The Washington PostDemocracy Dies in Darkness

The Newseum was a grand tribute to the power of journalism. Here’s how it failed.

A view of the Washington skyline from inside the Newseum. (Katherine Frey/The Washington Post)

A bald eagle named Challenger shot into the sky on that day in April 2008 as the Newseum celebrated the unveiling of its sumptuous building with the soaring facade just steps from the U.S. Capitol. A Marine band played before an A-list audience that included the speaker of the House of Representatives, the chief justice of the United States and titans of the newspaper industry.

Al Neuharth, the brash USA Today founder whose grand vision was coming to fruition, gushed about “this glamorous glass house” that had sprouted on land bought at the highest price ever for a chunk of real estate in the city’s history. The new museum’s chief executive, Charles Overby, declared that they were “laying down a marker right here on Pennsylvania Avenue that the First Amendment is the cornerstone of our democracy.”

It was a dazzling start that gave no hint of the dizzying fall to come.

“Everyone was so mesmerized,” recalled University of Maryland journalism professor Edward Alwood. “We thought . . . this thing can’t lose.”

Just 10 years later, the Newseum is shrinking into an uncertain future, the distress sale of its building to Johns Hopkins University marking the end of a troubled tenure that has become a cautionary tale of bloated budgets and unrealized ambition. The museum has been weighted down by crushing debt and beset by management upheaval, and its downfall has long been foretold, but it is still a gut punch to an industry labeled the “enemy of the people” by President Trump and struggling with digital-era financial troubles galore.

Johns Hopkins to buy Newseum building

Over the next year — before it closes to the public in January 2020 — the museum will welcome visitors into its light-splashed atrium on their way to see artifacts as heartbreaking as a charred remnant of the New York tower that terrorists toppled on Sept. 11, 2001, and as inspiring as its popular gallery of Pulitzer-winning photographs. Even as visitors walk past those sights, planning will be underway to scatter the collection into a storage facility and, in some cases, to return items to lenders.

“We plan to continue the Newseum’s crucial work of increasing public understanding of the importance of a free press and the First Amendment for decades to come — through digital outreach, traveling exhibits, and web-based programs in schools around the world, as well as hopefully in a new physical home in the area,” Maeve Gaynor Scott, the Newseum’s director of collections, said in an email last week to individuals and institutions that have lent pieces to the museum.

Neuharth’s daughter, Jan Neuharth, who helms the Freedom Forum, the museum’s primary benefactor, has said a new location in the city will be found after the $372.5 million sale to Hopkins. But in an interview with The Washington Post last year as the depth of the museum’s financial woes were deepening, Neuharth mused aloud about myriad possibilities, including a home in some digital “cloud.”

“The short answer,” she said then, “is we don’t know what it will look like.”

'We chose Washington'

The Newseum originally opened in 1997 in Rosslyn in a building with a geodesic dome as its only recognizable feature. About 400,000 visitors a year enjoyed free entry to its interactive exhibitions, innovative video displays and a memorial to fallen journalists. Good reviews and enthusiastic crowds prompted Al Neuharth to dream bigger, and in the coming years, he was imagining a splashier space across the Potomac River.

Heavily in debt, Newseum considered risky strategy

The Freedom Forum had a reputation for excess, so it wasn’t a shock that it plunked down $100 million for a parcel on Pennsylvania Avenue with a prime view of the Capitol — a record-
setting sale.

To pull off the real estate deal, the foundation had to make a choice: pay for the building in Washington or continue to maintain its network of overseas offices, which supported democratic ideals.

“We chose Washington,” Overby told the American Journalism Review in 2001.

Overby has not responded to interview requests.

Eliminating the overseas offices wasn’t enough. The next year, the foundation axed its Freedom Forum Fellows program, which helped working journalists get academic credentials to teach at universities. It shuttered its old location in Rosslyn, as well.

With its plans fixed on swanky new digs in Washington, the foundation also needed piles of cash. It took out $350 million in loans to pay for construction. The risks were acceptable, according to executives involved, because their coffers were fat. The Freedom Forum’s assets topped $1.1 billion in the late 1990s, when planning for the new building began.

Marrying vision and execution proved problematic. Costs soared. Delays mounted. By the time the Newseum was ready to open its doors, the project was three years behind schedule, and its price tag would eventually swell to $477 million.

“I thought this day would never come,” Overby said at the dedication ceremony for the steel-and-glass building — with the First Amendment etched in stone and facing Pennsylvania Avenue.

The museum’s leaders brimmed with confidence. They looked at the millions who visited the Smithsonian’s Air and Space and Natural History museums — which had average annual attendance of 7.4 million and 5.3 million in the early 2000s — and figured they could reasonably expect to draw 1 million a year. High-tech exhibits, a conference space and a restaurant from famous chef Wolfgang Puck would serve as the lure.

But there was a difference between their museum and the popular, admission-free Smithsonians: They would charge an entrance fee — one of the highest in city. It now stands at $25 a person.

