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Richard Tofel asks some questions about the New York local news subsidies

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On April 26, 2024

In Local News

Rube Goldberg drawing via Wikipedia

Richard J. Tofel has been looking into the details of legislation that created a $90 million fund to ease the local news crisis in New York State, and he has some questions. The two most important: Are newspapers owned by publicly traded companies truly excluded, as initial reports would suggestion? And what, exactly, is a newspaper?

As I wrote the other day, the program would seem to exclude Gannett, a publicly traded corporation that owns 12 daily newspapers in New York, including the Democrat and Chronicle of Rochester and the Times Herald-Record of Middletown. But Tofel isn’t sure of that, observing that “a separate provision makes all of the newspapers eligible, despite being owned by public companies, because their print circulation has declined by more than 20% in the last five years — as has that of almost every print publication in the country.”

The other major issue is whether digital-only outlets would be eligible. Tofel writes that “whether digital news organizations will be included within what the law refers to as ‘newspapers’” is still up in the air, adding that if “the regulatory definition of ‘newspapers’ excludes digital entrants and isn’t targeted at local news jobs, the bill will have amounted to a belated incumbency protection act for a failing field.”

Among the 200 members of the Empire State Local News Coalition who pushed for this legislation is The Batavian, a digital-only for-profit in western New York. I’ve already heard from Howard Owens, the publisher, who’s worried that his outlet may not be eligible for any subsidies unless the language is clarified.

The fund would set aside $30 million a year for three years to provide assistance to local news organizations that hire and retain journalists — although that, too, is unclear; it’s possible the money would be used for business-side employees, Tofel says. It could serve as a model for other states, but first the details have got to be nailed down.

In an appearance on Editor & Publisher’s vodcast earlier this week, Zachary Richner, the founder of the Empire State coalition, said that the final language had yet to be fully worked out. That will be done not through legislation but administratively, via a governmental agency called Empire State Development.

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New York local news tax credit would benefit nonprofits and exclude Gannett

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On April 24, 2024

In Local News

New York will become the first state to offer a tax credit aimed at helping local news organizations. According to Rebuild Local News, which has been pushing for several different tax credits at the federal and state levels, the New York legislature and Gov. Kathy Hochul have agreed to a budget provision that will set aside $30 million a year for three years in order to offset the cost of hiring and retaining journalists.

Although the plan is multi-faceted, there are two aspects that I think are especially worthy of note.

The first is that calling it a “tax credit” is something of a misnomer — rather, it’s a payroll credit available to all news publishers, including nonprofits, which don’t pay taxes, and for-profits operating at a loss, which are also exempt from taxes under most circumstances. Zachary Richner, the founder of the 200-member Empire State Local News Coalition, explained that in a recent appearance on “E&P Reports,” a vodcast hosted by Mike Blinder, publisher of the trade publication Editor & Publisher. Given the importance of nonprofit startups in helping to solve the local news crisis, it makes sense to include them.

The second is that newspapers owned by publicly traded corporations are ineligible for assistance. That would exclude Gannett, the country’s largest newspaper chain, which is notorious for its slash-and-burn approach to managing its newsrooms. According to the chain’s website, Gannett currently owns 12 daily newspapers in New York, including well-known titles such as the Democrat and Chronicle of Rochester and the Times Herald-Record of Middletown.

Gannett shouldn’t be rewarded for destroying newspapers, but the provision does lead to some anomalies. For instance, Alden Global Capital, which, like Gannett, is notorious for driving up profits by hollowing out its newspapers, would presumably be eligible for assistance because it is a privately held hedge fund rather than a public company. On Twitter/X, I asked Steven Waldman, the president of Rebuild Local News, whether Alden would be able to put its hands on some state money. His answer: “Yes. I think so.”

Alden’s MediaNews Group chain owns four dailies in New York, including The Record of Troy, and The Saratogian. Alden also owns New York City’s legendary Daily News, which is listed as being part of MediaNews but which I understand is managed separately.

If I might speculate, it could be that there are several privately held chain owners in New York that are doing good work and that proponents of the credit didn’t want to exclude them. The largest privately held national chain doing business in New York is Hearst, whose Times Union of Albany is a well-regarded paper (but is not part of the Empire State coalition). In any case, even if Alden’s papers get some of the money, it provides an incentive for them to do the right thing.

