The complications of federal assistance for newsrooms

What do the Seattle Times, Axios, and the National Enquirer have in common? They didn’t all win a Pulitzer recently; rather, they’re all among the “small businesses” eligible to apply for financial assistance under the federal government’s Paycheck Protection Program. The Seattle Times, which is independently owned, received a loan of $9.9 million, just under the program’s upper limit of $10 million. American Media Inc., the Enquirer’s parent company, reportedly asked for a loan between $5 million and $6 million; it’s not yet clear if its application was successful. (Not all AMI staffers welcomed the move; one told the Daily Beast that it’d be “sickening” if the loan is granted, given AMI’s incestuous relationship with President Trump.) Axios, for its part, received around $5 million, but decided to return the money. Jim VandeHei, its co-founder and CEO, wrote that PPP had become “politically polarized” and “divisive,” and that he had faced “public backlash” for taking advantage of it—because Axios is a media company, and because it’s venture-funded. VandeHei said the site found funding from an alternative source instead.

The disparate cases of these three outlets have informed a debate within the media industry as to who—if anyone—should benefit from federal funds. Local news has been at the heart of the conversation. While several other local outlets—including the Tampa Bay Times, Newsday, the Chicago Sun-Times, the Times-Picayune/New Orleans Advocate, the Texas Tribune, and Seven Days, an alt-weekly in Vermont—got PPP funds, many were excluded. The Wall Street Journal calculated recently that titles accounting for around 80 percent of national newspaper circulation were ineligible under the program’s terms, because they’re “affiliated” with bigger companies—such as Gannett and the NBA’s Minnesota Timberwolves—that have too many employees, from a PPP standpoint. (Yes, you read “Minnesota Timberwolves” correctly.) Larger chains may be eligible for other federal loans—but these would need to be repaid, and most publishers aren’t in a position to take on more debt right now. (PPP loans, by contrast, can be forgiven.) The exclusion of chain-owned papers from PPP is ironic, given that the chain structure was designed to squeeze money out of a dying industry by consolidating costs. Now, as Nieman Lab’s Joshua Benton notes, “Instead of ‘too big to fail,’ they’re too big to support.”

ICYMI: MSNBC public editor: Who benefits from remdesivir coverage?

The last time Congress voted on coronavirus aid, lawmakers from both parties triedto no avail—to expand PPP eligibility to include chain-owned local news outlets. Now they’re trying again. Yesterday, the Democratic-led House of Representatives published an 1,800-page bill which would (among many other things) exempt local newspapers and broadcasters from the PPP’s “affiliate” rules. (The Journal was first to report that provision, on Monday.) The bill, as a whole, is currently a one-party wish list, with no prospect of passage in the Republican-controlled Senate. According to the Journal, Democratic senators Maria Cantwell and Amy Klobuchar—who, along with Republicans John Kennedy and John Boozman, pushed for the local-news exemption last time—will lead the charge to keep it in the bill this time. (On Monday, a group of 26 lawmakers, led by Rep. Yvette Clarke, Democrat of New York, wrote House leadership asking for digital-only news organizations to be exempted from the affiliate rule, too.)

As the PPP discussion has rolled on, two main ethical issues have presented themselves—one which is specific to the news media, and one which isn’t. The latter is the general question of worthiness; in recent weeks, the program faced criticism, not least from the news media, when it transpired that some companies that don’t look like small businesses—Shake Shack, Ruth’s Chris Steak House, the LA Lakers—got loans. (The three companies named here all returned their loans.) Last week, Neil Irwin, of the New York Times, argued convincingly that the worthiness debate is misguided, because—rather than encouraging the government to expand the pie—it implies that businesses are engaged in “zero-sum jockeying” for scraps, and because (unlike with the 2008 financial crisis) business didn’t cause the pandemic.

The media-specific ethical issue concerns the old dilemma of whether independent news outlets, whose job it is to hold government accountable, can take money from the government without triggering a conflict of interest. This debate feels misguided, too. The question of which outlets a government chooses to support can undoubtedly raise problems; in Canada, for example, critics recently accused a publicly-funded reporting initiative of discriminating against newer outlets. With PPP specifically, however, the selectiveness problem, while real, isn’t an expression of editorial values—Axios didn’t get picked to receive funds over Gannett-owned papers, for example, because officials like the former and not the latter. As several newsrooms pointed out to justify applying for the money, PPP is not a bailout for the media, specifically. 

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And even if it were, would that be so terrible? We want to save the news business because of the vital work it does holding government to account. It thus feels odd that we’d suspect the news business of not being able to handle public money without its mission being corrupted; surely, from a public-good standpoint, such an easily corruptible information ecosystem wouldn’t be worth saving at all? Sure, not all media companies are equal in their ethics (hello, National Enquirer), and vigilance around funding is always necessary. Taking government money isn’t an ideal situation for newsrooms. But neither is taking money from hedge funds, and media companies do that all the time. We’re supposed to scrutinize power systems other than politics, too.

The news business needs all the help it can get right now; as Matt Pearce, a reporter at the LA Times, put it recently, the ethical debate is interesting, “but if journalists don’t get their oxygen masks on first, we’re not gonna be around to help the people around us.” Even though subscriptions are up for some outlets, the economic crisis caused by the pandemic has hammered the advertising model on which much of the industry relies; according to the Times, more than 35,000 media workers have taken pay cuts, been furloughed, or lost their job since this crisis began.

