Tag: Journalism Competition and Preservation Act

Omnibus spending bill reportedly omits assistance for local news

On By Dan KennedyIn Local News
The U.S. Capitol. Photo (cc) 2013 by Mark Fischer.

The $1.7 trillion omnibus spending bill that’s making its way through Congress reportedly contains nothing to ease the local news crisis. An emailed news bulletin from the trade publication Editor & Publisher, citing unnamed sources, reported this morning that both the Journalism Competition and Preservation Act (JCPA) and the Local Journalism Sustainability Act (LJSA) have been excluded from the bill.

For those of you who don’t follow these issues obsessively, let me unpack this a bit.

The JCPA would allow an antitrust exemption for news organizations so that they could bargain collectively with Google and Facebook for a share of their advertising revenues. You often hear news executives complain that the giant platforms are republishing their content without paying for it. That is a serious distortion. On the other hand, there’s no doubt that Google and Facebook, which control about half the digital advertising market, benefit significantly from linking to and sharing news.

The LJSA would create three tax credits that would benefit local news organizations. The first would allow consumers to write off the cost of subscriptions. The second would provide a tax benefit to businesses for buying ads. The third would grant tax write-offs to publishers for hiring and retaining journalists. That last provision was included in President Biden’s Bill Back Better bill, which Senate Republicans, joined by Democratic Sen. Joe Manchin, killed last year.

The demise of the JCPA is not entirely bad news. I thought it might be worth giving it a try to see what the two sides might come up with. Still, there was a lot of merit to the argument made by critics like Chris Krewson, executive director of LION (Local Independent Online News) Publishers, that most of the revenues would be diverted to large legacy newspaper publishers — including those owned by corporate chain owners and hedge funds — rather than to community-based start-ups.

The LJSA, on the other hand, was more intriguing, even though it would also benefit legacy newspapers. For one thing, the tax credits could provide a real lifeline to small local news projects. For another, the third provision, for publishers, would reward the large chain owners only for good behavior — Gannett and Alden Global Capital could not tap into that credit if they keep laying off journalists.

I’m guessing that this is the end of the road for both proposals given that the Republicans will take over the House in the next few weeks. That’s not entirely a bad thing. As Ellen Clegg and I have found in our research at “What Works,” local news organizations across the country, from for-profit legacy newspapers to nonprofit digital start-ups, are finding innovative ways to continue serving their communities.

The economic challenges facing news organizations is real, but in many cases they can be managed with innovative thinking and committed local ownership.

Finally, here are a couple of “What Works” podcasts that will bring you up to speed.

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The JCPA slips back beneath the waves, perhaps never to be seen again

On By Dan KennedyIn Local News1 Comment

Well, that didn’t take long. Cristiano Lima of The Washington Post reports that the Journalism Competition and Preservation Act (JCPA) has been dropped from the defense-spending bill. I pointed out on Tuesday that there were some real shortcomings to the proposal but thought that, on balance, it was worth giving a try. Since the JCPA got new life earlier this week, though, it’s been subject to a withering attack by everyone from the ACLU a group of United Church of Christ ministers.

I’m going to guess that that’s the last we’re going to hear about the JCPA because House Republicans oppose it, and time is running out for the Democratic majority to push it through. Maybe this will carve out space for a better bill, the Local Journalism Sustainability Act, which would bolster local news by creating temporary tax credits for subscribers, advertisers and publishers. I’m dubious, though, that House Republicans are going to be willing to do anything for the next two years except investigate Hunter Biden and cower before Marjorie Taylor Greene.

Earlier:

A bill to force Google and Facebook to pay for news moves closer to passage

On By Dan KennedyIn Local News1 Comment
Photo (cc) 2008 by Nick Ares

A controversial measure that could force Google and Facebook to pay for the news they repurpose has suddenly been revived in the last days of the lame-duck Congress. The Journalism Competition and Preservation Act, or JCPA, would allow news organizations to skirt antitrust law and band together so they can negotiate with the two giant platforms over compensation. If negotiations fail, an outside arbitrator would be brought in to impose a settlement.

On the “What Works” podcast, Ellen Clegg and I recently interviewed U.S. Rep. David Cicilline, D-R.I., one of the co-sponsors of the JCPA. Cicilline spoke of the measure in terms of breaking up Google and Facebook’s monopoly on digital advertising, which is certainly real enough. According to Statista, the two tech titans control 52% of the market.

