Explaining the Mysterious Funding for the Colorado Sun

In June, editor Larry Ryckman, center, and other members of the Colorado Sun staff announced the operation's launch in the shadow of the old Denver Post building.
In June, editor Larry Ryckman, center, and other members of the Colorado Sun staff announced the operation's launch in the shadow of the old Denver Post building. Photo by Michael Roberts
Just four weeks after its launch, the Colorado Sun, an online news agency staffed by former members of the Denver Post, has already established itself as a highly credible operation, cranking out an impressive amount of solid reporting daily.

However, few people understand the blockchain mechanisms being deployed by Civil, the ambitious organization backing it, and updates about the sale of CVL tokens, a new cryptocurrency, suggest that things aren't going well.

Joshua Benton, director of Harvard University's Nieman Journalism Lab, tweeted twice about Civil last month. On September 20, he wrote: "As of right now, roughly $1.25 million has been spent on @Join_Civil CVL tokens. Of that, about $1.16 million — 93% of the total — has been bought by a single man/woman/child/company/thing. So curious who that is!" Three days later, on September 23, he added, "For the @Join_Civil token sale to happen, it needs to sell another $6.84 mil in CVL by 10/15, or about $306,000 a day. In the past 24 hours, it's sold only about $1,700. Without more whales dropping big sums, it's going to be really hard to pull off."

To get a better sense of what's going on, we reached out to Matt Coolidge, Civil's co-founder and head of marketing. In the following Q&A, conducted via email, Coolidge didn't answer all of our questions. For instance, he maintained that Benton's figures are inaccurate, but declined to provide the details — although he promised that they're coming soon. But what he did share provides a much clearer picture of what Civil is and how the firm hopes to accomplish its journalistic goals.

Get a high-tech education below.

The placeholder image that greeted folks who clicked on the Colorado Sun website before its official launch.
Westword: As you know all too well, plenty of folks still don't understand how blockchain works. Is there a brief way to describe it that you found helps people better grasp the concept?

Matt Coolidge: At its core, the blockchain is a distributed ledger that logs transactional data. A large group of individuals stores this info simultaneously across tens of thousands of independent computers around the world and sees this info updated in real time as new "blocks" of transactions are added to the existing chain of information. Think of it like a giant, shared Google Spreadsheet — only if Google were not in control, and no single party controlled the "kill switch." The only way to alter info on this meta-Google Spreadsheet would be for 50 percent-plus of the community to vote to do so, and only because they saw a critically important reason to do so.

What's truly unique here is the idea of "immutability." Once data ("party X paid party Y an amount of Z," "party X uploaded piece of content Y at time Z," etc.) is committed to the blockchain, it's nearly impossible to alter the record. Again, overwriting any info on the blockchain requires more than 50 percent of these independent individuals — most of whom have no idea who their counterparts are, which makes collusion nearly impossible — to vote to make a change, a process known as "forking."

How many publications are currently part of the Civil network and are currently up and running, as is the Colorado Sun? What are they? Are other publications about to come online? If so, how many? Do you have a target for the number you'd like to have overall? Or would you prefer to let the network evolve organically?

Currently, there are fourteen newsrooms running on Civil (you can see all of them here). Thirteen are already publishing, and the fourteenth, The River (a local news outlet covering the Hudson Valley region of New York state), will begin publishing next week.

And your question is quite timely. We've just announced an additional four newsrooms that will run on Civil. Unlike the fourteen above, three of these are existing newsrooms that will port their operations over to the Civil protocol. Nothing will change about their editorial mission or business model (though they will be able to access Civil's suite of publishing and revenue management tools — including the ability to accept cryptocurrency payments — and will be more incentivized to collaborate and cross-publish with other Civil newsrooms).

A photo tweeted by the Colorado Sun in advance of the publication's online debut.
Here's a quick overview of each:

14ymedio (Havana/Madrid/Miami). Covers Cuban affairs and Cuban-linked international topics, from a Cuban point of view. 14ymedio is the only independent newsroom inside Cuba. In addition to its Cuba-based staff, it maintains smaller editorial teams in both Madrid and Miami. It takes no government funding, nor funding from any organizations tied to a specific political party. Via Civil, it hopes to raise additional funding to hire needed staff to expand its operations and ability to cover more important, under-reported stories.

Dromómanos (Mexico City). Focuses on issues across Latin America (and plans to expand beyond this base soon). Traditionally, it has focused on violence, drug trafficking and drug policy, as well as other social aspects such as migration, poverty and inequality. Its "Narcoamérica" investigation series focused on drug trafficking in eighteen countries, from the U.S. to Chile. It was recognized with several journalistic awards, including the Ortega y Gasset and National Journalism Award in Mexico. Its team is currently working on a similar project, "In the Wrong Path," about homicide in the seven most violent countries in Latin America.

The Blackness (Los Angeles/New York City). Coming in late 2018, The Blackness will be a multimedia, long-form, investigative reporting newsroom, focused on shining light on overlooked and untold human interest stories impacting communities of color. The Blackness will leverage a distributed network of diverse journalists. Will be run by Color Farm Media.

