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.
Sen. Joe Manchin. Photo (cc) 2017 by Third Way Think Tank.
Sen. Joe Manchin has finally done what he was obviously planning to do all along — he’s killed the Build Back Better bill. Naturally, he made his announcement during an appearance on Fox News.
This is why I was upset with progressives like Reps. Ayanna Pressley and Alexandria Ocasio-Cortez for holding the infrastructure bill hostage until Build Back Better was passed. To what end? Manchin was never going to vote for BBB, no matter how many programs were cut out of it. At least we got the infrastructure bill anyway. But I hate to be right — BBB would have done an immense amount of good.
The protracted process did enormous damage to President Joe Biden’s political standing. He and his advisers need to think about how they got themselves in a position where they rolled all the dice in a very public way on something that was never going to pass.
It’s time also to think about how individual chunks of BBB might be salvaged. It won’t be easy. But the Local Journalism Sustainability Act, part of which had been folded into BBB, stands out as something that has actual bipartisan support. Let’s get it done.
Our faculty at Northeastern University’s School of Journalism recently voted unanimously to support two pieces of legislation aimed at addressing the local news crisis — a bill to make it easier for newspapers to become nonprofit organizations and a resolution that asks Congress to help reverse the decline of community journalism.
The bills were introduced in the House today by U.S. Rep. Mark DeSaulnier, D-Calif., and co-sponsored by Reps. Ed Perlmutter, D-Colo., Jamie Raskin, D-Md., and David Cicilline, D-R.I.
“As local newspapers are being bought up and taken over by large corporations, it is incumbent on Congress to act to protect this public good,” said DeSaulnier in a press release. “My legislation would do just that and ensure newspapers in every community can continue to provide high-quality local coverage that millions of American rely on and deserve.”
Professor Jonathan Kaufman, director of Northeastern’s School of Journalism, said, “The hollowing-out and disappearance of local news organizations imperils journalism, communities and our democracy. These measures provide a financial lifeline and tools for the next generation of journalists to pursue new models and innovation that bring more local news to communities.”
The bills are not related to the Local Journalism Sustainability Act, which would provide tax credits to subscribers, advertisers and publishers. The tax credit that would benefit publishers is part of President Biden’s Build Back Better legislation. DeSaulnier’s bills, by contrast, would address the problem that journalism is not among the activities that qualifies for nonprofit status, even though the IRS has approved such status for many news organizations over the years.
The full press release issued by Rep. DeSaulnier’s office follows.
Congressman DeSaulnier Introduces Legislative Package to Support and Preserve Local Journalism
Washington, D.C. – Today, Congressman Mark DeSaulnier (CA-11), along with his colleagues Congressman Ed Perlmutter (CO-07), Congressman Jamie Raskin (MD-08), and Congressman David Cicilline (RI-01) introduced two pieces of legislation aimed at supporting and protecting local journalism, and honoring its role in bolstering our democracy, holding government accountable, and informing the electorate. The Saving Local News Act (H.R. 6068) would make it easier for newspapers to become non-profits, allowing them the flexibility to focus less on maximizing profits and more on producing quality content. The local news resolution (H.Res. 821) recognizes the importance of local media outlets to society and expresses the urgent need for Congress to help stop the decline of local media outlets.
“Local journalism has been the bedrock of American democracy for centuries. I have seen firsthand how journalists for local newspapers have kept our community informed, educated voters, and held power to account,” said Congressman DeSaulnier. “As local newspapers are being bought up and taken over by large corporations, it is incumbent on Congress to act to protect this public good. My legislation would do just that and ensure newspapers in every community can continue to provide high-quality local coverage that millions of American rely on and deserve.”
“Local and accurate sources of news are becoming more and more important for our community and our country. I believe Congress has a role to play to ensure legitimate media outlets are able to better adapt to the changing media landscape and continue to inform Americans in every community,” said Congressman Perlmutter.
“An informed American public is essential to strong democracy,” said Congressman Raskin. “We cannot allow worldwide propaganda and conspiracy theories to replace hard local news based on local reportage. I’m proud to join Rep. DeSaulnier in introducing this important legislation that will give local news the flexibility it needs to thrive in a dangerously toxic media environment.”