I last wrote about the JCPA in August. And though I described the bill as having lurched back to life, there hadn’t been many signs since then that it was going anywhere. That is, until this week, when the measure was added to a “must pass” defense-funding bill. House Republicans oppose the JCPA, and with Rep. Kevin McCarthy, R-Calif., on the verge of taking the speaker’s gavel, right now is the last chance. Sara Fischer and Ashley Gold have the details at Axios.

In August, I expressed some reservations about the JCPA but thought it was worth passing to see what would come out of it, especially since it was time-limited to four years (since doubled to eight). You often hear simplistic claims by proponents that Google and Facebook are republishing journalistic content without compensation. In fact, they’re not republishing anything. There’s no stealing and no copyright violation taking place. But there’s also no question that Google is far more valuable and useful because users are able to search for news content, and that some not-insignificant portion of Facebook’s traffic comes from users linking to and commenting on news stories. It does not strike me as unfair to insist that the platforms pay something for that value.

And yet the JCPA carries with it the possibility of some real downsides. Greedy corporate owners like Gannett and Alden Global Capital would benefit without any obligation to invest more in journalism. And though the legislation excludes larger news organizations like The New York Times and The Washington Post, a similar law in Australia has served mainly to line the pockets of the press baron Rupert Murdoch.

A better bill, in my view, is the Local Journalism Sustainability Act, or LJSA, which would provide for three tax credits: one for consumers who pay for a local news subscription; one for advertisers; and one for publishers that hire or retain journalists. As Steve Waldman of the Rebuild Local News Coalition told Ellen and me on “What Works,” that last provision, at least, would only benefit the corporate chains if they actually invest in journalism. But the LJSA has been seemingly stuck in congressional limbo for several years. If the JCPA passes, I can’t imagine that the LJSA will do anything other than disappear.

Facebook is threatening to eliminate all news content if the JCPA becomes law, a threat similar to one that it made and backed away from in Australia. The company, formally known as Meta, also ended its program of supporting local journalism recently, which will remove millions of dollars from what is an already shaky revenue stream.

I have to say that I was struck by a letter of opposition to the JCPA issued Monday by a coalition of 26 public-interest and trade organizations including the ACLU, the Internet Archive, LION (Local Independent Online News) Publishers, Common Cause, the Wikimedia Foundation and the United Church of Christ Ministry (!). Among other things, the letter claims that the money will mainly benefit media conglomerates and large broadcasters without setting aside anything for journalists. The coalition puts it this way: “The JCPA will cement and stimulate consolidation in the industry and create new barriers to entry for new and innovative models of truly independent, local journalism.”

We’ll see how it works out. There’s no question that many local news organizations are in difficult straits, and that a guaranteed source of income from Google and Facebook may be the difference between thriving and just barely getting by. If the JCPA is approved, I just hope it doesn’t become one of those government programs that become a permanent part of the landscape. If it works, fine. If there are problems, fix them. And if it’s a disaster, get rid of it.

Rep. Cicilline on why he favors extracting revenues for news from Google and Facebook

On By Dan KennedyIn Local News
Congressman David Cicilline. Photo (cc) 2018 by the Brookings Institution.

On the latest “What Works” podcast, Ellen Clegg and I talk with U.S. Rep. David Cicilline, who represents the First District of Rhode Island in Congress. Cicilline, who is a Democrat, is part of a bipartisan group of U.S. representatives and senators sponsoring the Journalism Competition and Preservation Act. Co-sponsors include Democratic Sen. Amy Klobuchar from Minnesota; Republican Sen. John Kennedy from Louisiana; Republican Rep. Ken Buck from Colorado; and Senate and House Judiciary Committee chairs Dick Durbin, an Illinois Democrat, and Jerrold Nadler, a New York Democrat.

The JCPA would remove legal obstacles to news organizations’ ability to negotiate collectively and secure fair terms from gatekeeper platforms that proponents say use news content without paying for it. Critics counter that it’s more complicated than that. The legislation also allows news publishers to demand arbitration if they reach an impasse in those negotiations.

Ellen has a Quick Take on new research being done by the Institute for Nonprofit News. The INN just released 2022 fact sheets on three types of nonprofit newsrooms: local news, state and regional news, and national and global news. While each group shares some similarities, INN found that geography matters in terms of revenue models and audience development.

I take a few more whacks at Gannett because newsrooms are being hit with unpaid furloughs, buyouts, a freeze on their pension benefits and more.

