Don’t Waste Stimulus Money on Newspapers
You wouldn’t put a dead man on a ventilator, would you?
My heart commands me to support the 19 Democratic senators who want the next stimulus package to include local news businesses, injured like other industries by the coronavirus apocalypse.
Lord knows the senators have a case. About 33,000 news media workers have been laid off, furloughed, or had their wages cut since the pandemic arrived, and few news outlets have dodged the damage. Some daily newspapers have reduced the number of days they go to the press, and others have stopped printing altogether. This industrywide death spiral hits me personally because I grew up on newspapers, delivering them when I was a kid. I’ve always loved the way newspapers smell and the rustle they make as you course through their pages, and I’ve always enjoyed returning from vacation to plow through a pile of yesterday’s papers and catch up on crime, corruption, and culture. Nobody will miss newspapers more than me when they finally vanish.
The newspaper business—which is what most people are talking about when they talk about local news—went into eclipse a couple of decades ago, long before coronavirus struck. Circulation of U.S. dailies is down 50 percent from its all-time high and revenue down about 60 percent from their peak. Newspaper employment is down about 50 percent from its 2008 levels. Except for the New York Times and Wall Street Journal, which have added millions of online subscribers, and the Washington Post, which boasts more than a million digital subscribers and the world’s richest man as its owner, most newspapers are sliding toward oblivion. Even the billionaire owner of the Los Angeles Times has felt the current pinch and has been forced to lay off staff. Meanwhile, the 30-newspaper McClatchy chain, with dailies in Miami, Sacramento, Kansas City, and Fort Worth, just filed for bankruptcy and was headed there even before the pandemic. Gannett, the nation’s largest newspaper chain, traded at $12 a share last summer. It dropped to about $6 in January before coronavirus and is trading at 90 cents as I write.
This day didn’t sneak upon us. In 1976, Los Angeles Times media reporter David Shaw asked in the lede of his story about the struggling newspaper business, “Are you now holding an endangered species in your hands?†Los Angeles Times Publisher Otis Chandler conceded to Shaw that no metro newspaper was essential to 50 percent of its readers. In 1992, financier Warren Buffett, who has made additional millions from owning newspapers said the ride was over—that newspapers had lost their competitive edge to cable and broadcasting. He didn’t even mention the internet, which was not yet a thing. Ever since it became a thing, people have been prophesying the destruction of the industry. The most surprising thing is not that newspapers are teetering into the abyss but that they lasted this long. The virus is only accelerating their fate.
Back to the bailout argument. It might make sense for the government to assist otherwise healthy companies—such as the airlines—that need a couple of months of breathing space from the viral shock to recover and are in a theoretical position to repay government loans sometime soon. But it’s quite another thing to fling a lifebuoy to a drowning swimmer who doesn’t have the strength to hold on. Newspapers are such a drowning industry. Readers have abandoned them in the tens of millions. Advertisers have largely abandoned them. For the most part, the virus isn’t causing them to sink. They’re already sunk. In the triage of rescuing flailing firms, some sectors must be left dead unless we want to make permanent welfare cases out of them—and that’s a much different argument than a bailout.
It would also be a grievous error to bail out papers controlled by the Alden Global Capital hedge fund—and other firms like them—that have made a practice of squeezing high profits while simultaneously cutting staff and escalating subscription prices. I don’t necessarily quarrel with the “vulture capitalist†business model of extracting the value from its properties as quickly as possible until all that’s left is a husk, but we shouldn’t reward companies that hollow out their newspapers with feeding at the government trough.
Newspaper bailout defenders like to say there’s nothing unprecedented about the government intervening in the market to help the press. They point to the steep mailing subsidies the U.S. Post Office gave publications for most of the nation’s history. They point to the government mandates that all (paid) public notices must be placed in newspapers. They point to the antitrust exemption that allowed competing newspapers to combine their business sides while keeping their news sides independent in “joint operating agreements.†But industrywide government loans to news outlets or massive direct subsidies of them as recently proposed by Poynter Institute thinkers Kelly McBride and Rick Edmonds as well as a consortium of organizations and individuals, including PEN America, are unprecedented. The imposition of government money into newsrooms would inevitably bring with it the potential chill of political interference. Politicians—usually Republicans like President Donald Trump—routinely issue threats to defund NPR and PBS every time they object to the outlets’ coverage. Do we really want to make the print press beholden to such political whims?