We need outside-the-box thinking now more than ever. To that end, CJR and the Tow Center for Digital Journalism are launching the Journalism Crisis Project, a series of weekly webinars in which we’ll chat with industry experts about the current, dire financial straits, and what could come next. Our first webinar will be tomorrow at 12pm Eastern, and will feature CJR’s Kyle Pope and Tow’s Emily Bell alongside Kristen Hare, of Poynter; Penny Abernathy, of the University of North Carolina; and Sarah Stonbely, of the Center for Cooperative Media. You can register to take part here. PPP might just come up. 

Below, more on the coronavirus:

  • PPP, meet FOIA: While individual companies have confirmed their receipt of PPP loans, the Small Business Administration, which administers the program, has yet to release a list of recipients; when news organizations have asked to see one, the SBA has pointed to generalized statistics on its website, and said it isn’t responding to Freedom of Information Act requests “at this time.” Yesterday, the Times, the Washington Post, ProPublica, and Dow Jones, publisher of the Journal, sued the SBA for the information.
  • Dystopia: Top government health officials, including Dr. Anthony Fauci, appeared virtually before the Senate Health Committee yesterday. “The proceedings were carried on cable news. But the aesthetic was low-budget Westworld,” James Poniewozik, TV critic for the Times, writes in a review. “Typically, a high-profile Senate appearance is the theater of congestion. The testifiers appear, flanked by advisers, and face a forest of cameras and microphones as they stare down a crowded bank of legislators. Tuesday’s proceedings looked instead like a tribunal in some depopulated cyber-western dystopia.”
  • Department of Fear and Favor: During an interview with Christiane Amanpour, on CNN, Donald G. McNeil, Jr., a health and science reporter at the Times, ripped into America’s pandemic response. He called on Robert Redfield, the director of the Centers for Disease Control and Prevention, to resign; called Vice President Mike Pence a “sycophant”; and said he’d had trouble, at first, convincing his editors at the Times to take the virus seriously. In a statement, a spokesperson for the paper said McNeil went “too far in expressing his personal views,” and had been reminded of his responsibilities.
  • Follow the money: Maria Bustillos, CJR’s public editor for MSNBC, argues that the network “should have been more critical” in its coverage of remdesivir, a drug that the Trump administration has trumpeted as a potential game-changer. “For MSNBC viewers who may face the question of whether or not to seek remdesivir treatment for their loved ones, or for themselves, the network must put considerably more emphasis on the limitations and the risks,” she writes, “not to mention the financial interests involved.”
  • Tweet nothings: In March, Twitter started taking down coronavirus-themed tweets that pose a “direct risk” to users’ health and wellbeing. Going forward, the platform will also append warning messages to less-harmful posts that contain disputed or misleading claims about the virus; the policy will apply regardless of the tweeter’s identity, meaning Trump’s tweets could be flagged. CNN’s Donie O’Sullivan has more details.
  • Who’s keeping watch?: For CJR’s Year of Fear series, Charles Richardson reports from Macon-Bibb County, in Georgia, following Governor Brian Kemp’s decision to reopen swathes of the state’s economy. On April 22, the county’s board of health—which had been warned of the dire possible consequences of reopening—passed a resolution asking Kemp to rescind his order. Only one reporter covered the board’s meeting.
  • In brief: The Associated Press launched “Lives Lost,” a “virtual scrapbook” that aims to tell the stories of individual COVID-19 victims around the world. In Russia, Vladimir Putin’s spokesperson, Dmitry Peskov, confirmed to reporters that he is receiving hospital treatment after testing positive for COVID-19. And with magazine cover shoots a thing of the past (for now), Robert Pattinson photographed himself for the new edition of GQ.


Other notable stories:

  • Yesterday, the union representing journalists at the Cleveland Plain Dealer—already whittled down by waves of layoffs—announced that, from Friday, the newsroom will “no longer exist.” The Plain Dealer’s owner, Advance Local, is laying off its four remaining reporters; they’ll be offered jobs at Cleveland.com, the paper’s nonunionized sister site. For CJR, Anna Clark has a deep dive on the Plain Dealer’s “last days.”
  • In other local-news news, the philanthropists who are trying to buy the Baltimore Sun from Tribune Publishing want to turn the paper into a nonprofit, following the example set by the Salt Lake Tribune. And the Providence Journal, in Rhode Island, is abolishing editorials. Alan Rosenberg, its top editor, argues that the paper barring reporters from expressing opinions, then expressing them itself, creates “confusion” among readers.
  • Facebook will pay $52 million to settle a lawsuit brought by current and former content moderators who claim that their work for the company took a toll on their mental health. Each of the 11,250 staffers covered by the settlement will receive at least $1,000, and could get more depending on their diagnosis. Casey Newton has more for The Verge.
  • Rest of World, a news site focused on “what happens when technology and human experience collide in places that are often overlooked and underestimated,” launched yesterday. The site—which is led by Sophie Schmidt, its founder and CEO, and Anup Kaphle, its executive editor—already has dispatches on Sudan, China, and Hong Kong.
  • And Carolyn Reidy, the CEO of Simon & Schuster, died yesterday, following a heart attack. She was 71. Bob Woodward told the Times, of Reidy, “She would let you write the book you wanted to write. She would say, ‘If that’s the truth as you found it, we will publish it.’ There was never any adjustment or political bending.”

ICYMI: Why did Matt Drudge turn on Donald Trump?

Update: A previous version of this post cited the Arkansas Democrat-Gazette as an example of a paper that did not receive a PPP loan, as per a Journal article from April 27. Since then, the Democrat-Gazette was able to apply for a PPP loan. The example has been updated for clarity.

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Jon Allsop is a freelance journalist. He writes CJR’s newsletter The Media Today. Find him on Twitter @Jon_Allsop.