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

The government is not going to spend billions on local news. Nor should it.

On By Dan KennedyIn Local News
Photo (cc) 2008 by Tyler

Washington Post columnist Perry Bacon Jr. offered a provocative idea today: a $10 billion fund to pay for non-paywalled, nonprofit local news in each of the country’s 435 congressional districts. The money, he wrote, would provide salaries for 87,000 journalists at 1,300 news organizations.

“Such a massive investment in local news isn’t going to happen next week and probably not next year, either,” he wrote. “But it is also not a pipe dream.” Well, in fact, it is a pipe dream. There is little or no chance of anything like this happening, and it probably shouldn’t.

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At a time when Congress can’t seem to pass supposedly bipartisan proposals to let the news industry negotiate with Facebook and Google for a share of their advertising revenues (the Journalism Competition and Preservation Act) or to provide tax credits to subscribers, advertiser and publishers (the Local Journalism Sustainability Act), the idea that the government is going to cough up $10 billion to support local news is absurd.

Fortunately, there is an alternative to Bacon’s top-down approach. Across the country, hundreds of local and regional news startups — nonprofits, for-profits and volunteer efforts — are going about the hard work of covering their communities. We’ve seen a plethora of them debut in Eastern Massachusetts just this year since Gannett began regionalizing and closing its weekly newspapers. And a brand-new one, The Concord Bridge, is slated to launch later this week.

The grassroots, one-community-at-a-time approach to solving the local news crisis is not perfect. It can be purely a matter of luck that one town gets good coverage and another doesn’t. It’s also easier to start such projects in the affluent suburbs than it is in more diverse areas. But the movement is growing, so perhaps the best thing we can do is let it develop.

As you probably know, Ellen Clegg and I are writing a book about a few of these projects that will be called “What Works: The Future of Local News.” Last year we wrote what might be called a “pretort” to Bacon’s column in an essay for Nieman Lab. Please have a look.

Catching up on some stories about local news that you might have missed

On By Dan KennedyIn Local News2 Comments

I don’t do this very often, but there are a number of important stories in local journalism that are flying by, and I want to put down a marker. No need to go into detail — just click on the links to find out more.

  • California sets aside $25 million in government money to support local journalism.
    • The move follows the creation of the New Jersey Civic Information Consortium, which this year will distribute $3 million for specific projects such as a plan to expand news coverage across Jersey City; an online radio program in Creole for the Haitian community; and an oral history on efforts to clean up drinking water in Newark.
    • Unlike New Jersey, the California initiative will be used to pay reporting fellows from the UC Berkeley Graduate School of Journalism to cover under-represented communities.
  • The Journalism Competition and Preservation Act, which would set aside antitrust law to allow news organizations to bargain collectively with Google and Facebook for compensation, was dealt a huge setback.
    • U.S. Sen. Ted Cruz, R-Texas, succeeded in adding an amendment that would make it more difficult for news organizations to moderate comments. The lead sponsor of the bill, Sen. Amy Klobuchar, D-Minn., responded by withdrawing the legislation but said she’ll be back.
    • LION (Local Independent Online News) Publishers and a number of organizations came out in opposition to the proposal, calling it “ill-advised” and “enormously problematic.” A similar law in Australia has been criticized for lining the pockets of large publishers — mainly Rupert Murdoch — while doing little for smaller players.
  • Google News Showcase, touted as a source of revenue for news outlets whose content would be featured, has been stalled because the giant platform has been unable to reach agreements with several key publishers.
    • Gannett, the country’s largest newspaper chain, was offered $6 million a year to feature journalism from its flagship USA Today  as well as its local papers, according to The Wall Street Journal. Gannett’s reported counter-demand: $300 million.
  • Speaking of Gannett, a nauseating development has surfaced in a sexual-abuse lawsuit against the company’s Democrat & Chronicle newspaper in Rochester, New York.
    • According to the independent Rochester Beacon, the company is arguing that seven former newspaper carriers who say they were molested by a supervisor should have filed for workers’ compensation at the time the alleged abuse took place.
    • The carriers were 11 and 12 years old at the time of the alleged incidents.

Congress is talking once again about making Google and Facebook pay for news

On By Dan KennedyIn Local News2 Comments
Sen. Amy Klobuchar is a lead sponsor of the Journalism Competition and Preservation Act. Photo (cc) 2019 by Gage Skidmore.