The GroundTruth Project (Boston). In-depth, collaborative reporting from around the world on social-justice issues including human rights, climate change, global health and religion. It's focused on supporting the next generation of reporters with professional guidance, mentorship and opportunity. GroundTruth looks for people and stories that others aren’t covering — often focused on marginalized communities, immigrants, women and children, and emphasizing the voices of people caught in unequal systems of power.

The biggest change, which will occur on October 22, when Civil's platform launches publicly, is that they will appear on the Civil Registry, the community-curated whitelist of newsrooms producing ethical journalism. The launch of the Civil Registry, which will occur right after the conclusion of Civil's token sale (CVL tokens = voting stakes on the Civil network — they can also be used to pay newsrooms, as well as launch or sponsor new newsrooms), is effectively Civil's general launch. When it's live, it will be possible for any interested party to apply to launch a newsroom on Civil.

While we haven't committed to a firm projection, I'll say that we've received early interest from nearly 600 prospective newsrooms. Given that, I feel comfortable projecting that we'll have close to 100 newsrooms running on Civil by the end of this year.

click to enlarge
Matt Coolidge is Civil's co-founder and head of marketing.
How would you describe the Civil Registry?

Being listed on the Civil Registry is predicated on a newsroom's commitment to adhering to the ethical journalism principles outlined in the Civil Constitution. We aren't remotely trying to reinvent the wheel regarding journalistic ethics. This doc was drafted and will be overseen by the Civil Foundation, which includes my colleague Vivian Schiller, the former CEO of NPR, as well as Emily Bell (Tow Center), Sue Gardner (former exec director at the Wikimedia Foundation), Toyosi Ogunseye (head of West Africa for BBC). You can see a full roster for the Civil Foundation here.

What we are trying to reinvent is how newsrooms — and readers — are incentivized to adhere to journalistic ethics in an open, transparent manner. Civil itself is a platform for connecting readers and journalists at scale. All activity in the network is based on an adherence to the Constitution — and newsrooms who seriously violate its terms (e.g., committing plagiarism, knowingly promoting mis/disinformation as fact, promoting hate speech) can be "challenged" by anybody in the Civil community, and potentially be de-listed from the Civil Registry if more than 50 percent of the community agrees, via a popular vote, that the constitutional violation in question did occur.

The end result, we hope, is an active marketplace of independently owned and operated newsrooms who have a reputation for producing high-quality journalism (think: the opposite of the experience most folks have on Facebook today, where it's easy to "discover" new journalism, but nearly impossible to parse fact from fiction). And, because it's decentralized (e.g., nobody — not even the Civil Media Company — is in total control), all policy/governance changes must be ratified by the larger community. The idea here is that, like Facebook/Twitter/YouTube, Civil can become a popular platform for creating/sharing/distributing/supporting journalism...but unlike those big three, Civil will not ever enforce sudden, unexpected policy changes that can negatively impact how journalists work there. Any such changes would require consensus from more than 50 percent of the Civil community — and if a change felt truly unethical, anybody in the community could appeal it to the aforementioned Civil Council (part of the Civil Foundation), who have the technical authority to overturn such decisions if they're not in the spirit of the ethical journalism principles outlined in the Civil Constitution.

How much seed money has Civil given to the Colorado Sun? Is that amount a one-time investment? Or do you expect to provide more funding to the Colorado Sun over time?

We don't disclose the specific grant totals we've provided to each of the initial newsrooms, but suffice it to say, each one is satisfied with the terms — and confident it will provide them adequate runway to build up their respective operations and get to a sustainable place. ... The Colorado Sun is certainly pursuing a number of revenue strategies beyond the initial Civil grant. My understanding is they're quite comfortable and confident with their plans on this front.

Civil CEO Matthew Iles was in Denver for the Colorado Sun's debut press conference.
Photo by Michael Roberts
Joshua Benton has written on Twitter that roughly $1.25 million has been spent on CVL tokens at the time of his message, with 93 percent of it, or $1.16 million, coming from one person. Are those numbers accurate? If not, could you provide updated figures? Also, can you identify the largest donor? Is it Craigslist founder Craig Newmark, as has been rumored?

Those numbers aren't accurate, as they don't include contributions we've received via a new, streamlined process for buying CVL tokens we launched on our own site last week. On Tuesday [October 9], we'll be publishing a comprehensive transparency report on the sale's performance thus far, which will address all of your questions here.

Benton also says that for the token sale to happen, Civil needs to sell another $6.84 million in CVL by October 15, which he estimates at $306,000 per day — and that in a recent day, only about $1,700 worth were sold. Are those numbers and dates accurate? If not, what are the accurate numbers and dates? If a certain amount isn't sold by October 15, what happens? Anything?

Again, I'd refer you to my previous response regarding the transparency report. I don't mean to be cagey here, but we are working hard behind the scenes to ensure that what we publish is extremely in-depth. But I will say this: We are fully on track to conclude the token sale on the 15th, and to launch Civil publicly at the end of this month as planned.
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Michael Roberts has written for Westword since October 1990, serving stints as music editor and media columnist. He currently covers everything from breaking news and politics to sports and stories that defy categorization.
Contact: Michael Roberts