“Over the past 15 years, one in five newspapers have closed, and the number of journalists working for newspapers has been slashed in half. We now live in a country in which at least 200 counties have no local newspapers at all,” said Congressman Cicilline. “This crisis in American journalism has led to the crises we are seeing today in our democracy and civic life. We cannot let this trend continue because if it does, we risk permanently compromising the news organizations that are essential to our communities, holding the government and powerful corporations accountable, and sustaining our democracy. I’m proud to support this resolution and the Saving Local News Act and thank Congressman DeSaulnier for his leadership and partnership in this work.”
“We commend Congressman DeSaulnier for introducing this important piece of legislation that recognizes the importance of nonprofit journalism to the American society. At a time when news deserts are a growing concern, we must ensure that we support all newsrooms in their efforts to provide high-quality journalism to their local communities. This journalism bill that would allow non-profit newsrooms to treat advertising revenue as nontaxable income could be helpful to a number of publishers,” said David Chavern, President and CEO, News Media Alliance.
“Community newspapers are exploring many new models for sustainability. Our newsrooms realize that without us, whole communities will lose their center of gravity. A nonprofit model is one that can work in some communities, but just establishing this status isn’t enough to keep the doors open and journalists at work. The need for revenue from a variety of sources, including local advertisers, remains acute. NNA supports the Saving Local News Act and thanks Congressman DeSaulnier for his work on behalf of local communities,” said Brett Wesner, Chair, National Newspaper Association and Publisher, Wesner Publications, Cordell, OK.
“Honest, truthful reporting is essential to informing our democracy at all levels. Without it, we won’t remain a nation of the people, by the people, for the people. Bills that help sustain local reporting that informs people about what their government representatives are up to, will help keep the citizens in charge of our country,” said George Stanley, President of the News Leaders Association.
“News organizations are looking at multiple ways to fund their organizations while continuing to deliver local journalism that is fundamental to a thriving Democracy. If news organizations want to pursue the nonprofit business model; it should be as accessible for established organizations as it is for news startups. Our members are known and trusted in the communities they serve and removing the hurdles to find philanthropic support would allow newsrooms to focus on serving their communities,” said Brandi Rivera, Publisher, Santa Barbara Independent and Board Member, Association of Alternative Newsmedia.
“Community newspapers are woven into the fabric of American society and provide accurate and trusted information that improves the lives of individuals in the communities they serve. It is no secret that newspapers face an increasing number of existential threats from online competitors which have left them with a decreasing number of revenue opportunities. This measure would provide news organizations with the means to better rise to these challenges and continue to play a vital role in their communities by holding the feet of the powerful to the fire and giving voice to the powerless,” said Jim Ewert, General Counsel, California News Publishers Association.
“Free Press Action supports this important legislation and applauds Congressman DeSaulnier for recognizing the importance of building, supporting and sustaining local nonprofit news operations,” said Craig Aaron, President and co-CEO of Free Press Action. “In too many places, corporate media have shrunk newsrooms or abandoned communities entirely. Nonprofit news has emerged as the future of local journalism, and it’s our best hope for keeping reporters on the beat focused on the needs of local communities, serving communities of color, and reaching so many people who have never been well served by the media. This bill will remove obstacles to nonprofit journalism, help launch more of these outlets, encourage more existing outlets to go nonprofit, and create more of the kind of high-quality journalism we need to inform our communities and keep our democracy thriving.”
“The hollowing-out and disappearance of local news organizations imperils journalism, communities and our democracy. These measures provide a financial lifeline and tools for the next generation of journalists to pursue new models and innovation that bring more local news to communities,” said Professor Jonathan Kaufman, Director of the Northeastern University School of Journalism.
“The health of the news industry is so precarious, all efforts to strengthen an industry so instrumental to democracy are well received. Thanks to Rep. DeSaulnier for stepping up,” said Jody Brannon, Ph.D., Director of the Center for Journalism and Liberty at the Open Markets Institute.
“The U.S. tax code needs this important update to make it easier for nonprofit news organizations to grow across our country. We’ve lost tens of thousands of local journalists over the last decade. That’s meant fewer journalists covering local government meetings, local business and even high school sports. Journalists are essential to holding power to account, watching over our democracy and providing a voice to the voiceless. We applaud Rep. DeSaulnier’s support of journalism. Our country was founded under the principle that a free press was the best way to make sure we have a robust democracy by having an informed electorate. We all have to fight now to save local news,” said Jon Schleuss, President of NewsGuild-CWA.
