," and that the staff would not be compensated for their time in the most recent pay period. That's an unfortunate outcome, but if the organization is out of money, the Daily News had no choice.

While the Chi-Town Daily News is essentially down, it's not out quite yet, and what began there is actually evolving into something new. Here is part of a statement from Editor-in-Chief Geoff Dougherty today:

The editorial team at the Daily News is moving on to launch a new, for-profit local news venture.

Over the past four years, the staff, volunteers and supporters of Chi-Town Daily News have built an impressive thing -- a new kind of news organization that works aggressively to hold public officials accountable to voters and empowers members of long-ignored communities to tell their neighborhood's stories.


We've concluded that, as a nonprofit, we cannot raise the money we need to build a truly robust local news organization that provides comprehensive local coverage.


So, after much soul-searching, we've decided to turn our efforts toward a business model that will support the kind of vibrant public affairs coverage that Chicago deserves. Ultimately, we believe we will be able to fulfill the same mission we set out to accomplish with the Daily News, though with a different business structure and a slightly different approach.

Dougherty said that the organization has some angel funding lined up and hopes to have the new venture up and running in about a month. This is a bold change for Dougherty, who has long been a champion of the nonprofit journalism model. This reversal will have major repercussions for that movement.

The Chi-Town Daily News site will continue to be updated with articles by volunteer citizen journalists, as well as with with content from Loyola University's City News reporting class.

When asked about the staff layoffs, Dougherty replied in email, "We did lay people off, though we expect they'll resume similar jobs at the new company shortly -- we hope within four weeks or so. The layoffs were necessary because we're not ready to launch the new product." And since the new venture will constitute a new corporate structure, anyone being kept on board was going to "lose" their Daily News jobs anyway, and be "hired" by the new company.

Dougherty noted that not everyone will be making the leap. "While we expect to be better-funded than Chi-Town, we're not so flush that we can pay folks when we don't have a product to support their work." It also remains to be seen how many staffers, burned by the Daily News' implosion, will even be interested.

"I can't speak for any of the other staff, but I'm not thrilled with the way this was handled, and that's going to impact whether I choose to stay on," said Frank Edwards, former community organizer for Chi-Town Daily News. "The volunteer program's future, though Geoff has some ideas about how to save it, is incredibly unclear. Geoff has offered me a position with this new venture, but at this point, have no idea whether I would be on board with this new for-profit venture. ... Geoff understands well that the volunteer program would have no place in this for-profit venture, and as such, I'm not likely to continue working with him. Again, if an independent outside organization wants to take over the program, as he suggests they do, I'd seriously consider running it."

"Personally, I'm pretty disappointed," Edwards continued. "I wish we'd known about this sooner, I wish we had more details. I've put a lot of work into this organization, and have built the volunteer program from the ground up, and would hate to see it just vanish. We found out about this on Wednesday, so it's still pretty fresh. I wish we'd had more time to digest this and prepare for unemployment."

Dougherty said the new site will be "explicitly targeted at public affairs. It's a direction we were moving in with Chi-Town, but it'll be a more fully realized entry into that niche." That puts it whatever comes next in direct competition with existing The Chicago Reporter and Catalyst, both owned by the Community Renewal Society. Time will tell how this new site will differ from those award-winning publications -- and whether Dougherty can pull off yet another evolution in online media.

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Geoff Dougherty / September 11, 2009 3:15 PM

Just to be clear: We anticipate everyone at Chi-Town will have a job at the new venture. But the new venture's not up and running right now, and until we get closer to that point, we can't bring people on payroll.

Kate / September 11, 2009 3:24 PM

You have funding for a new venture and you can't pay your employees for their work over the past pay period? For shame, Mr. Dougherty. Hope someone calls Arise Chicago and you end up with a bunch of clergy on your doorstep at the new place. Wage theft is wage theft no matter how noble the cause.

Andrew Huff / September 11, 2009 3:27 PM

Updated the story with comment from Frank Edwards, former community organizer for the Daily News.

Thanks for the clarification, Geoff.

Kate, while this isn't the ideal situation, this isn't "wage theft." The new venture could certainly make a donation to the Daily News, which could be used for payroll, but as a new entity it can't pay those staffers itself.

Kate / September 11, 2009 3:41 PM

Andrew--then why weren't workers laid off a week ago, when they could have been paid for all their work? Did Geoff notice that recently that coffers were getting a tad low?

Mike Doyle / September 11, 2009 3:41 PM

Great coverage, Andrew! I really wish a happy outcome for everyone involved. I just hate watching our community suffer through turbulence like this.

Andrew Huff / September 11, 2009 3:51 PM

Kate, it's possible Geoff was banking on a grant that didn't come through. It's difficult from the outside to say what the circumstances were.

Steve Walsh / September 11, 2009 4:04 PM

I collaborated with Geoff at our station. He’s a true believer. I wish him and his former staffers all the luck in the world. I miss the Chitown Daily News already. In a very short time, they made themselves a must-read. Get back on your feet as soon as you can.