Some other details of interest, quoting Rebuild Local News:

  • No newsroom can get more than $320,000.
  • The subsidy to newsrooms will be based on the number of  employees. The benefit will be up to $25,000 per employee (50% of the salary  up to a $50,000 wage.)
  • $13 million for firms with fewer than 100 employees, $13 million for bigger ones, $4 million for new hires.

As I said up top, there have been a number of tax credits proposed to help local news outlets over the past few years. The best known, the Local Journalism Sustainability Act, would have created credits not just for publishers but also for subscribers and advertisers. President Biden included a credit for publishers in his Build Back Better bill, which died at the end of 2021.

The question, as always, is whether government assistance to local news is a good idea. U.S. Rep. Claudia Tenney, R-N.Y., recently filed legislation to defund NPR in response to former senior editor Uri Berliner’s error-filled lament that the network has fallen in with the progressive left. Tenney, as it happens, is a lead sponsor of the Community News and Small Business Support Act, a bipartisan bill that would create tax credits for local publishers and advertisers.

Mike Blinder raised the issue of government interference with Richner and Waldman, who was also a guest on Blinder’s recent podcast. They responded, essentially, that the New York tax credit was worded in a neutral manner so that news organizations could not be punished for their specific content.

I agree that tax credits are about as neutral and arm’s-length as you can get in insulating journalism from government pressure. But it’s always going to be a challenge. Given that the New York credit expires after three years, you can be sure there will be a debate over whether to renew it as the expiration date approaches. That, in turn, will give politicians an opportunity to redefine eligibility requirements — and there’s always a possibility that some assessment of content might be part of that.

Still, the New York system seems like an experiment worth trying, and I’d like to see it spread to other states.

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Mike Reed, Gannett’s $3.9 million man, claims union ‘lies’ to his employees

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On March 30, 2024

In Local News

It’s that time of the year when Gannett has to report how much it’s paying Mike Reed, the CEO of Gannett, the largest newspaper chain in the U.S. and the publisher of USA Today. Don Seiffert of the Boston Business Journal looked up the company’s annual proxy filing for 2023 and found that the answer to that question is $3.9 million, an increase of 14% (but still down from the $7.7 million he received in 2021).

A couple of other notable tidbits in Seiffert’s story:

  • “Median employee compensation fell last year by $179, a fraction of a percent, as inflation rose 3.4% over the same period.”
  • Although Gannett has been touting an upsurge of hiring, including some 500 newsroom positions, the company reported employing 3,200 journalists at the beginning of January 2024, down 100 from a year earlier.

Meanwhile, Gannett’s $3.9 million man has been blasting the NewsGuild, the union that represents many of his underpaid, overworked employees. “I think the Guild, unfortunately, plays dirty and lies to our employees,” Reed told Axios last week. And check this out: “Reed also accused the Guild of lying about the company cutting jobs ‘to increase profitability.’ He said that’s not true — ‘they’re designed to keep a newsroom in the market itself,’ he said.” Huh?

In response, Axios quoted from a statement by NewsGuild-CWA president Jon Schleuss, who said in part: “It’s a shame that Mike Reed is attacking journalists again instead of listening to them. If he did, he’d understand that the only sustainable future is to invest in the talented reporters, photographers and others who drive the company’s success — not enriching corporate executives and shareholders.”

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Kyle Munson on how nonprofit dollars are keeping for-profit Iowa newspapers alive

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On March 28, 2024

In Local News

Kyle Munson leading a workshop at the Okoboji Writers’ Retreat in 2023. Photo by Doug Burns.

On our latest podcast, Ellen Clegg and I talk with Kyle Munson, president of the Western Iowa Journalism Foundation. The foundation was launched in August 2020, during the heart of the pandemic. It was a challenging time for newspapers. As we write in their book, “What Works in Community News,” the Storm Lake Times Pilot saw a real collapse in local advertising. Art Cullen, the editor, was worried about survival.