“The newspaper business model is broken. At a time when local journalism has never been more essential, journalists are losing their jobs across the country, leaving important stories untold. Compelling, original journalism does continue to drive significant advertising revenue—just not for newspapers. Big Tech giants, like Google and Facebook, have used their monopoly power to capture huge swaths of the digital advertising market, making it nearly impossible for many papers to chart a path forward in the digital age. This has allowed hedge fund vulture capitalists to scoop up scores of newspapers across the country—all of whom have been reduced to shadows of their former glory by a short-sighted cut, cut, cut approach. We welcome and applaud efforts to help news outlets continue to cover of the communities they serve. This legislation will create a path that communities can use to save their local papers. Local news is a key piece of American democracy, and while addressing the underlying problems Big Tech has created for journalists is complex, we have to do everything we can to allow for news to thrive,” said the Save Journalism Project.
“PEN America applauds the introduction of the Saving Local News Act – and the accompanying resolution on the importance of local news – as a welcome and needed step to support America’s journalism ecosystem. By making it easier for news organizations to become nonprofits, Congressman DeSaulnier’s legislation will open up a sustainable financial pathway for quality local journalism, recognizing its value as a public good. Enacting this bill will strengthen a fundamental pillar of our democracy, encouraging diverse reporting, civic engagement, and access to essential community information,” said Nadine Farid Johnson, Washington director of PEN America.
Since 2017, estimated daily newspaper circulation fell 11 percent from the previous year (Pew Research Center). Congressman DeSaulnier established a working group of dedicated Members of Congress from areas affected by a drought of high-quality journalism. Together they have been working to highlight this crisis and bring attention to the need to promote local journalism, including by holding a Special Order on the floor of the U.S. House of Representatives and introducing the Journalism Competition and Preservation Act (H.R. 1735), a bill to create a temporary safe harbor from anti-trust laws to allow news organizations to join together and negotiate with dominant online platforms to get a fair share of advertising profits.
Congressman DeSaulnier’s bill and resolution are supported by: News Media Alliance, National Newspaper Association, News Leaders Association, Association of Alternative Newsmedia, California News Publishers Association, Free Press Action, Faculty of the School of Journalism at Northeastern University, Local Independent Online News (LION) Publishers, Save Journalism Project, PEN America, Center for Journalism and Liberty at the Open Markets Institute, and NewsGuild-CWA.
Sen. Joe Manchin. Photo (cc) 2017 by Third Way Think Tank.
The Local Journalism Sustainability Act (LJSA), which I’ve written about rather obsessively here, is built upon the foundation of a three-legged stool: a tax write-off for individuals of up to $250 for subscription fees or donations to local news organizations; a tax credit for advertisers in local news outlets; and a payroll tax credit for publishers that hire or retain journalists.
Now the payroll credit has been carved out and added to the Build Back Better bill, which has passed the House and now faces uncertain prospects in the Senate. Marc Tracy reports in The New York Times that the provision would add up to nearly $1.7 billion over the next five years for newspapers, digital operations and broadcast operations.
Tracy notes — rather huffily, if I’m reading him accurately — that large newspapers like the Times would be excluded because they employ more than 1,500 in one location, but giant newspaper chains such as Gannett and those owned by Alden Global Capital would stand to benefit. As I’ve said before, I wish there were a way of restricting the benefits to independent owners; still, this strikes me as worth trying.
What I’m more concerned about is the political wisdom of adding just one part of the LJSA to Build Back Better, which — despite the optimism voiced by President Biden and other Democratic leaders — could be doomed given the seemingly endless demands made by Democratic Sens. Joe Manchin and Kyrsten Sinema.
There is at least some bipartisan support for the LJSA. Moreover, the tax write-off for subscriptions and donations strikes me as more interesting and creative than simply handing money to publishers for not laying people off. If Build Back Better passes, it will be with just 50 Democratic votes and Vice President Harris breaking the tie — and at that point it seems likely that the other two legs of the stool would disappear. If Build Back Better goes down to defeat, proponents of the LJSA will have to start from scratch.