A bill that could force Google and Facebook to fork over billions of dollars to local news outlets has lurched back to life. The Journalism Competition and Preservation Act, or JCPA, would allow publishers to negotiate as a bloc with the two giant tech platforms, something that would normally be prohibited because of antitrust concerns. The proposal would exclude the largest publishers and, as Rick Edmonds notes at Poynter Online, would lead to binding arbitration if the two sides can’t reach an agreement.

The legislation’s cosponsors in the Senate are Amy Klobuchar, D-Minn., and John Kennedy, R-La.; the House cosponsors are David Cicilline, D-R.I., and Ken Buck, R-Colo. That bipartisan support means the bill might actually be enacted. But is it a good idea?

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The premise on which the legislation is built is that Google and Facebook should pay fair compensation for repurposing the news content that they use. This strikes me as being much more straightforward with Google than with Facebook. Google’s mission is to index all the world’s knowledge, including journalism; Facebook is a social network, many of whose users post links to news stories. Facebook isn’t nearly as dependent on journalism as Google is and, in fact, has down-ranked it on several occasions over the years.

Google’s responsibility isn’t entirely clear, either. Yes, it links to news stories and publishes brief snippets. But it’s not a zero-sum situation — there’s no reason to believe that Google is depriving news publishers of traffic. It’s more likely that Google is pushing users to news sites and, with the rise of paywalls, may even be boosting subscriptions for local news outlets. Still, you could make a philosophical argument that Google ought to pay something because it benefits from having access to journalism, regardless of whether that deprives news outlets of any revenues.

A similar law in Australia has brought in $140 million, Edmonds reports. But critics have complained that the law’s main effect has been to further enrich Rupert Murdoch, still the leading press baron in his native country.

The JCPA should not be confused with the Local Journalism Sustainability Act, or LJSA, which would provide three tax credits for local news outlets — one for subscribers, who would get to write off news subscriptions on their taxes; one for advertisers; and one for publishers for hiring and retaining journalists. As Steve Waldman, chair of the Rebuild Local News Coalition, recently told us on the “What Works” podcast, this last provision is especially powerful because it would provide an incentive to do the right thing even at bottom-feeding chains owned by Alden Global Capital and Gannett.

Despite bipartisan support, the LJSA ran aground last year when President Biden split off the publishers’ credit and added it to the doomed Build Back Better bill. Perhaps it will be revived.

Is either measure needed in order to revive local news? What Ellen Clegg and I have found in the course of reporting for our book-in-progress, also called “What Works,” is that many independent local and regional news organizations across the country, nonprofit and for-profit alike, are doing reasonably well without government assistance. Since both the JCPA and the LJSA would be time-limited, maybe it’s worth giving them a try to see what the effects will ultimately be. But neither one of them will save local news — nor is it clear that local news needs saving once you remove the dead hand of corporate chain ownership.

Government ideas to help ease the local news crisis may be fizzling out

On By Dan KennedyIn Local News5 Comments
Photo (cc) 2007 by weirdisnothing

Less than a year ago, it looked like the federal government might be ready to pass legislation aimed at addressing the local news crisis. The ideas in play were far from perfect, but they might have provided some needed assistance, at least for the short term. Now those proposals appear to be all but dead.

Rick Edmonds, who analyzes the news business for Poynter, wrote recently that the Local Journalism Sustainability Act, or LJSA, seems likely to fall victim to Washington’s dysfunctional political environment.

The LJSA would create three tax credits for a period of five years. One would allow news consumers to write off the cost of subscriptions on their taxes. Another would be aimed at businesses that advertise in local news outlets, and a third would subsidize publishers who hire or retain journalists.

Late last year, though, the credit for publishers was broken off and added to the Build Back Better bill, which died because of intransigence on the part of all 50 Republicans plus Democratic Sen. Joe Manchin. As Edmonds observes, the LJSA could be revived and considered as a discrete piece of legislation. But, he writes, “separate breakout legislation would need to go through committees and get 60 votes. A subsidy for journalism is probably not so popular as to command those 10 added votes.”

Meanwhile, another Democratic senator, Amy Klobuchar, is pushing a bill that would allow the news business to bargain with Facebook and Google to share some of their ad revenues. That bill, dubbed the Journalism Competition and Preservation Act, or JCPA, is modeled after a law adopted in Australia. But the JCPA may also be dead on arrival, Edmonds reports, as Republican Sen. Mike Lee has trashed it by saying that “the last thing we should do is to accept a cartel — or create one — colluding against a business partner.”

