Yet with the business model for news in transition, mainstream media owners are cutting staff and reducing content, particularly hard-news coverage, in order to maintain the high profit margins newspapers have historically enjoyed. “The editorial costs of the average newspaper run from about nine to twelve percent,” says Robert Picard. “That’s nothing in comparison to the total costs of the newspaper, yet they’ve been bearing the brunt more and more.” Certainly the news industry needs to think about different business models (Tom Rosenstiel, director of the Project for Excellence in Journalism, is a proponent of one in which consumers would pay for news as part of their monthly Internet subscription). But it would also be wise to consider the many ways that government could simply protect journalism from market pressures. I’d like to present some of them—not by way of endorsing one idea over another, but to spark a necessary discussion.
Let’s begin with Europe, where most countries have been subsidizing the press, both directly and indirectly, for decades. In Scandinavia and a few central European countries, some newspapers receive lump sums from the government. Sweden has a particularly streamlined subsidy system that was implemented in 1971. Karl Erik Gustafsson, a professor of media economics at Jönköping International Business School, created the system, which was designed to preserve newspaper pluralism by allocating money to all papers except the dominant paper in a given region or city. Since these subsidies have been in place, there has been a substantial reduction in newspaper closures, and Sweden has avoided the inevitable effect of the free market on the daily press: the one-newspaper town. The subsidies are distributed by The Press Subsidies Council, an administrative governmental body, and are based on circulation and revenue data. “The rules are automatic,” explains Gustafsson. “They are in no way subjective. It’s an open system and every newspaper knows exactly what the subsidy will be this year and the coming year. I think the newspapers have become stronger in their criticism of the political parties due to the state subsidies. Earlier, they were more partisan, more dependent on the money from the parties.” (Historically, newspapers in Europe received substantial funding from political parties, as they once did in the U.S.) “Now they can say, ‘We don’t care. We get our money from the state.’” Hallin, who specializes in comparative media systems, observed that when the press subsidies were introduced, it was “exactly in that period that there was a shift in Scandinavia toward a more adversarial press. It is actually very strong evidence that press subsidies don’t lead journalists to be timid.”
Newspapers in most European countries also benefit from a reduction in or an exemption from the Value Added Tax, which ranges from approximately 15 to 25 percent. Other press subsidies in Europe include corporate tax exemptions, grants for start-up ventures or technological innovations, state loans, grants for journalism research and training, and regulations requiring that government advertising appear in multiple publications. (In France, individual journalists enjoy a substantial income-tax deduction.)
In addition, all European countries have robust and well-funded public broadcasting systems that dwarf America’s. The U.K. spends nearly $7 billion a year on public broadcasting—the money comes from an annual television tax—while the U.S. Congress allocates roughly $480 million. Certainly, the BBC has had its problems, most notably during the Thatcher era, but the value of the BBC’s news and investigative programming surely outweighs the harm from the handful of instances in which government tried to influence or censor content. “The BBC is at least as independent politically if not perhaps somewhat more independent than the commercial networks in the U.S.,” says Hallin. “People assume that if the government pays for it, it will control it, and so the media will be less free. The truth is that the experience of European countries suggests that’s not actually the case.”
In addition to the valuable models of press support in Europe, there are scholars and journalists in the United States who are devising governmental solutions of their own. Free Press has been developing a new model of funding for public broadcasting and public-service journalism that would reduce political influence by eliminating the congressional appropriations process and politically appointed leadership. It proposes establishing an independent trust, funded by a ten-year tax on broadcast advertising revenue. Many European countries raise funds for media subsidies through a tax on advertisers. (In the U.S., the government does not tax advertisers or advertising revenue but does allow businesses to deduct all advertising expenses.)