Richard J. Tofel – Media Nation

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.

Earlier:

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

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

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

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

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

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

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

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A billionaire owner is fine as long as it’s the right billionaire

I’ve been defending billionaire media owners of late, noting that, despite the recent backlash, The Washington Post, The Boston Globe, the Star Tribune of Minneapolis and others are far better off for being owned by the ultra-wealthy than they otherwise would be. So let me recommend Richard J. Tofel’s latest post about an owner who is unfortunately turning into a glaring exception — Patrick Soon-Shiong, who is currently in the process of dismanting the Los Angeles Times. Tofel writes:

What has already happened in LA — and the worst for the Times is likely ahead, as it’s hard to see how the paper hasn’t now been launched into a downward spiral — is not so much a refutation of the notion that rich people can save important publications as a reminder that it matters which rich people are involved.

Exactly.

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Why concerns about the Portland Press Herald’s funding are overblown

Recently Max Tani of Semafor and Richard J. Tofel, who writes the newsletter Second Rough Draft, have raised questions about whether the folks involved in the purchase of the Portland Press Herald and its affiliated Maine papers from the retiring publisher, Reade Brower, have been sufficiently transparent in disclosing who the funders are.

The papers were bought during the summer by the National Trust for Local News, a nonprofit that has been involved in several acquisitions aimed at preventing legacy newspapers from falling into the hands of corporate chain ownership. In Maine, Tani and Tofel argue, the billionaire George Soros may have been more deeply involved than was previously known, while the involvement of another billionaire who was reportedly part of the purchase, Hansjörg Wyss, hasn’t been disclosed at all.

I’m going to go out on a limb and say that this is essentially a non-issue. Tofel himself notes that the previous management of the papers remains in place and that “invocations of Soros as a sort of bogeyman have long since become a principal way to dog whistle anti-Semitism; it ranks right up there with ‘globalist’ in this rhetoric.”

More to the point, the Press Herald itself followed up on Tani’s reporting, and it sounds like the full story behind the purchase will be revealed soon. (I was interviewed for the piece, written by reporter Rachel Ohm.) Longtime Press Herald publisher Lisa DeSisto, now the CEO and publisher of the Maine Trust for Local News, the nonprofit that has been set up to own the papers, is quoted as saying, “We want to make more of a splash and have a more comprehensive introduction to the Maine Trust rather than just [putting things out in] pieces. We’re really waiting to announce a broader vision.”

Added Will Nelligan, who’s the Maine project lead for the National Trust: “We will announce that coalition of Maine funders when we announce the Maine Trust.”

No, the announcement didn’t come in September, as had been originally promised. But is that really a big deal as long as disclosure is on its way? The papers themselves, by the way, remain for-profit entities, so it seems unlikely that either the National Trust or the Maine Trust will be looking for ongoing support to prop them up.

If you take a look at the National Trust’s funders, you’ll see that, in addition to Soros’ Open Society Foundations, they include a number of respected journalism funders, including the Knight Foundation, the MacArthur Foundation, the Democracy Fund and the Lenfest Institute, which owns The Philadelphia Inquirer. The Gates Family Foundation, by the way, is a Colorado-based philanthropy that has nothing to do with Bill or Melinda Gates.

When I asked University of Maine journalism professor Michael Socolow to weigh in, he emailed me comments he had previously posted on X/Twitter, noting that Tani and Tofel had emphasized Soros’ and Wyss’ liberal politics but adding they had been unable to back up whether that was relevant. (To be fair, Tofel seemed less impressed with that angle than Tani.) Socolow said:

I’m not sure there’s a story here. Neither Tani nor Tofel specify the ways the new ownership has altered editorial content. They’re seemingly insinuating that the new ownership purchased the newspapers to shape news content for partisan political reasons. But how much disclosure and transparency about Reade Brower and his business interests did these publications publish before the sale? It’s not clear to me why there needs to be a new, and apparently higher, standard simply because the ownership is now non-profit versus commercial. If evidence emerges that the sort of meddling Tani and Tofel insinuate begins occurring, then I agree we have an important story. But we’re not there yet.

Let me end with a couple of disclosures: Ellen Clegg and I interviewed National Trust co-founder and CEO Elizabeth Hansen Shapiro on our podcast, “What Works: The Future of Local News,” and we wrote about the National Trust’s successful effort to save two dozen community newspapers in the Denver suburbs in our forthcoming book, “What Works in Community News.” I worked with DeSisto at The Boston Phoenix and Ellen later got to know her at The Boston Globe, and we both consider her to be a first-rate, ethical news executive.

The purchase of the Press Herald papers by the National Trust was unalloyed good news, and it sounds like the questions that Tani and Tofel have raised will be answered soon.

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Questions and concerns about Press Forward’s plan to raise $500 million for local news

It’s been a week since Press Forward, a $500 million initiative to fund journalism, was announced by the 22 organizations that will contribute money. Because it’s not clear exactly how it’s supposed to work, I’ve said little about it. Now, is this a Good Thing? Yes. A half billion dollars is a lot of money, and, if applied properly, could accomplish quite a bit of good. Despite the rise of independent, community-based news organizations in recent years, the need remains great.

But a few cautions seem to be in order, too. For those, I refer you to Richard J. Tofel, who writes the Second Rough Draft newsletter and is the retired president of ProPublica — a large investigative nonprofit whose mission has been underwritten by large sums of donated money. Perhaps the most intriguing tidbit in Tofel’s piece about Press Forward is that the $500 million, to be spread out over five years, is not really $500 million. He explains:

The big press release claimed that the initiative commits “more than $500 million” to local journalism. But what it didn’t say is that not all of that funding is new. I know of at least four Press Forward funders out of the 22 announced who are in fact not making funding commitments beyond those they had already planned. To be fair, I have also confirmed that at least four other funders, including the two largest, are making incremental commitments.

Tofel does not offer any numbers on exactly how much of the $500 million isn’t new money, but it’s a little disheartening to think that the funders — which include some big names like the Knight Foundation, the MacArthur Foundation and the Lenfest Institute — decided that making a big splash was more important than laying out precisely how much money will raised.

Tofel offers a number of other cautions, including the hazards of top-down funding, the negative effect that the initiative has already had on other journalism fundraising efforts, and an announcement made with such haste that no one seemed to realize that there’s already a well-known organization in Canada called Press Forward that’s devoted to more or less the same mission. Let the confusion begin!

To Tofel’s concerns let me add a few of my own. My first worry is that a lot of money is going to be lost or wasted on local efforts that have not been well thought out and that were proposed mainly as a way of getting a piece of the pie. I’m not talking about corruption; I just mean that people are going to think that they’ll be able to do great things if they can land some of that money, and that they’ll sweat the details later.

My second worry is that, fundamentally, this is not the way to build a local news organization. It takes community-based planning and, ultimately, community-based funding from local institutions, members and advertisers. Big bucks from a national organization can be a godsend in supplementing that mission, but it has to be bottom-up, not top-down — and there are no one-size-fits-all solutions. As Authentically Local, one of the early organizations of digital startups put it, “Local Doesn’t Scale.”

That said, Press Forward is welcome news, and I wish them all the best. We need more high-quality local journalism, and this seems like an ambitious effort to pay for some of it.

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