Fernando Diaz / September 11, 2009 4:25 PM

Kate, you make excellent points. You don't wake up one day and realize you're broke.

Craig Kanalley / September 11, 2009 4:28 PM

Reading this, I feel very badly for those who were laid off -- Peter is such a great worker and didn't deserve this. But I especially feel badly for Frank Edwards.

No one is a better community organizer and there are few I've ever encountered who work as hard as Frank. He was there through thick and thin putting in time -- and overtime -- to make the Chi-Town Daily News tick. Without him, there is no Chi-Town Daily News and I firmly believe that.

As a former intern at Chi-Town Daily News, I saw the important role he had in this organization and it's sad to hear he's disappointed and he had to be treated this way after his devout public service.

This shows that not even a non-profit can be loyal to those who work hard and give them the rewards (and respect) they deserve. Frank did so much behind the scenes and volunteer work -- it didn't go unnoticed here.

I wish Geoff the best of luck as he reorganizes and starts his new venture.

Daniel Honigman / September 11, 2009 5:02 PM

I look forward to seeing what Geoff has in store for CTDN -- or whatever it will be called -- in its next phase!

Peter Zelchenko / September 11, 2009 7:42 PM

Kate, let's wait to see what Geoff has to say about this. He's a smart guy and I'm sure he has a reasonable explanation and perhaps even a solution. Keep in mind that the work he does is not making him rich, and your group has been doing things we've never seen before on a very limited budget, which means he himself must be overextended. This isn't one of those multimillion-dollar parachutes.

LaShawn Williams / September 11, 2009 10:48 PM


Geoff Dougherty / September 12, 2009 1:07 PM

While I agree that it would have been great to give everyone involved 30 days notice, this was a unique situation, and things played out the way they did for a reason.

Up until last weekend, I was working nonstop to make sure Chi-Town could continue operating as a nonprofit.

We'd secured some loans that would have gotten us through to our next grant.

But the more I thought about it, the more that seemed like a bad idea -- running (or working for) a news organization that is constantly lurching from grant to grant is no way to go through life.

So over the last several days, I identified a for-profit business model that will allow us to do the reporting that we believe is so important.

I had some promising conversations with investors, and after talking with our board, determined that was the best way to proceed.

I notified our staff almost immediately after we'd made that determination.

I expect that our staff will ultimately come out of this with more money, and some stock options, once they join the new company.

It's a better thing for everyone involved, but it'll be a stressful time until we have the new venture up and running.

In a perfect world, I would have made these decisions months ago, lined up the investors and had a seamless transition from the old company to the new one.

But I was wholly committed to making the nonprofit model work for us. I couldn't pull the plug on it until it became painfully obvious that it wasn't an effective way to do business for us.

Geoff Dougherty / September 12, 2009 1:17 PM

I should also add that yes, we were banking on some grants that did not materialize.

And we can't use money from the new venture to pay Chi-Town salaries, just as we can't use grant money raised at Chi-Town to fund a new for-profit venture.

Again, we expect that our employees will be made whole, and in fairly short order.

justin massa / September 12, 2009 10:29 PM

I'd love to hear more about why completely abandoning the non-profit and starting anew was the only or best option. There are tons of hybrid for-profit, not-for-profit entities out there and lots of successful models. If the challenge was that the NFP would make too much money from non program-related sources (i.e. advertising), then why not start a for-profit wholly owned by the CTDN that would operate the website and continue the non-profit as the hub for volunteer reporting? It's not like others haven't done the same, with great success (i.e. Mozilla).

AC / September 14, 2009 10:54 AM

Geoff, pay these reporters and staff people.

Please, for all of our sakes, do not make one more comment about your new venture before you set your old one straight.

There is no reason for an investor, the public, or any potential employee to trust you with this still hanging in the balance.

It is shocking to me that you repeatedly try to shift the focus from the problems of CTDN to your hopes for the new venture. I'm sure that in your days as a journalist you learned quickly the ways that is done, and you've carried that sense over to- I'm sorry, what exactly is it that you do now?-

You tried something big with CTDN, congratulations. It didn't go as you planned, it happens. You had employees, I'm sure, that would follow you off a cliff. Now you're there. Don't instruct them jump because you say you've got a plan. Why do they have any reason to trust you?

Thomas Westgard / September 14, 2009 6:27 PM

Anyone who was working for an hourly wage who does not get paid within two weeks should immediately go to the Illinois Department of Labor in the State of Illinois Building (aka the Thompson Center).

They assist workers in this scenario. A fillable form is here:

Daniel Honigman / August 16, 2010 3:07 PM

Wonder if there have been any updates on this. Andrew: Any word?

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Architecture Tue Nov 03 2015

Paul Goldberger Describes the "Pragmatism and Poetry" of Frank Gehry's Architecture in His New Book

By Nancy Bishop

Architecture critic Paul Goldberger talks about Frank Gehry's life and work in a new book.
Read this feature »

Steve at the Movies Fri Jan 01 2016

Best Feature Films & Documentaries of 2015

By Steve Prokopy

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