Even so, the benefits that would be provided by the payroll tax credit are not insignificant. Art Cullen, editor of Iowa’s Storm Lake Times, tells The New York Times that the credit would mean $200,000 in just the first year for his struggling newspaper. “We’d be walking in tall cotton,” he’s quoted as saying. (Ellen Clegg and I spoke with Cullen recently on our podcast, What Works: The Future of Local News.)
Providing government assistance to journalism is fraught with concerns about the First Amendment and the need for an independent press. Yet journalism has always benefited from government help, starting with postal subsidies in the late 1700s. The LJSA is worth trying. I just hope that Democratic leaders haven’t outsmarted themselves by splitting up a bill that stood a decent chance of passing and grafting it onto a large package that they just can’t seem to get done.
In our latest “What Works” podcast, Ellen Clegg and I speak with Chris Lovett, the just-retired anchor of Boston’s Neighborhood Network News. Topics we discuss include highlights from Lovett’s long career and his views on whether local access cable could help solve the community journalism crisis.
A Dorchester native, he’s interviewed local activists, politicos (including Tom Menino when he was a district city councilor) and neighborhood stalwarts. Lovett had a front-row seat as the changing media landscape shaped Boston, and he connects the dots between Menino’s early days as a frequent broadcast guest and Michelle Wu’s strategic use of social media. He has also shared his expertise with any number of Boston University students. And he’s not done with journalism yet, so stay tuned.
We also kick around the latest on the Local Journalism Sustainability Act and the NewsMatch program, introduced by the Institute for Nonprofit News, which matches donations to nonprofit news organizations and has proved to be an important source of revenue.
Please give us a listen — and subscribe via Apple Podcasts, Spotify or wherever fine podcasts are found.
Original item: You can never take anything for granted. Until recently, though, it seemed like a reasonably good bet that Congress would pass the Local Journalism Sustainability Act, which would provide tax credits for subscribers, publishers and advertisers for five years. The idea was to bolster the bottom line of community newspapers, radio stations and television outlets while giving them some time to figure out a path to financial sustainability.
Last week, though, the House dropped the $1 billion measure from its version of the reconciliation bill. So now it’s up to the Senate to restore it to the $1.75 trillion Build Back Better legislation, meaning that the fate of local journalism rests in the unsteady hands of Sens. Joe Manchin and Kyrsten Sinema.
Rick Edmonds of Poynter, who has all the details, wrote that the bill now “faces a giant hurdle” — and that was on Tuesday, before the election returns from Virginia panicked the already-jumpy Democrats. You’d like to think that the Republican resurgence would focus the Democrats’ minds on the need to get something done, but it will probably have the opposite effect. And with Manchin and Sinema, who knows?
I’m what you might call a skeptical supporter of the legislation. Although the assistance would be indirect enough not to threaten journalistic integrity, I’m troubled by the prospect of corporate chain owners lining up at the trough. Ideally, federal help should foster independent local news organizations while letting the very owners who helped create this mess figure things out for themselves.
Still, it’s worth giving it a try on a temporary basis. As Steven Waldman, chair of the Rebuild Local News Coalition, puts it, “The cost is miniscule compared to the rest of the Build Back Better package — less than 0.1% of its total. But this provision is the only thing in the bill that would help save democracy.”
The Boston Globe’s Jeff Jacoby devoted his Sunday column to laying out his case against the Local Journalism Sustainability Act, which is aimed at easing the community news crisis through a series of federal tax credits. Jacoby’s opposition was no surprise, but I think it’s worth taking a look at his two major objections. One of them ought to be taken seriously; the other is grounded solely in his own boutique political philosophy.
The act would become law if it is included in the final reconciliation bill now being considered by Congress, assuming that Sens. Joe Manchin and Kyrsten Sinema will allow it be dragged at long last across the finish line. Here is a good overview of the bill by Steve Waldman, a founder of the Rebuild Local News Coalition. It would provide three tax credits for a five-year period, giving local news organizations some runway as they figure out how to transition to the confounding economic realities of the digital era:
News consumers would be able to write off $250 a year that they spend on subscriptions or on donations to nonprofit news organizations.
News organizations would receive tax benefits for hiring or retaining journalists.
Local small businesses would receive tax credits for advertising in local newspapers and news websites and on television and radio stations.