The foundation is set up as a nonprofit, so it can receive tax-free donations and philanthropic grants. In turn, it has doled out grants to small papers in western Iowa, including the Carroll Times Herald, La Prensa and the Times Pilot. These grants were critical because the crisis in local news has hit rural areas hard.

I’ve got a Quick Take on The Associated Press, which is the principal source of international and national news for local newspapers around the country — and in many cases for state coverage as well. Two major newspaper chains, Gannett and McClatchy, have announced that they are going to use the AP a lot less than they used to, which will result in less money for the AP — and either higher fees, less coverage or both for their remaining clients.

Ellen looks at Outlier Media, a woman-led team of local journalists in Detroit. They formed a network called the Collaborative Detroit Newsrooms network to produce and share news for underserved populations. They’ve won a major international award from the Association of Media Information and Communication. Executive editor Candice Fortman traveled to Barcelona to pick up the juried prize.

You can listen to our conversation here and subscribe through your favorite podcast app.

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Gannett will use Reuters for international news and the AP for election returns

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On March 20, 2024

In Media

There’s a bit more nuance to the news that Gannett is dropping The Associated Press — nuance that wasn’t included in Ben Mullin’s initial tweets or in a follow-up story at The Wrap. New York Times media reporters Mullin and Katie Robertson now report that Gannett will use Reuters for international news and that it will continue to use the AP for election data. The McClatchy newspaper chain is cutting back on its use of AP journalism as well.

Credit where it’s due: Sophie Culpepper of Nieman Lab appears to have been the first to report that Gannett will use Reuters.

Three observations:

  • The news is not as bad as it first appeared. Reuters is a world-class news organization, and the AP is the gold standard for election returns.
  • You have to wonder what this will mean for the AP. Gannett publishes about 200 daily papers, anchored by USA Today. McClatchy, which is owned by a hedge fund, publishes in 30 markets and owns major papers such as The News & Observer of Raleigh, North Carolina; the Fort Worth Star Telegram, The Kansas City Star and The Sacramento Bee.
  • I find it odd that the initial statement from Gannett, reported by Mullin on Twitter/X, made no mention of Reuters or of Gannett’s continued use of the AP for election data. A bit of damage control perhaps?

Earlier:

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Gannett says it will drop the AP. So where will it get international news?

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On March 19, 2024

In Media

Photo (cc) 2008 by Patrickneil

There aren’t too many people who subscribe to more than one daily newspaper, either digital or in print. There are a few freaks like me (I pay for four). Most people, though, go with zero or one. Which is why a daily, unlike a weekly, should offer a comprehensive mix of international, national and local news. It doesn’t matter if all or most of the non-local journalism is from wire services. After all, The Associated Press, Reuters, AFP and the like are among our finest news organizations.

Gannett, though, is about to embark on a different approach. New York Times media reporter Benjamin Mullin posted on Twitter/X earlier today that our largest newspaper chain is going to drop the AP as of March 25. “This shift will give us the opportunity to redeploy more dollars … where we might have gaps,” according to a memo from chief content officer Kristin Roberts that was quoted by Mullin, who also quoted a statement from Gannett:

This decision enables us to invest further in our newsrooms and leverage our incredible USA TODAY Network of more than 200 newsrooms across the nation as well USA TODAY to reach and engage more readers, viewers and listeners.

In other words, Gannett’s 200-plus daily papers are going to be dependent on USA Today, the mothership, for anything other than local news. So how is that going to work out?

I flipped through the current e-paper version of USA Today to see what type of international and national journalism might be available. The front page features interesting stories about COVID, Black history museums and, well, the cherry blossoms in Washington. Inside are staff-written stories on transgender issues, free speech, some Trumpy content and St. Patrick’s Day violence in Florida. The business, sports and lifestyle sections are all staff-written. So far, so good.

But there was only one international story in the main body of the paper, a piece about famine in Gaza that appears on page 2. It was written by a USA Today staff writer, but it’s based mainly on a United Nations report. At the end is a tagline stating that material from the AP was incorporated into the article. It’s accompanied by an AFP photo. In other words, covering the world without AP content may prove to be mighty difficult.

