Business of News

As local news crumbles, should the federal government intervene?

July 8, 2020

Journalism is just one of the industries hard-hit by the economic fallout from the pandemic. While we reimagine journalism’s structures and funding models, what role might the government play in intervening to support the role of a functioning press—not just someday, but now? 

In a new report published by the Hussman School of Journalism and Media at the University of North Carolina, Penny Abernathy—a collaborator on our Cutback Tracker project—underlines the stakes. Since 2005, more than a quarter of the country’s newspapers have disappeared. In the same fifteen-year span, the number of local journalists working in newsrooms has dropped by half. She describes the covid-related recession as a watershed moment. “The choices we make in 2020–as citizens, policymakers and industry leaders–will determine the future of the local news landscape,” Abernathy writes.

In the report, Dana Miller Ervin dives into some of the proposed policies for government intervention in the crisis, noting an attitude shift on Capitol Hill. “Before the pandemic, journalism was seen as a pet interest on the Hill,” Ervin quotes Viktorya Vilk, of advocacy group PEN America, saying. “That perception has shifted now. We’re finally at a moment when conversations [about assistance] are absolutely happening.” Still, the November election presents a time crunch; if interventions don’t happen soon, Ervin warns, they’ll likely have to wait until January or beyond. 

Stimulus payments and loans provide one option for intervention, though distribution can be inconsistent and flawed. In late March, Craig Aaron, president and co-CEO of Press Action, wrote for CJR in favor of a Congressional stimulus for journalism. “Now is the time to act,” Aaron wrote. “We need significant public investments in all corners of the economy, and journalism is no exception.” Soon after, the CARES Act was signed into law, with some stimulus money made available to a few in the journalism industry. Some localized outlets, like the Tampa Bay Times and Seattle Times reported receiving Paycheck Protection Program stimulus funding, though many small newsrooms owned by large parent companies did not qualify. As Poynter noted, “most local daily newspapers were left out.” (Yesterday, when the US Treasury Department released PPP loan level data, CNN reporter Kelly Flynn began tweeting lists of media recipients, which included Forbes, Newsweek, theSkimm, and the Daily Caller, to name a few).

Allocating federal advertising budget funds to local media outlets could provide another form of relief, Ervin suggested, noting that in mid-April, nearly 250 House members drafted a letter in support of such a move. In mid-May, Congressman Tim Ryan sponsored the Protect Local Media Act, which includes amendments to PPP funding requirements so they would apply to more small news organizations, a path to nonprofit status for commercial outlets, and tax credits for journalism hires. The legislation hasn’t made any progress since it was filed.

Ervin outlines a host of possibilities for government intervention, from pension debt relief for struggling media companies, to increased federal support for the Corporation for Public Broadcasting, to tax deductions for large corporations willing to divest themselves of newspaper ownership followed by support for a small publication’s transition to nonprofit status.

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Below, more on recent changes in newsrooms across the world:

  • CONNECTING WITH MORE READERS: In response to Abernathy’s most recent report, the Knight Foundation outlined three ways local news initiatives were communicating with readers about covid-19. Some outlets, Mark Glaser reported, are using texting services like GroundSource or Subtext to reach underserved audiences by delivering information directly to readers’ cell phones. “Whether it’s a text service in Detroit or rural parts of Oklahoma, or immigrant media in Queens or community media in Maui, or virtual town halls or in-person reporting, these projects offer us the promise that more communities will get the information they need to understand the effects of the novel coronavirus,” Glaser wrote. (For more on engaging with readers, see Mathew Ingrams’ lineup on the topic in The Media Today newsletter last November).
  • FRANCE OFFERS TAX INCENTIVES FOR NEWS SUBSCRIPTION: In light of the economic crisis facing the journalism industry, French ministers of parliament have voted to offer tax credits for those newly subscribing to general interest newspapers or magazines, The Guardian reported last Wednesday. “France’s state secretary for economic affairs, Agnès Pannier-Runacher, said the measure reflected ‘an undertaking by the president to support the press, which is suffering enormously and not necessarily benefiting from all sorts of aid’ available to other sectors of the economy,” Jon Henley wrote. The offer does not apply to specialized publications.
  • GOOGLE WON’T GIVE IN: Google subverted attempts by European publishers to limit its harvesting of user data, Reuters reported last week. Though some publishers hoped to capitalize on the split of Google’s permissions requests that the company reportedly agreed to—differentiating permissions required to show personalized ads from permissions required to gather information—Google announced that unless publishers granted both permissions, they would not be able to use personalized ads. Reuters quoted the chief privacy officer from Norway’s Schibsted media group saying, “We are concerned when big players seek to dictate the ways we should process data. It’s concerning and problematic if we end up in a situation where certain companies become gatekeepers.”
  • MCCLATCHY WON’T BE A NONPROFIT, AFTER ALL: Despite last week’s report of the possibility that leaders in the nonprofit world might win the bid for news publisher McClatchy, Ken Doctor followed up to report for Nieman Lab that “the Savior” in question, now identified as the Knight Foundation, did not make a bid after all. The foundation is “in the business of grants and investments, not operating businesses,” Doctor wrote. “That it even considered a bid for McClatchy shows how desperate the situation is in the business of local news.” Doctor reported that two of the three most likely winners of the bid are Chatham Asset Management, McClatchy’s leading investor and debtholder, and Alden Global Capital, the hedge fund whose founder was profiled last week for CJR.
  • REUTERS PAYWALL: Reuters has plans to put some of its reporting behind a paywall, The Information reported last week. “Reuters would become one of the last free news services to adopt a subscription business model, a sign of how much the news industry has shifted away from relying on advertising,” Tom Dotan wrote.
  • ODE TO THE OUTLINE: The Outline is among the publications that shut down completely in the wake of the pandemic. Last week, Jeremy Gordon wrote about The Outline for CJR, considering the elements that set it apart from other publications. “In my mind, our freedom to experiment meant pursuing stories that resisted categorization, and the dominant formats of daily culture journalism—no listicles, no hot takes,” Gordon wrote. “We were never operating in the same realm as publications like the New Yorker and Wired, because we were never an institution. The rules were always changing for us, and we had to change with them.” At Discourse Blog, Paul Blest wrote about The Outline as a lifeline for young, freelancing journalists. “The Outline should be remembered as more than just an early casualty of the reckoning we’re about to face,” Blest said.
  • FACEBOOK BOYCOTT GROWS: A growing list of advertisers are pulling their ads from Facebook, some as part of the #StopHateforProfit campaign launched by the Anti-Defamation League and the NAACP to protest the social media platform’s management of hate speech by its users. New Zealand’s largest newspaper group, Stuff, also joined the boycott, The Guardian reported on Monday. Elsewhere, CNN has compiled a running list of participating companies, noting that certain advertisers have joined the boycott without naming the #StopHateforProfit campaign specifically. And The Information reported that Mark Zuckerberg privately told his employees that “all these advertisers will be back on the platform soon enough.” The boycott demonstrates that collective action is possible among advertisers. “It’s not that Facebook doesn’t care about things like fake news, it’s that it doesn’t care enough,” Mathew Ingram wrote for CJR back in 2018. “And the reason why is the same as it is for Google (which has a number of its own well-meaning efforts aimed at journalism)—because ultimately those issues don’t affect the central business of the company, which is to connect everyone on the planet and generate as much advertising revenue as humanly possible.”
  • PLEAS FOR LOCAL JOURNALISM: Members of The Manatee Community Foundation in Bradenton, Florida made a plea for local journalism in The Bradenton Herald last week. “While companies and businesses are trying to maximize the benefits of their advertising dollars, we hope they will continue to purchase paid media in the Bradenton Herald,” they wrote. “The Bradenton Herald tells the stories we need to be aware of — bringing issues that would otherwise be discussed and lived behind closed doors into the forefront. We are hopeful that any new owner will insist that this news outlet will be given the resources to grow local journalism.”
  • FURLOUGH FUND SUCCESS: The Journalism Furlough Fund, established by Seattle Times reporter Paige Cornwell in late March, surpassed $90,000 in donations to support furloughed journalists with small payments to cover basic needs. In mid-April, Cornwell noted on the GoFundMe page that some financial assistance had been distributed to journalists across the country to cover costs like medical bills, health insurance, mortgage payments, a laptop purchase, and daycare. Last week, Cornwell tweeted that 360 journalists had benefited from the fund thus far.
  • MORE LAYOFFS: British publisher Reach, which owns hundreds of regional papers, eliminated 550 jobs, The Guardian reported yesterday.


JOURNALISM JOBS AND OPPORTUNITIES: MediaGazer has been maintaining a list of media companies that are currently hiring. You can find it here. The Deez Links newsletter, in partnership with Study Hall, offers media classifieds for both job-seekers (at no cost) and job providers. 

Lauren Harris is a freelance journalist. She writes CJR's weekly newsletter for the Journalism Crisis Project. Follow her on Twitter @LHarrisWrites