Jacoby’s argument is that tax credits amount to government subsidies, and even though these would be indirect, they could still be wielded by government officials to reward their friends and punish their enemies. “Government subsidies, almost by definition, are antithetical to the spirit of an independent press and the First Amendment,” Jacoby writes. “A newspaper that takes money from the government is apt to pull its punches when it covers that government — especially if it grows addicted to tax breaks that will have to be renewed every few years.”
There’s no question that could be a problem. The optimistic view is that the tax subsidies will end after five years, so there’s not much incentive for news organizations to soft-pedal their coverage. But I can easily envision a lobbying effort to extend those tax breaks, and then you end up in exactly the situation that Jacoby warns against.
There’s also the possibility that news organizations, especially those owned by corporate chains and hedge funds, will not use the five years wisely by making the kinds of investments that might move them toward financial sustainability, like customer-focused digital products, seamless payment systems and newsrooms robust enough to be produce journalism that people will be willing to pay for. (All steps, by the way, that Jacoby’s employer has taken to good effect.) Instead, they’ll just pocket the savings and ask for more. These are real concerns.
Here Jacoby has identified what many of us would regard as the flaw in his argument, because the tax credits envisioned in the Local Journalism Sustainability Act are not materially different from those granted to nonprofit news organizations in general. From PBS to nonprofit hyperlocal websites, nonprofit status enables donations to be tax-deductible and enables the news organizations themselves to avoid paying taxes.
Jacoby appears to be taking a more extreme position now than he has in the past. In his current column, he writes that he opposes tax credits for public broadcasting, which seems to go a step beyond his previous position: In 2011 he called for an end to direct government payments to public broadcasting, arguing that the system would do fine without such payments. There is nothing in that column to suggest he opposes the indirect government benefits that public media receive as a consequence of their nonprofit status.
As I’ve written before, I think it’s worth taking a chance on the Local Journalism Sustainability Act. Although there are some hazards, a few of which Jacoby has identified, overall it strikes me as a worthwhile response to the decline of community journalism.
The challenge in providing government assistance to ease the local news crisis is to find ways of helping those who really need it while keeping the bad actors out. Which is why Martha Minow said this week that she’s “hopeful” but “fearful” about a federal bill that would create tax credits to subsidize subscribers, advertisers and news organizations.
“What I’m troubled about is: What’s local news, who defines it and how do we prevent the manipulation of this by multinational corporations?” she said. “That’s a problem, and I don’t know anyone who’s come up with an answer for that.”
Minow, a Harvard Law School professor, is the author of the recently published “Saving the News: Why the Constitution Calls for Government Action to Preserve Freedom of Speech.” The book lays out a series of ideas for reviving journalism, from requiring social media platforms to pay for content to providing subsidies for nonprofit news. She spoke Monday at a local book group that met virtually.
The legislation Minow was referencing, the Local Journalism Sustainability Act, has attracted an unusual amount of bipartisan support and seems to stand a decent chance of becoming law. Those who wrote the proposal included limits on the size of news organizations that would be eligible, but the large corporate chains that own many of them would not be blocked from applying. That’s problematic given that chains and hedge funds are squeezing the life out of local news.
Minow, though, was referring to a different phenomenon — “sham” local news organizations that “shill for who knows what.” Although Minow did not use the term, such sites are purveyors of what is known as “pink slime” journalism, which look like community sites but are in reality vehicles for political propaganda. Those who operate such projects have taken advantage of the opening created by the precipitous decline of legitimate local news organizations in recent years by launching hundreds of such sites — most of them on the political right, but some on the left as well. One suggestion Minow offered was to limit government assistance to news organizations whose journalists live in the communities they cover.
Much of “Saving the News” is devoted to the proposition that government has always been involved in subsidizing journalism, from low postal rates to the development of the telegraph, from regulating radio and television to investing in the internet. Given that activist history, she writes, it would be derelict for the government not to step in. She quotes Supreme Court Justice Hugo Black, who in 1945 wrote that “it would be strange indeed … if the grave concern for freedom of the press which prompted adoption of the First Amendment should be read as a command that the government was without power to protect that freedom.”
