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How to cure local news without accidentally poisoning it (opinion)


Submitted by Steven Waldman

The idea of the government helping “save” the news media makes most reporters’ skin crawl. How on earth can journalists hold politicians accountable if we’re getting money from them?  Wouldn’t that put the muckrakers under the thumb of the muckmakers?

The only group I can think of that might, at first blush, be less inclined to want government support for “the media” is Republican officeholders.

So there’s not much point in talking about how government policy could help local media, is there? Yes, there is — because the crisis in local news has become cataclysmic and because help can be provided in a way that prevents either government interference with the press, or advancement of ideological agendas. Just as important, the right policies can help create a better local news system — which will strengthen communities — not just prop up the existing one.

Even before COVID-19, local newspapers had lost about half their jobs since 2008. The contraction was on the same scale as that of the coal and steel industries. COVID-19 has accelerated the decline. Estimates are that in the last two months, 36,000 newsroom workers were laid off, furloughed or had their pay cut. Further closures, bankruptcies, mergers and acquisitions by hedge funds are expected soon. 

This isn’t just (or even primarily) a matter of losing more jobs. The lack of a healthy local news source makes it harder for families to make good decisions for their families. Studies have shown that communities with weak local news have more government waste, corruption, and pollution — and less civic involvement and ability to solve local problems. It’s hard to have vibrant communities with a sickly local media.

Before COVID-19, Mitch McConnell’s former chief of staff, Josh Holmes, offered another reason to care:

You won’t hear a conservative say this often enough but pls support your local media. . . Locals are underfunded and overextended and forced to fall into the clickbait competition with national outlets that only exacerbate the problem. The result is national media misunderstanding/misinterpreting local politics.

If you don’t want someone on the coasts to tell the world what your life is like, what your business does, what you believe or what national policy means for your family, then subscribe to a local outlet. . .

Assuming for a moment that we mostly agree on the importance of local news, is there really anything that government can do — that wouldn’t make matters worse?

Yes. The key is following two important principles. First, most help should be content-neutral and, most likely, indirect. We should avoid having government officials sitting around a table deciding which news organizations, or journalism projects, should get money.

Let’s take a cue from the Founding Fathers. They subsidized the growth of the free press by creating and subsidizing the postal costs of newspapers. But they did it in a way that President Jefferson couldn’t just reward his favorite newspapers and punish the Federalists. 

Second, media policy should help locally-owned news organizations and non-profit newsrooms — not just big newspaper chains or TV station groups — as those community-grounded models will be the most sustainable in the long run and the most focused on the kinds of news that actually helps towns and cities thrive. 

Here are a few specific ideas that meet those two tests:

Run more federal government advertising through local media. Before COVID-19, the federal government spent about $1 billion a year in advertising, for things like military recruitment or the Census. The government should now spend many billions of dollars on public health ads in the next 12 months, both from the Centers for Disease Control and through local health departments. That would be good for our health.  And it should spend more on advertising to help jump-start Census completion and military recruitment.

But in the past, government advertising has gone mostly to national media. This time, a good chunk should reach the public through local media. And at least half of that local share should be advertising or underwriting in news organizations that are small — 100 employees or fewer — and to local news non-profits. That would ensure that locally-owned news organizations, nonprofits, ethnic weeklies, rural papers, public radio and other community-grounded news organizations would benefit. The law should, of course, ban any administration from using ad contracts to reward or punish media outlets based on politics.

Second, encourage the replanting of newspapers back into communities. Attorney General William Barr recently decried media consolidation and praised the olden days when “the press was so fragmented that the power of any one organ was small” and a multiplicity of newspapers “cultivated a wide variety of views and localized opinion.”  

He’s right. About 1,000 newspapers — roughly half the total — are owned or controlled by a few private equity or hedge funds. Unfortunately, one secondary effect of COVID-19 is likely to be another wave of mergers and acquisitions by private equity funds.  

In truth, many great newspapers could survive and serve as important local institutions if they weren’t laden with debt or required to produce double-digit profits — and if they could to draw philanthropic support from the community as an additional revenue stream.  

We need a strategy to “re-plant” some of these newspapers in communities. We should have a moratorium on newspaper mergers (a stick) combined with a huge carrot: allow them to take a significant charitable deduction on their taxes if they donate the newspaper to a local non-profit or public-mission-oriented B corporation.  This would re-establish the news organization as a civic institution, primarily focused on serving local residents.

We have seen major newspapers like the Philadelphia Enquirer and the Salt Lake Tribune make the shift, with great success. With a tweak to the tax code, we could see a wave of replantings.

Third, make it easier for non-profit local models to succeed. While the congressional bailout legislation is appropriately offering aid for commercial local news organizations, government policy should also make it easier for non-profit local news organizations to thrive.  Hundreds of these non-profit sites — from Iowa Watch to the Colorado Independent — have sprouted in the past ten years, and they need to be an important part of the local news future.

The IRS should clarify that nonpartisan, local journalism can be considered a legitimate public purpose when approving the tax exempt status.  News organizations should never again have to delete the word “journalism” from their applications, as has happened in the past. Non-profit news organizations should also be able to accept underwriting or advertising without jeopardizing their tax-exempt status. And taxpayers should be able to take deductions when buying a news subscription.

There may even be a way to help provide more direct support without getting entangled in politics. A group of 12 foundations three years ago created something called NewsMatch, a $3 million fund that provided matching grants to nonprofit news organizations that raised money from their communities. It doesn’t involve some government official deciding what journalism project is worthy. It just rewards the organizations that are able to generate community support.  The government could provide a one-time, no-strings-attached grant to supersize Newsmatch, helping the non-profit groups that have formed to fill news deserts.

Fourth, change the tax code to incentivize journalism for commercial media. Other tax changes could not only help prop up current news companies but change the incentive structures at commercial ventures. For-profit companies could get tax credits for hiring journalists or treat internal spending for journalism as a pre-tax item (as it does for health care in some cases).

Finally, let’s recast local journalism a public service profession.  We need to get more local reporters on the ground, and viewing local reporting as a public service calling. National service programs for journalists, such as Report for America, would be more likely to place thousands of reporters if AmeriCorps were bigger.  There are many other reasons that national service should be expanded; just add saving local news to the list.

These are all measures that resemble the Founder’s approach — content-neutral and broad based.  COVID-19 is terrifying.  Curing local media does need not to be.

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