‘A slow-motion disaster’

They never met their goal. In 2017, the museum’s best attendance year, it fell short with 855,000 visitors. And the money wasn’t coming in, either. From 2008-2017, admission revenue never broke $10 million, meaning the average ticket was steeply discounted to less than $10. During the same 10-year span, the Newseum’s rental and catering revenue kept the organization afloat, averaging $15.2 million — more than double the amount generated by admissions.

Meanwhile, the museum cut expenses. There have been five rounds of staff cuts in the past 10 years, the first in 2009 and the most recent in 2017, when it laid off 10 percent of its staff. All the while, the Freedom Forum poured money into the struggling operation, handing over an average annual subsidy of $29 million, according to tax filings. Even with that yearly injection of cash, the Newseum has had deficits every year.

While operating in the red, the Newseum kept paying big salaries to upper management, including $1.2 million to chief executive James C. Duff in 2014. His successor, Jeffrey Herbst, pocketed $632,441 in 2016. Even so, the museum has had five chief executives since 2014.

Jan Neuharth, who declined to be interviewed for this article, has blamed the economy for the institution’s financial problems. The Great Recession hit just months before Newseum 2.0 opened in Washington, cutting into its admissions and donations. By 2013, the Freedom Forum’s $1.1 billion endowment had shriveled to about $340 million, tax records show.

“I don’t think we’re bad about money,” Jan Neuharth said when pressed about the financial problems in an interview last year. “We have thoughtfully and thoroughly addressed a situation that happened. I don’t think anybody saw ’08 coming.”

When the economy rebounded after the stock market convulsions, the Newseum failed to bounce back. The stock market roared to record highs, but the museum couldn’t manage to capi­tal­ize by attracting some of that newly created wealth.

The news industry was contracting and consolidating, leaving the museum with fewer doors to knock on and smaller grants from its early supporters. Big fundraising campaigns were promised but never materialized. More than $300 million in loans became the organization’s albatross, and donors traditionally have little enthusiasm for making gifts to retire debt.

'The Newseum is ill-defined'

One of the hallmarks of the original Newseum was its ­forward-leaning embrace of technology. At its new location, however, it struggled to reflect dramatic changes in the media industry. It opened a year after the iPhone hit the market. But its galleries displayed another era’s idea of advanced news technology, such as satellite trucks and studios with green screens, at a time when the most innovative news organizations were beginning to fling themselves into the digital era.

“I don’t think we all agree, as we did in the past, about what ‘news’ means,” said Alwood, the Maryland professor. “The Newseum is trying to portray an industry that is ill-defined, therefore the Newseum is ill-defined.”

Critics groused about exhibits that focused on pop culture, including an early show on Elvis Presley and more recent ones on rock music and presidential dogs, rather than tackling such issues as the changing media and consumer habits. The advent of the Trump era created a minefield for an institution that increasingly seemed unsure of its footing. Instead of using its authority to push back on Trump’s claims that journalists are the enemies of the people and that the media traffics in “fake news,” the Newseum shop sold red “Make America Great Hats” and “fake news” T-shirts. It pulled them last summer, after a firestorm of criticism.

Still, there was something that visitors — especially journalists — found endearing about the place. As its financial troubles spiked to crisis levels, many journalists turned to social media to share their despair. They thought it was something worth saving, even after a decade of frustration.

In August, Douglas Cumming, a journalism professor at Washington and Lee University who had been a Freedom Forum fellow, proposed a panel on redesigning the Newseum.

“Surely the history of journalism and the inspiration of the First Amendment deserve a museum for the masses,” according to his proposal. “It may be too late or irrelevant for saving the Newseum, but what ideas might be generated for a sustainable business model.”

He asked Newseum officials to participate.

They turned him down.

Cumming is one of many professors who rely on the museum.

“We used to take classes there, busloads of kids,” he said. “It’s good. The civil rights exhibit, the history section, with primary sources. They are a good resource for journalism education. Maybe they can come up with something new that doesn’t have to do with a dazzling building in the middle of Washington.”

Erika Pribanic-Smith, a professor at the University of Texas at Arlington, wants the Newseum to expand its digital content to better serve a society gripped by partisan bickering and suspicious of media bias.

“We need journalism education now more than ever,” she said, noting that she uses the museum’s digital archives and “Today’s Front Pages” frequently. “Anything that they can do, such as traveling exhibitions, is fantastic. I think the building was a wonderful beacon, a wonderful monument to journalism. But the more they can do with their digital space, to get the word out there, that’s so much more accessible.”

Such retrenchments are rare, and difficult. In 2011, the American Folk Art Museum in New York was forced to sell its 10-year-old showcase space next to the Museum of Modern Art because it defaulted on construction loans. It returned to its smaller building at Lincoln Square. Financial problems forced the National Academy of Design in New York to sell two of its three buildings, including one on Fifth Avenue. Its school and museum are “on hiatus.”

The Newseum’s next chapter is less certain.

“They have to suck up the loss,” Andrew Taylor, an arts management professor at American University, said of the sale. “It feels like a failure, and it’s disappointing. But if they care about the mission, they need to regroup.”

Correction: An earlier version of the story incorrectly said that before the Newseum moved to the District it was above the Rosslyn Metro station.