Her proposals fall under three broad categories:
• Regulating Facebook and other social media platforms “subject to duties and expectations commensurate with their functions and their powers.” That would include not just requiring them to pay news organizations for the content they use but also regulating them as public utilities and subjecting them to antitrust enforcement;
• Fighting misinformation and disinformation through “public and private protections against deception, fraud, and manipulation and bolstering the capacities of individuals and communities to monitor and correct abuses and demand better media and internet practices”;
• Using the power of government to “support, amplify, and sustain a variety of public interest news sources and resources at the local, regional, and national levels.”
“With the entire project of democracy in danger, federal, state, and local governments can and indeed should be obliged to act — while remaining as neutral as possible toward content and viewpoint in private speech,” Minow writes. “If judicial readings of the First Amendment prevent such actions, the courts would be turning the Constitution into a suicide pact.”
In a time of intense polarization, Minow said this week that she hopes reviving local news can help bring communities together. Noting that studies have shown corruption rises and voting rates drop in the absence of reliable local journalism, she said, “There’s less polarization in local communities for obvious reasons. People have to get along, they have to get the snow plowed.”
Minow comes by her interest in reliable news and information naturally: Her father, Newton Minow, is a former chair of the FCC best known for calling television “a vast wasteland.” His daughter’s book is a useful compendium of why we need to take steps to save local news — and what some of those steps might look like.
Can government help solve the local news crisis? The notion sounds absurd, even dangerous. You get what you pay for, and if government officials are funneling money to media outlets, then it’s not unreasonable to expect that they’ll demand sticky-sweet favorable coverage in return.
Yet the situation is so dire that once-unthinkable ideas need to be on the table. Since 2004, some 2,100 newspapers have closed, leaving about 1,800 communities across the country bereft of coverage. About 30,000 newsroom jobs disappeared between 2008 and 2020. The consequences range from the potential for increased corruption to a decline in voter turnout for local elections.
Now federal legislation long in the making may finally be ready to move ahead. Believe it or not, the bill is bipartisan. It also manages to avoid the entangling alliances that would endanger journalistic independence. That’s because the Local Journalism Sustainability Act, introduced in the Senate last week and in the House a month earlier, relies on tax credits rather than direct government assistance.
“This clever, bipartisan bill would provide more help for local news than any time in about a century, yet it’s done in a very First-Amendment-friendly way,” writes Steven Waldman, the co-founder of the Rebuild Local News Coalition as well as the co-founder and president of Report for America. (Disclosure: Report for America, which places young reporters at news organizations around the country, is part of the GroundTruth Project, affiliated with GBH in Boston.)
So how would the bill work? Essentially, it would provide three tax credits that would expire after five years, giving media outlets some runway to move toward long-term sustainability. I am oversimplying, but here is the rough outline:
• News consumers would be able to write off $250 a year that they spend on subscriptions or on donations to nonprofit news organizations.
• News organizations would receive tax benefits for hiring or retaining journalists.
• Local small businesses would receive tax credits for advertising in local newspapers and news websites and on television and radio stations.
The benefits would be restricted to small news organizations, defined as those with 750 employees or fewer in the House bill or fewer than 1,000 in the Senate bill.
At a time when Congress seems incapable of doing anything, some version of the bill appears to stand a good chance of passing. After all, elected officials, regardless of party or ideology, like to be covered by the hometown press, and the bill would help ensure that there will continue to bea press. As of Tuesday, there were 32 co-sponsors in the House — 25 Democrats and 7 Republicans. Because the Senate version was just introduced, the only co-sponsors so far are the three Democrats who introduced it — Maria Cantwell of Washington state, Ron Wyden of Oregon and Mark Kelly of Arizona.
Among the all-Democratic Massachusetts delegation, Sen. Ed Markey will support the bill and has asked to be a co-sponsor, says Markey spokeswoman Giselle Barry. Sen. Elizabeth Warren is studying the legislation and has not yet stated a position, according to Warren spokeswoman Nora Keefe. On the House side, Reps. Jim McGovern and Seth Moulton are co-sponsors, and Mary Rose Tarpey, a spokeswoman for Rep. Stephen Lynch, says that Lynch will also be a co-sponsor, as he was during the previous session.
