After taking over in September 2022 from Bill Johnson, the company's founder and CEO for the last 42 years, my top priority has been to chart a course for the company that would ensure our survival for decades to come. The company has been navigating the changes afflicting the local news industry for many years and it was clear that we needed to move aggressively to become less reliant on our print advertising revenue in this post pandemic environment.
It's been a rollercoaster ride, shifting more resources towards our digital products, restructuring our management organization and learning how to support our team who gets the news out every day. It has become increasingly clear this year that to maintain our future viability, we need to update our business model. As of Jan. 1, 2024 all of our publications will be operated by the Embarcadero Media Foundation, a 501(c)(3) tax exempt organization
Why is this necessary? There are two main reasons. First, with all of the headwinds that we and other local news publishers across the country are facing, we need to shift our business model to rely more directly on donations from our communities. Second, operating as a nonprofit will enable us to grow and evolve our journalism in exciting ways that can provide greater benefit to the community.
The headwinds we're experiencing as a business have been dramatic. Over 75% of our revenue still comes from advertising and starting with the pandemic in 2020, many local businesses that advertised with us have closed. In particular, since 2019 we’ve experienced a 45% erosion of real estate advertising, our largest advertising category. We see that relying too heavily on advertising going forward could lead to our downfall, which has happened to so many other local news publishers.
An unflinching look at our bottom line is sobering. Across our three newspapers and special publications, we've seen our print ads revenue decline by more than 42% since the end of 2019. Revenue across our entire operation, including print, our seven news websites and three newsletters, has declined by 32%. Were it not for the federal government and two rounds of funding from the Paycheck Protection Program and the Employee Retention Tax Credit, our company would have failed and local news in our communities would be gone.
We have not sat idly through this decline. We have built up a significant new revenue stream around subscriptions. This year we're expecting to top $900K in revenue, which will cover about 18% of our 2024 budget. While we had a huge surge in paid membership during the pandemic, we are struggling to bring on more new members to replace those that leave us. We continue to find and invest in new ways to bring on new members, but it's a tough row to hoe. Media organizations everywhere are seeing declines in subscribers. We're actually doing pretty well compared to the industry.
We've also been willing to make hard choices. Over this year, we made cuts to management and administrative expenses, including reducing our office space to adapt to the number of employees who are working remotely, that will collectively reduce our annual operating expenses by more than $900K. We made these changes without any reduction to our investment in our editorial team. But we still need to change our business model to meet our remaining deficit, prepare for further declines in advertising and invest in new technology and our editorial department.
Converting to a nonprofit will allow us to rely more on the giving capacity of our communities. Our target is to raise $3M over the next three years, with $1M of that coming in 2024. We’re already off to a fast start with pledges totalling about $200K from several incredibly generous individuals who are offering gifts as large as $100K.
This new philanthropic funding will diversify our revenue and give us greater stability to aggressively pursue our journalistic mission. We are so proud of the work that DanvilleSanRamon.com have done in the last year to make our community more informed, accountable and cohesive:
* Over 2,800 stories published
* Over 380 stories about Tri-Valley city/town governments
* Over 500 stories about Tri-Valley schools
* Over 240 stories about the 2022 election across our network
* 149 candidate interviews for 2022 election across our network
* 18 candidate forums for 2022 election across our network
* More than $83,000 raised and distributed to locally based nonprofits in the Tri-Valley with our annual Holiday Fund.
The Foundation will be able to expand and change how we cover our communities. Being a nonprofit enables us to develop partnerships with other foundations and accept major contributions from individuals who have a passion to shed more light on a particular issue.
We know there are great beats that can make a big public impact, like expanding coverage of education, homelessness and housing, immigrants, health, transportation and the environment. We are thinking more ambitiously as well, like starting new online publications to provide news for chronically underserved communities.
Even though we've operated as a for-profit company all these decades, we have always been a mission-driven organization at our heart. What motivates our entire staff is the ability to help our communities function better. We look forward to your continued support as we make this change.
We're incredibly excited about this change and how it will allow us to partner and work more deeply with our communities. If you want to support us, the easiest way to do that is to become a member. If you have the ability to support us at a more significant level, please consider making a one-time donation to the Foundation now (it's tax deductible!). If you want to help us with a major gift such as appreciated stock or a gift from your estate, or to sponsor a project going forward, please reach out to email@example.com.
Join us in keeping the door open for local journalism in our communities.
Chief Executive Officer, Embarcadero Media