The Gannett papers offer something else to their subscribers called Nation & World Extra that looks like a print product but that I’m told is available only as part of the e-paper. Here you’ll find serious stories about the war in Gaza, the Supreme Court, the migrant crisis and more, and virtually all of it is from the AP. Imagine that you’re a subscriber to The Providence Journal and no other daily paper. Perhaps you rely on Nation & World Extra. And it’s about to lose all of its AP reporting, to be replaced with — well, who knows?

In a similar vein, Gannett also offers something called Sports Extra that also mostly consists of AP news.

I don’t want to pronounce this a pending disaster until I see what it looks like in practice. USA Today is a fine paper, and there’s no reason that Gannett’s dailies can’t use USA Today stories to provide their readers with important national news. But I don’t see how they’re going to offer any international coverage without relying on a wire service, whether it’s the AP or something else.

As is usually the case with Gannett, this seems like nothing other than a money-saving move.

Update: Gannett has clarified initial reports and now says it will use Reuters for international news and the AP for election returns. In addition, the McClatchy chain is cutting back on its use of AP journalism as well.

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Gannett is doing business with a notorious purveyor of pink slime

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On March 18, 2024

In Local News

Photo (cc) 2023 by Ruth Hartnup.

Just when Gannett was making some good news for itself by going on something of a modest hiring spree, splat! Investigative reporter Steven Monacelli has found that our largest newspaper chain, with about 200 daily newspapers, is working with Advantage Informatics, a well-known purveyor of so-called pink slime news sites.

Pink slime is the name given to websites that masquerade as legitimate local news projects but that are actually produced from distant locales. The meaning has morphed over the years. What I call Pink Slime 1.0 arose about a dozen years ago in the form of sites whose writers appeared to be based in local communities but were actually some distance away — in some cases, as far away as the Philippines. Pink Slime 2.0 has an ideological cast, mainly but not exclusively on the right. Pink Slime 3.0 adds artificial intelligence to the mix.

What most of these sites have in common is Brian Timpone, a Chicago-based conservative businessperson who is the founder of something called Metric Media, a network of some 1,200 right-wing sites. These projects tend to be pretty inept; my favorite covers the imaginary community of North Boston.

The Gannett-Timpone connection was exposed last week in a major report for Nieman Lab written by Monacelli on Advantage Informatics, a Timpone venture that produces advertorial content. Monacelli found that, in years past, newspapers such as the Houston Chronicle (owned by Hearst since 1987) and The San Diego Union-Tribune (recently acquired by the hedge fund Alden Global Capital) have taken advantage of Timpone’s services. (The Chronicle told Monacelli that it has no record of such a  relationship.) Gannett is the one newspaper company he found that has a current, ongoing relationship with Advantage. He writes:

A Gannett spokesperson told me that the company works with Advantage Informatics on “advertorial” content. When asked about Advantage Informatics’ relationship with the broader Metric Media network, the spokesperson said, “Ethics and our values are priority for us.”

Monacelli has written quite a tale that includes a Tennessee journalism professor who used to work for Advantage and Advantage’s ambition to offer “dedicated beat reporting” of local sports, governmental meetings and “keeping a close eye” on statehouses and Congress.

On the one hand, I’m not sure it’s that big a deal who produces advertorial content. On the other, the fact is that Gannett is working with the pink slimiest company in the country. Despite Gannett’s recent good news on the hiring front, it would hardly be surprising if company executives played around with having Advantage try its hand at community coverage as well. After all, it was just a few months ago that Gannett was caught using AI to write local sports stories, to hilarious effect.

A final note: If you’d like to learn more about pink slime, Ellen Clegg and I interviewed Pri Bengani, an expert based at Columbia University who’s quoted in Monacelli’s article, on the “What Works” podcast last fall.

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Some good news from Rhode Island on the local news front

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On February 25, 2024

In Local News

Ted Nesi of WPRI-TV (Channel 12) in Providence reports some good news from Rhode Island on the local news front. In his weekly “Nesi’s Notes” column (item 10), he writes that the seven local newspapers and other properties that comprise the East Bay Media Group are thriving, and that The Valley Breeze in northern Rhode Island is also doing well. East Bay publisher Matt Hayes tells Nesi that his properties now have 145,000 weekly readers, while Breeze publisher James Quinn says he’s now distributing 50,000 copies each week and is expanding.