Government assistance for news is not new. During the early days of the republic, postal subsidies were the foundation upon which the distribution system for newspapers and magazines was built. Today, nonprofit news organizations ranging from hyperlocal websites to public broadcasters benefit from tax incentives that allow their donors to write off the money they give and that exempts the media outlets themselves from having to pay taxes.
Given the catastrophic state in which journalism finds itself, some activists and scholars are calling for more direct funding of news. For instance, Victor Pickard, a scholar at Penn’s Annenberg School, advocates much higher government spending on public media. Longtime media reformer Robert McChesney has talked about giving as much as $35 billion over five years to elected citizens councils that would fund local news and underwrite startups.
But there are dangers in such approaches. In Pennsylvania, for instance, the Republican-dominated legislature cut off $750,000 to the state’s seven public radio and television stations after one of them, WITF Radio of Harrisburg, began calling out any elected official who continued to challenge the validity of President Joe Biden’s electoral victory.
Philadelphia Inquirer columnist Will Bunch, while conceding there was no evidence of a direct cause-and-effect over what was admittedly a small amount of funding, wrote in his weekly newsletter that the action “shows the enormous peril of government dollars for journalism, even as a partial solution. In an era when a growing number of elected officials are waging war on the truth, from election results to coronavirus vaccines, would journalists be forced to choose between an important story or their survival?”
By contrast, the federal bill under consideration avoids those problems by putting as much distance as possible between elected officials and the aid that news organizations would receive.
My one reservation about the bill is that chain-owned newspapers would benefit along with independent projects. That said, the Rebuild Local News Coalition, whose members represent more than 3,000 newsrooms, includes some of the most public-spirited organizations that are working on these problems, such as LION (Local Independent Online News) Publishers, the Lenfest Institute and the Solutions Journalism Network.
Perhaps the problem of chain ownership could be addressed, as Waldman proposes, by giving tax breaks to the likes of Gannett and Alden Global Capital if they sell their papers to local nonprofits and public benefit corporations. I would also suggest tax penalties if they decline to do so. Corporate ownership is killing local news just as surely as technological change and the aftermath of the COVID pandemic, and we need to get the publicly traded corporations and hedge funds out.
At a time when political and cultural polarization at the national level is tearing us apart, local news can help encourage the kind of civic engagement we need to rebuild community. But that can’t happen if the newspaper has gone out of business or is on life support, and if nothing else has come along to take its place.
Fundamentally, what’s at issue is that the advertising model that paid for journalism until recent years has collapsed. Publishers need to find a way forward, whether through reader revenue, nonprofit funding, paid events or even starting a bar and wedding venue next to the newsroom, as The Big Bend Sentinel in West Texas did.
The Local Journalism Sustainability Act will help sustain local news while we search for a workable model that doesn’t rely on advertising. After 15 years of declining revenues and dying newspapers, it may be our last chance to get it right.
Bipartisan legislation has been introduced in Congress that would provide some government support for local news. The ubiquitous Steve Waldman, the co-founder of Report for America and the chair of the Rebuild Local News Coalition, writes that the bill “would provide more help for local news than any time in about a century, yet it’s done in a very First-Amendment-friendly way.”
Waldman has the details, so I’ll just hit the highlights:
It would provide a tax credit of up to $250 each year for subscriptions or donations to local news — a measure Waldman has been talking about for quite a while.
Payroll tax credits would be available to publishers for hiring or retaining journalists.
Small businesses would receive a tax credit for advertising in local news outlets.
The bill, known as the Local Journalism Sustainability Act, is co-sponsored by Reps. Dan Newhouse, R-Wash., and Ann Kirkpatrick, D-Ariz.
My reservation about this legislation is that would benefit chain-owned papers as much as it would independent papers and websites. I guess that’s OK, and it’s hard to imagine how to cut out the corporations while keeping benefits for independents. But I’m concerned that the legislation might freeze in place the advantage already held by corporate-owned legacy outlets without providing them much in the way of an incentive to improve their journalism.
On the other hand, I agree with Waldman that the legislation is ingenious in the way that it would provide government support for local news without making news organizations dependent on currying favor with the very people they’re covering. Another smart move: benefits would be limited to organizations with fewer than 750 employees, which would leave out the large national newspapers.
Overall, it’s a pretty interesting step that might help ease the local news crisis. I don’t see this as a comprehensive solution, but even a boost on the margins would help.
