By Dan Kennedy • The press, politics, technology, culture and other passions

Tag: New York

Illinois nears enactment of tax credits and other measures to boost local news

Illinois Gov. J.B. Pritzker. Photo (cc) 2018 by SecretName101.

The state of Illinois has taken a major step forward in trying to ease the local news crisis, with the legislature approving tax credits for publishers to hire and retain journalists; creating a 120-day cooling-off period to slow the sale of independent local news outlets to out-of-state chains; and funding scholarships for students who work at an Illinois news organization for at least two years after graduation.

Mark Caro reports for Northwestern University’s Local News Initiative that the tax credits amount to a modest $25 million over five years, but he quotes state Sen. Steve Stadelman as saying that the measure nevertheless represents a good start. “It was a tight budget year for Illinois, which always makes it difficult to pass legislation,” Stadelman, a Democrat, told Caro. “Was it as much as I wanted? No. But it showed that there’s a commitment by the state of Illinois to local journalism, and that’s significant.”

Gov. J.B. Pritzker is expected to sign the bill.

A couple of points I want to raise.

• The legislation grew out of the state’s Local Journalism Task Force, which was created by Gov. Pritzker in August 2021. Stadelman chaired that bipartisan group. Illinois was the second state to create a commission to study the local news crisis and make some recommendations. The first, you may recall, was Massachusetts; I had a hand in drafting the legislation that created it and would have been a member. But the Massachusetts commission, signed into law by then-Gov. Charlie Baker in January 2021, never got off the ground. There are some favorable rumblings coming out of Beacon Hill, though, and I hope to have better news to report at some point later this year.

• The Illinois tax credits avoid some pitfalls that developed almost immediately after New York State approved $90 million over three years. The New York credits are currently being implemented through an administrative process, and Gothamist reported recently that it’s not clear whether nonprofits and digital-only media outlets would be included, even though some prominent proponents understood that that they would be. The language is also contradictory as to whether out-of-state chains would be able to take advantage of the credits.

By contrast, the language of the Illinois legislation makes it clear that nonprofits and digital-only projects are included and that out-of-state chains are excluded.

The Illinois bill represents just part of a comprehensive package that was unveiled last February. As Caro reports, the Stadelman bill originally called for state agencies to spend half or more of their ad budget on local news outlets, but that provision was dropped.

In addition, a separate bill that would have required Google and Facebook to pay for the news that they repurpose has been put on hold depending on how things go with a similar measure in California. Forcing Big Tech to hand over some of their profits sounds appealing, but it hasn’t been working out very well elsewhere, as Facebook is getting rid of much of its news content and Google is threatening to walk away from the modest assistance it provides to journalism, such as the Google News Initiative.

Any form of government assistance for journalism has to be evaluated for whether it compromises the independence that news outlets need in order to hold public officials to account. Still, the modest action being taken in Illinois seems worth trying, at least on an experimental basis.

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Confusion reigns as regulations are drafted for that NY local news tax credit

State Capitol building in Albany, N.Y. Photo (cc) 2015 by Marcela.

A three-year, $90 million appropriation to boost local news in New York State is sparking a contentious battle over who is eligible and who isn’t, according to an article by Jon Campbell of Gothamist.

As originally touted by its supporters, the program was supposed to provide subsidies to offset the cost of hiring and retaining journalists at all manner of news organizations — print, digital and broadcast, for-profit and nonprofit. Now much of that is up in the air — so much so that Campbell says the only sure thing is that it would cover all or most for-profit print newspapers. Campbell writes:

As crafted, the law largely excludes many local news outlets it purports to support — aside from for-profit print newspapers — due to a crush of last-minute negotiations in the days before the budget passed. Those led to a final version that excluded most TV broadcasters and many commercial radio stations….

Also excluded were nonprofit news outlets, which were never included in the first place — to the surprise of some leading supporters who were convinced otherwise.

If nonprofits aren’t eligible, that represents a significant reversal of a principle everyone thought they understood. Indeed, Steven Waldman, president of Rebuild Local News and a prominent supporter of nonprofit journalism, praised the appropriation shortly after it was approved in late April. Now he tells Gothamist that leaving out nonprofits would be a major mistake.

“We missed something all along here, and it was never quite set up the way any of us thought it was,” Waldman is quoted as saying. He added: “Nonprofits — including both websites, news services and local public radio — are crucially important parts of the local news ecosystem. We will definitely work to get them included in future revisions.”