The East Bay papers are paid and the Breeze is free, a sign that different types of for-profit business models can work. As Nesi observers, this comes at a time when even relatively healthy national papers such as The Wall Street Journal and The Washington Post are cutting their newsrooms.

It may be too soon to declare a trend, but with even Gannett in hiring mode after years of devastating cuts, it could be that people are rediscovering the importance of local news.

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Illinois seeks to bolster community journalism. Plus, a local news round-up.

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On February 22, 2024

In Local News

The Illinois Statehouse. Photo (cc) 2023 by Warren LeMay.

Illinois lawmakers this week unveiled a massive package aimed at bolstering local news. According to Mark Caro of the Local News Initiative, based at Northwestern University in Chicago, the package comprises two separate bills:

The Journalism Preservation Act would require Big Tech companies such as Google and Facebook to compensate news organizations for the content that they share, display or link to on their platforms. The Strengthening Community Media Act offers a broad array of incentives, tax breaks and scholarships intended to repopulate local newsrooms. Included in that bill is a provision that calls for 120 days’ written notice before a local news organization may be sold to an out-of-state company.

As I’ve said before, I’m less than enthusiastic about going after the tech platforms, which presupposes that they are somehow stealing journalistic content without paying for it. Facebook executives have made it clear that they can live quite nicely without news. With respect to Google, media outlets find themselves in the awkward situation of demanding compensation while at the same time depending on the search giant to drive traffic to their websites. Indeed, any one of them could insert a simple line of code in their sites that would make them invisible to Google. None of them does. I would like to see Google and Facebook do more for local news, and maybe it ought to be mandated. But this bill seems like too much of a blunt instrument, as does similar legislation being pushed by Sen. Amy Klobuchar at the federal level.

The second Illinois bill includes a number of different ideas. I particularly like the proposed requirement for a 120-day notification period. As Steven Waldman, the president of Rebuild Local News, said recently on the podcast “E&P Reports,” a mandatory delay can give communities time to rally and prevent their local newspaper from falling into the hands of chain ownership.

Other provisions of the Strengthening Community Media Act would mandate that state agencies advertise with local news outlets, provide tax credits to publishers for hiring and retaining journalists, enact additional tax credits for small businesses that advertise with local outlets, and create scholarships for students who agree to work at a local Illinois news organization for two years or more.

It’s good to see action taking place at the state level given that several federal proposals in recent years have gone nowhere despite bipartisan support. It’s also notable that the proposals were drafted by Illinois’ Local Journalism Task Force, which was created in August 2021. Here in Massachusetts, legislation was signed by then-Gov. Charlie Baker way back in January 2021 to create a commission that would study local news. I had a hand in drafting that legislation and would be one of its members, but the commission has yet to get off the ground.

There are several other developments in local news that are worth taking note of.

• Gannett is making a $2 million investment in its Indianapolis Star aimed at bolstering the newsroom and the advertising sales staff. Two top Gannett executives recently appeared on “E&P Reports” about Gannett’s plans to reinvest in its properties. Unfortunately, Holly V. Hayes of the Indy Star writes, “This is the only site in the USA TODAY Network, which includes more than 200 local publications across the country, where such an investment is being made.” My hope is that if the investment leads to a boost in circulation and revenues, then it will serve as a model for what Gannett might do elsewhere.

• A new hyperlocal news project has made its debut in Boston. The Seaport Journal, a digital news outlet, covers the city’s newest neighborhood. Meanwhile, the Marblehead Beacon, one of three independent projects covering that town, has announced that it’s ending regular coverage but will continue to “pursue periodic and unique pieces, and shift away from daily, weekly, or otherwise regular articles.” A reminder: We track independent local news organizations in Massachusetts, and you can find a link to our list in the upper right corner of this website. Just look for “Mass. Indy News.”

• Local access cable television plays an important role in community journalism by carrying public meetings, providing a platform for residents to make their own media, and, in some cases, by covering the news directly. Unfortunately, cord-cutting has placed access television at risk since stations’ income is based on a fee assessed to cable providers for each subscriber. In CommonWealth Beacon, Caleb Tobin, a production technician at Holbrook Community Access and media and a junior at Stonehill College, argues in favor of Massachusetts legislation that would impose a 5% fee on streaming services. “While often viewed as a relic of the past,” Tobin writes, “the services that cable access stations provide are more important now than they’ve ever been.”