No less an authority on government-funded media than Vivian Schiller, president and CEO of NPR from 2008 to 2011, can explain how “problematic†the current model of federal funding to public media is. “The Corporation for Public Broadcasting is intended to be the firewall to protect the independence of the stations,†Schiller told me. “But CPB is governed by political appointees and the top executives are former political operatives, not media people. Their jobs are contingent on continued funding from Congress and that creates a disincentive to provide funding for anything controversial. This is an untenable structure for supporting independent journalism.â€
The Supreme Court has long disfavored laws and taxes that target one outlet for punishment or preferential treatment, arguing that such machinations by the government can be easily used to suppress free speech. Nobody wants to bite the hand that feeds it. How might the court feel about special financial set-asides from the government to newspapers? It’s easy to imagine the court consistently applying its current standards on how to treat the press by insisting that all the government largess be offered “equally†to all press comers—big dailies, regional dailies, small local papers, weeklies, as well as magazines. The prospect of every publication going on the government dole alarms me because it invites steady mischief from politicians. The PEN America crowd seems to think that potential nightmare can be wished away by erecting “Safeguards to ensure that public funding does not impinge on the editorial independence of any news organization.†Good luck with that.
Setting aside my objections to press subsidies for a moment, how exactly would the subsidies be distributed? Would taxpayers be expected to underwrite the entire paper, including the entertainment and lifestyle coverage found in the sports, food, fashion, decor, travel, and comics pages? Or should the subsidy money be earmarked only for hard news about government and business? Would book reviews be fit for subsidization? Or would that depend on the subject of the book? How about real estate coverage? The opinion pages? Would government support go to journalistic incumbents only, or would newcomers who want to start publications qualify? Would the bailout favor print publications over online outlets?
If newspaper bailouts are out, what should the government do? Steven Waldman at Report for America recently proposed, among other things, that the feds spend $500 million worth of public service ads that will be placed in local news operations. In the U.K., the National Union of Journalists has advocated a “windfall†tax on tech companies to support failing news operations. In recent days, Sen. Maria Cantwell, (D-Wash.) and three other senators (two of them Republicans) have sent leadership a letter insisting that newspapers get included in the next round of Paycheck Protection Program money. But none of these pitches solve the problem of failing newspapers, they just kick it down the road, dooming the news to be a government subsidiary forever.
Like me, renowned media gazer Frederic Filloux thinks coronavirus marks the final beginning of the end for print. Calling it “the embodiment of the ancient world,†he says the costly manufacturing and distribution of newspapers is untenable in a time of germ and virus avoidance. Publishers and editors can’t expect to hold the whole traditional newspaper bundle of news, entertainment, and advertising together as they complete the transition to digital news. They need to be more selective about what content they decide to create and—perhaps most critically—locate the readers who are willing to pay for it. It won’t be easy and it won’t be as good as the newspapers from the golden era, but if it can be self-sustaining, it will help maintain the independence that’s essential to good newspapering.
I suspect this argument will be rejected and that stimulus dollars will be minted and sent to newspapers across the land based on the supposition that if we’re going to assist airlines and steakhouses, why not newspapers, too? People might not love newspapers, but they like them enough to continue to read them if they can get somebody else to foot a part of the bill. For as long as the money holds out, these subsidized newspapers will appear to be viable. But don’t be fooled. You can attach a ventilator to a corpse and make it look like it’s breathing, but it’s quite another matter to resurrect it.
I agree with the author. I believe most print publications have lost the ability to serve their communities. They no longer provoke thought or provide verified facts for the readers. I hope the other media pay close attention.
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