What about for-profit digital-only news projects? Unclear. What about newspapers owned by publicly traded corporations, such as Gannett? They are excluded under one provision but seemingly included in another — a contradiction first reported by Richard J. Tofel, writing in his newsletter, Second Rough Draft. As for broadcast, Gothamist reports that they may have been left out by mistake. Or not.

The rules governing how the money will be distributed are still being drafted by the state, so it’s possible that the final product will look something like what Waldman and others were celebrating just a few weeks ago. At a minimum, the system should not favor print over digital or for-profit over nonprofit. Excluding corporate chains that have deliberately hollowed out their papers, such as Gannett, makes sense, too.

Whether we’ll get there or not remains to be seen. And, frankly, what’s happening in New York ought to be regarded as a warning for what can happen when the government gets involved in helping to solve the local news crisis.


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

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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Show us the money: NYC’s innovative approach to funding local news

New York Mayor Bill de Blasio. Photo (cc) 2010 by Public Advocate Bill de Blasio.

One of the more vexing dilemmas in thinking about ways that the government can help ease the local news crisis is how to maintain independence between the dog and the watchdog.

It’s not easy. Nonprofit status brings with it tax advantages that amount to an indirect benefit. Steven Waldman, the co-founder of Report for America, has proposed a $250 refundable tax credit to pay for local news subscriptions or to donate to nonprofit media outlets. Such approaches, though useful, fall far short of what’s needed.

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In New York, Mayor Bill de Blasio has come through with something much more direct and substantial: a vast increase in what the city spends on advertising in community newspapers and websites. As a result of his executive order in May 2019, city agencies must devote 50% of their print and digital ad budgets to such outlets. According to a study of the initiative by CUNY’s Newmark School of Journalism:

In its first year of implementation, the executive order far outperformed its own expectations, delivering 84 percent of the budget, nearly $10 million, to more than 220 outlets serving New Yorkers in every neighborhood in all five boroughs in 36 languages besides English.

Keep in mind that Facebook recently announced that it would set aside just $5 million to help local news organizations across the entire country — only if they would agree to set up shop on Facebook, of course.

In a commentary for The New York Times, Newmark Dean Sarah Bartlett and Julie Sandorf, Charles H. Revson Foundation, president of the Charles H. Revson Foundation, wrote that de Blasio’s program has had a dramatic effect. For instance, Brooklyn’s Haitian Times, which nearly went out of business in 2013, received $73,489 in advertising revenues from the city and was able to continue covering its community during the COVID pandemic. Bartlett and Sandorf add:

The federal government has an advertising budget of $5 billion, so a program like New York City’s could provide an enormous boost to community news organizations at a time when local journalism around the country is in crisis.

A program such as New York’s doesn’t provide the true firewall that would be needed to ensure that news organizations aren’t slanting their coverage in order to keep the money rolling in. City officials could cut back or eliminate spending on media outlets whose coverage has offended them. Community groups that are insulated from politics could be charged with making the spending decisions, but those have their own biases.

Still, give de Blasio credit for finding a way to help local news organizations at a time when viable solutions are few and far between.

‘Moguls’ world tour coming to New York and Cape Ann

I’m very excited to let you know that I’ll be the keynote speaker at the annual conference of the American Association of Newspaper Distributors, or AAIND, in New York at noon this coming Thursday, May 3.

On Sunday, May 6, I’ll be part of a free panel discussion called “Journalism in the Age of Fake News and Truth Telling,” to be held at 3 p.m. at the Rockport Public Library, 17 School St. The event is being sponsored by Literary Cape Ann. A book signing will follow.

A complete list of events is online here.

The fatal decision was made before the chokehold

It seems to me that we’re looking at the wrong thing in thinking about the death of Eric Garner. It wasn’t the chokehold — it was the police officers’ decision to use overwhelming force to enforce a ridiculous law that no one cares about. Once that decision was made, there was no predicting what the outcome would be.

I’m sure Officer Daniel Pantaleo didn’t mean to kill Eric Garner. But he and his fellow officers certainly meant to take him down. And for what?

And yes, it is inconceivable that Pantaleo and perhaps other officers weren’t charged with something by the grand jury for their horrendous judgment. Criminal negligence perhaps?

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