• Many thanks to Tara Henley, host of the Canadian podcast “Lean Out,” who interviewed Ellen Clegg and me about our book, “What Works in Community News.” You can listen here.

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Gannett is ramping up on the advertising and editorial sides — but will it last?

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On February 21, 2024

In Local News

For a long time I’ve heard an alternative explanation for why newspaper advertising collapsed over the past 15 years. The argument goes something like this: Yes, Craigslist, Google and Facebook offered a better deal and took most of the ads that used to belong to newspapers. But newspapers themselves were to blame, too. Ad salespeople had become so accustomed to sitting at their desks and taking the orders that came pouring in that they actually had no experience or incentive to get out and sell. The tech platforms were going to have a devastating effect on them in any case, but it was worse than it needed to be, so this argument goes, because they couldn’t shake themselves out of the lethargy that came with many years of enjoying a monopoly or, at worst, a duopoly.

Which is why there’s some reason to be at least a little bit hopeful about the latest moves by a large media company that is hiring on both the business and editorial sides. At a time when many news organizations are in the midst of laying people off (CNN, The Washington Post, the Los Angeles Times) or shutting down (The Messenger), one media mega-corporation that is a household name is taking the opposite approach.

Would you believe it if I told you that the company is Gannett? The chain, which controls about 200 daily papers, anchored by USA Today, is rightly known for hollowing out newsrooms and using the savings to pay down debt and enrich their owners and top executives. These days, though, they are talking about trying something different.

Recently Mike Blinder of Editor & Publisher had two top Gannett executives on his podcast, “E&P Reports” — the chief content officer, Kristin Roberts, and Jason Taylor, the chief sales officer. After years of cutting at Gannett and the chain that it merged with several years ago, GateHouse Media, Gannett is now in expansion mode. Taylor said that Gannett has hired about two dozen local general managers since last August, with plans to hire more. These are the folks who are in charge of selling advertising, and they say it’s paying off with new accounts and with the return of some old accounts that left years ago.

Meanwhile, Roberts said that Gannett has hired 500 journalists since June of last year, with more to come in the months ahead. These are reporters, editors and visual journalists who, she said, will “bring strength back to local newsrooms, so that they can do the job of strengthening their local communities.” And yes, she mentioned the reporters that Gannett hired to cover Taylor Swift and Beyoncé, so make of that what you will.

Now, of course we should be skeptical. Axios has reported that the combined company eliminated fully half of its 21,000 employees after the 2019 merger, and the destruction it has wreaked in the communities it supposedly serves has been deep. I would love to hear from Media Nation readers whether they’ve seen any improvement in their Gannett paper’s coverage of local news in recent months.

The situation is especially dire in Eastern Massachusetts, where Gannett has closed and merged dozens of weekly papers and replaced local news stories with regional content from around the chain. Weeklies were at the heart of GateHouse, but the new Gannett doesn’t seem to have any interest in weeklies. If improvement is going to come, I suspect, it’s going to be at the dailies.

It’s also fair to be skeptical about whether the current upsurge is sustainable. Roberts and Taylor were recruited at a moment when the executives at the very top of Gannett decided to see if a little expansion might bring in more money than round after round of cuts. If it works, great. If it doesn’t, well, we know that the cutting will resume. Gannett remains heavily burdened by the debt it took on when it merged with GateHouse, which led the new Gannett to cut half its workforce.

The hiring that’s taking place now doesn’t come close to making up for what has been lost. But if they succeed, perhaps the hiring will continue.

• Blinder has been on a roll with his podcast. His latest features Steven Waldman, the president of Rebuild Local News, and Jeff Jarvis, a journalist, author and the retiring director of the Tow-Knight Center for Entrepreneurial Journalism at City University of New York. The discussion was billed as debate over whether legacy media is worth saving or if instead it’s time to let them go. They agreed more than I thought they would, though they diverged when the discussion turned to government assistance and efforts to force Google and Facebook to compensate news organizations. It’s well worth a listen.

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