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

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.

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

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

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

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

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

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.

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.