Yet a third bill sponsored by Democratic Rep. Mark DeSaulnier may prove less controversial. The DeSaulnier legislation would make it easier for a for-profit news organization to convert to nonprofit status, something that is currently not covered by the IRS code. But given that the IRS has shown quite a bit of willingness to approve such conversions in recent years, the effect of that particular proposal may be minimal. (Disclosure: I had a hand in drafting the DeSaulnier legislation.)

As I said, these proposals are problematic. The LJSA would reward corporate chain owners along with independent operators, thus subsidizing a model that has failed to provide communities with news and information they need. In Australia, the revenue-sharing scheme with Google and Facebook has mainly served to further enrich Rupert Murdoch.

There is no substitute for innovation and passion at the local level. Still, given the dire straits in which local news finds itself, a helping hand from the government would be welcome. Sadly, it doesn’t look like it’s going to happen.

Getting to the Crux of the matter with a Catholic news project that began at The Boston Globe

On By Dan KennedyIn Media
John Allen

Inés San Martín and John Allen join the “What Works” podcast to discuss the founding of Crux, a digital site that covers all things Catholic, and the “corporate resurrection” that took place three days after The Boston Globe shut it down.

Crux quickly partnered with the Knights of Columbus, a Catholic service organization, and now is a hybrid business model combining nonprofit support, crowd-funding and advertising. That means Crux has much in common with digital local news startups.

Inés San Martín

In our weekly Quick Takes, Ellen shares an update on a high-impact investigative project by Sahan Journal, and Dan discusses the Journalism Competition and Preservation Act, which has bipartisan support on Capitol Hill but is not a perfect solution to the local news crisis.

You can listen to our conversation here and subscribe through your favorite podcast app — as long as it isn’t Spotify. Like a number of musicians and podcasters, we’ve pulled our content from the service out of concern over vaccine disinformation being promulgated by Spotify podcast host Joe Rogan.

Help local news? Sure. Force Google and Facebook to pay? Probably not.

On By Dan KennedyIn Local News4 Comments
Sen. Amy Klobuchar meets a fan in Iowa. Photo (cc) 2019 by Gage Skidmore.

For years now, news executives have been complaining bitterly that Google and Facebook repurpose their journalism without paying for it. Now it looks like they might have an opportunity to do something about it.

Earlier this week a Senate subcommittee chaired by Sen. Amy Klobuchar, D-Minn., heard testimony about the Journalism Competition and Preservation Act (JCPA), sponsored by her and Sen. John Kennedy, R-La. The bill would allow representatives of the news business to bargain collectively over a compensation package with Google and Facebook without running afoul of antitrust laws. If they fall short, an arbitrator would impose a settlement.

“These big tech companies are not friends to journalism,” said Klobuchar, according to an account of the hearing by Gretchen Peck of the trade magazine Editor & Publisher. “They are raking in ad dollars while taking news content, feeding it to their users, and refusing to offer fair compensation.”

There’s no question that the local news ecosystem has fallen apart, and that technology has a lot to do with it. (So do the pernicious effects of corporate and hedge-fund ownership, which has imposed cost-cutting that goes far beyond what’s necessary to run a sustainable business.) But is the JCPA the best way to go about it?

The tech giants themselves have been claiming for years that they provide value to news organizations by sending traffic their way. True, except that the revenues brought in by digital advertising have plummeted over the past two decades. A lawsuit brought by newspaper publishers argues that the reason is Google’s illegal monopoly over digital advertising, cemented by a secret deal with Facebook not to compete.

Though Google and Facebook deny any wrongdoing, the lawsuit strikes me as a more promising strategy than the JCPA, which raises some serious questions about who would benefit. A similar law in Australia has mainly served to further enrich Rupert Murdoch.

Writing at Nieman Lab, Joshua Benton argues, among other things, that simply taxing the technology companies and using the money to fund tax subsidies for local news would be a better solution. Benton cites one provision of the Build Back Better legislation — a payroll tax deduction for hiring and retaining journalists.

In fact, though, the payroll provision is just one of three tax credits included in the Local Journalism Sustainability Act; the others would reward subscribers and advertisers. I have some reservations about using tax credits in a way that would indiscriminately reward hedge-fund owners along with independent operators. But I do think it’s worth a try.

Even though local news needs a lot of help, probably in the form of some public assistance, it strikes me that the Klobuchar-Kennedy proposal is the least attractive of the options now on the table.