Bozelko: Newspapers deserve a fighting chance
As we were distracted by COVID-19 and growing unrest, the federal government has started subsidizing news media, something experts have warned against for years. According to the NewsGuild, a union for journalists and media professionals, hundreds of newspapers received Paycheck Protection Program (PPP) loans.
And it seems like more money may be on the way. The HEROES Act passed by the House of Representatives in May expanded the PPP to make smaller newspapers and broadcasters owned by larger corporations eligible for the forgivable loans; that these companies have more than 500 employees aggregate made them ineligible.
Just because no such provision appears in the HEALS Act, introduced on July 27, doesn’t mean the Senate isn’t considering this. After sending a ”Dear Colleague″ letter asking other senators for support in May, Sen. Maria Cantwell (D-WA) introduced the Local News and Emergency Information Act which would also expand eligibility for larger newspaper chains. There’s no reason to assume that the Senate won’t support this; in April, almost two thirds of senators wrote to the Office of Management and Budget asking them to spend federal money on advertising in local news outlets.
Congress would be wise to stop more newspapers from receiving stimulus monies if the news media is to regain the public trust it’s lost.
Not only do I have a civic interest in a robust local press - accountability journalism increases voter participation and sniffs out corruption that often costs taxpayers so much that losing a local newspaper increases municipal borrowing costs by 5 to 11 basis points - I have a personal interest in local newspapers’ survival. This column appears in them.
From postal subsidies to purchasing space for legal notices, the press has often been blessed by government largesse. In this country, subsidizing blatantly partisan newspapers - rewards for political support - was common until about 1860.
It stopped only when a competitive newspaper market emerged, a competition we don’t have now, not because newspapers aren’t battling each other for eyes and buys, but because Facebook and Google control about 70% of digital ad revenue, siphoning it away from newspapers. In 2018 alone, Google alone made $4.7 billion off news content it paid nothing to create. Because approximately 80% of news revenue comes from ads, newspapers as a whole can’t compete with the tech giants.
Fifty newsrooms have closed as a result of advertising downturns brought on by the pandemic but it’s not clear that PPP funds would have saved them. The purpose of PPP was to get any businesses through the pandemic and so they would arrive at their formerly profitable status.
But there’s no such status for many newspapers to return to. When PPP money is gone, they’ll still be in trouble; 300 of them went under in the last two years. Another 1,800 went well before, causing 1,400 towns and cities in the U.S. to have lost a newspaper. The government hasn’t offered sustained fiscal support to address this, so the PPP loans to the hundreds that remain may have temporarily staunched the bleeding but they’re far from the transfusion that local news needs.
There is a way the government can help without expending any cash. Last year Rep. David Cicilline (D-RI) proposed the Journalism Competition and Preservation Act to provide a four-year safe harbor from anti-trust statutes so newspapers can band together to negotiate with Facebook and Google over ad rates. Right now, none of the news outlets are big enough by themselves to have any leverage and working together with other outlets violates the law.
Cicilline proposed an identical bill in the last Congress that went largely ignored but the current iteration of the bill has been pending since last May and generated a Senate version that Majority Leader Mitch McConnell (R-KY) co-sponsored earlier this year. There’s no reason why the Journalism Competition and Preservation Act can’t be amended to any stimulus bill that gets a vote. It should have both House and Senate support.
Media critics have pointed out that news is actually only 4% of the content in the Facebook News feed, and therefore not enough to give the news outlets leverage in negotiating with them even if they join forces.
But those considerations are different now. It may be the time when this collective power against tech giants will be most effective because Facebook has already lost $60 billion market share since advertisers started boycotting over the platform’s policies on managing misinformation. Besides, just last month Facebook started offering local news to all users nationwide so the risk of local newspapers losing even more ad revenue grows.
Even if there weren’t an alternate way to assist newspapers, PPP loans to them are still ill-advised because of the impact they’ll have on readers. American trust in the news is at a new low. It was at its highest in the 1970s, incidentally when government subsidies finally started to lose their grip on news.
When governments subsidize news, as they do in Europe, there’s little evidence that editors tailor their coverage to appease funders.
But that doesn’t need to happen for taxpayer dollars to spoil the news; readers’ perceptions often differ from the reality of newsgathering. For instance, in a survey conducted by Columbia Journalism School last year, 60% of respondents (54% of Democrats, 70% of Republicans) said they believed that reporters were paid by their sources, an impression not based in fact.
Trust will be undermined further when audiences see stories as motivated by participation in the Paycheck Protection Program. Some news organizations that received PPP funds have already been noted for their closeness to the Trump administration. It won’t be long before other news outlets have their editorial decisions questioned because they received PPP loans, even if the money had no effect on content.
Proponents of PPP loans to news outlets argue that they’re just like any other business affected by the pandemic. I disagree. I doubt anyone thinks the Baltimore Sun - which is considering a conversion to a nonprofit model to survive and won the 2020 Pulitzer Prize for local reporting for exposing the Baltimore mayor’s scheme to sell children’s books to corporations dependent on city contracts - is equally as important as the Ruth’s Chris Steakhouse in the city’s Inner Harbor, part of a chain that received a ballyhooed bailout from the PPP. The Baltimore Sun is far more important to democracy than any ribeye.
And that’s exactly my point. The American newspaper actually deserves more than a government handout. It deserves a fighting chance. That’s what needs to appear in the next stimulus bill.
Chandra Bozelko writes the award-winning blog Prison Diaries. You can follow her on Twitter at @ChandraBozelko and email her at email@example.com.