The Dive: Discord on the Board

Before we dive into The Dive this week (sorry, had to), we wanted to talk to you a bit about The Assembly’s business model.

You know, like how these guys pay me to bring you these tidbits each week.

This job is both a journalist’s and a reader’s dream. The Assembly operates outside of the daily onslaught of deadlines and content-creation pressures that weigh on most newsrooms. Don’t get me wrong: Those things are important. We need to know what’s happening as it happens.

Founder Kyle Villemain saw a void in our state’s news ecosystem for thoughtful, magazine-style, deeply reported pieces–the kind of stories most local newsrooms don’t have the capacity to do these days.

While our newsletters are free, our ability to keep doing deep-dive reporting relies on growing our base of readers who subscribe to receive everything we publish each month. Subscribing helps us support The Dive, our statewide missives and grants you access to all our stories.

If you haven’t already subscribed, please consider doing so. It’s just $5 a month, or $50 a year.

Below, you’ll hear from Kyle himself about how our model works, in an abridged Q&A with our product and growth director, Paige Ladisic. And below that, you’ll get all the news you came here to read.

– Johanna F. Still

Paige: How did The Assembly get its start?

Kyle: We started when I was a speechwriter at the UNC System and realized how many interesting and complicated stories were not being reported. I thought we could build something that paid good journalists good money to spend a lot of time on complicated stories. We’re now a team of 10 full-time staff, and we work with great freelancers all across the state. 

Paige: The Assembly’s funding is a mix of investments, philanthropy, subscriptions, and advertising. Why did you decide to go with this sort of model?

Kyle: I believe that journalism, if it’s done well, can be self-sufficient. That means it can be valuable enough to readers that they will pay a few dollars a month to help support it. There are many great nonprofits out there, but I don’t think there’s enough philanthropic money to hire all the journalists that this state needs. We have to figure out a way to have reader support fill that gap and build big, thriving journalistic institutions once more. 

Paige: How much does a story cost, from beginning to end? 

Kyle: A big story that takes weeks or months to report can cost as much as $5,000 to cover the reporter’s time as well as necessary resources like travel and research–the equivalent of 60 to 100 annual subscriptions.

It can take up to $1,000 for a great photography, plus another $400 for copy editors, fact checkers, and legal support. We’ve also got a team of editors working with the reporter from start to finish. And that’s just for one story! It really adds up.

Paige: How many subscribers do we really need?

Kyle: We’d like to grow to a thriving 20-25 person newsroom, which would take about 10,000 paid subscribers. 

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Patient Politics

N.C. Attorney General Josh Stein has “serious concerns” about a move New Hanover County Commissioners made Monday.

The commission voted 3-2 along party lines to appoint two new members to the New Hanover Community Endowment, the nonprofit that oversees how roughly $1.1 billion in proceeds from the county’s hospital sale gets spent. The decision bucked the endowment board’s recommendation to reappoint Hannah Gage and Virginia Adams.

Instead, they appointed two former Republican commissioners, Woody White and Patricia Kusek, whose terms expired a couple of months after they voted to sell the hospital in late 2020.

A spokesperson for Stein said Tuesday his office is “taking a closer look” at the changes to the endowment’s makeup.

Before approving the hospital transaction, Stein required the endowment to add two more seats to diversify its then-11-member board. “We also raised the importance of having a board that is representative of New Hanover County, including the county’s diversity,” the spokesperson said.

Stein’s 2021 non-objection letter noted the original board makeup was disproportionately male and lacked proportionate Hispanic representation, and cited the endowment’s bylaws requiring  “serious and deliberate consideration to the balance of gender, race, and ethnicity.” 

With Adams out, all five of the county’s appointees are white. The commission’s lone Black board member, Jonathan Barfield Jr., voted against the appointments and said it “sends the wrong message.”

Commissioners, including White and Kusek at the time, frequently cited the need to insulate the board from politicization as the chief reason it should operate privately and independently.

WHQR digs deeper: Commissioners who approved the shakeup say the party-line vote wasn’t a partisan act, and point to concerns about how the endowment has been operating.

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Pender’s Lifeline

On Monday, Pender County commissioners voted unanimously to sell Pender Medical Center to Novant Health, which has pledged to invest $50 million to improve the hospital and advance health initiatives in the county. The county will retain control of the nonprofit board that runs the hospital.

The move was expected, as hospital and county officials announced they had reached an agreement this summer just before their previous operating agreement was set to expire. Leaders shared a framework for the draft transaction then, but vital details were missing, given confidentiality concerns while the deal was still cooking. At Monday’s board meeting, new details helped fill in gaps. 

Pender County didn’t appear to have other realistic options. In recent years, leaders had at times aired their displeasure with Novant, and even took formal steps to prepare to lure proposals from competitors. But consultants shared publicly Monday what they had been privately advising the county: Pender didn’t have much to offer potential buyers or operators.

The physical assets in Burgaw were appraised at around $7 million in 2021. But Pender’s $7 million pension liability for hospital employees negates that valuation. Plus, the county was on the hook to pay back Novant between $10 and $20 million to cover historical capital improvements to the facilities. Novant (and its predecessor, New Hanover Regional Medical Center) subsidized the hospital over the years as it consistently lost money. With the new arrangement, Novant absorbs those liabilities.

Dawn Carter, the county’s health care consultant, explained buyers nowadays are reluctant to acquire unprofitable hospitals. And under a lease arrangement, operators typically want to be paid to manage a facility, not the other way around.

“For the sake of argument,” Carter pinned the hospital’s value at between $50 to $60 million for a hypothetical buyer only looking at revenue.

She told commissioners Novant’s offer was “fair, reasonable, and more typical” than what happened next door. “I will say, in my experience doing this work for the last 20 years in North Carolina, the New Hanover deal is very, very, very unusual,” she said. “It is not typical that you get a lot of cash like that.”

Notably, Novant locked in its $2 billion offer to New Hanover County in 2020. Last year, many hospitals across the state and country hemorrhaged cash, and the appetite for mergers and acquisitions waned, Carter explained. This landscape, paired with Pender’s weak hand, limited its pool of potential partners. 

Still, Pender got what it wanted: Novant will expand services in Burgaw so residents won’t have to drive into Wilmington as often for health care.

Read this newsletter online or contact The Dive team with tips and feedback at wilmington@theassemblync.com.

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Around the Region

Heirs’ Shares: As property values skyrocket, so too has the vulnerability of homes that are jointly owned by a deceased person’s heirs. Once an investor convinces one heir to sell their share, they can force a sale of the entire property in court, StarNews explains.

Tub Flub: The Pender-Topsail Post & Voice reports Pender County Commissioner Jerry Groves denied allegations that he had made racial remarks earlier this month: “When I was growing up, a Black lady washed me. She washed me in a tub.”

Sewer Soirée: Southport hopes Brunswick County will take over its sewer system, State Port Pilot reports. The move fits into a trend toward consolidation, as the county has absorbed the utility systems of Navassa and Northwest in recent years. Southport has long had among the highest sewer fees in the region, and a merger would cut rates in half.

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Around the State

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