Reeling in a federal boost for local journalism remains elusive

Betty Q. Hixson

Last fall, prospects looked bright for a federal subsidy that would pay up to half the salary of local journalists. Didn’t happen. The measure had been tucked inside the massive $3.5 trillion congressional budget reconciliation bill — aka the Biden administration’s Build Back Better bill. When Build Back Better stalled, help for local journalism went off the table indefinitely, too.

The Local Journalism Sustainability Act may return. But for now, Steven Waldman, who heads Report for America and a coalition of advocates for the bill, conceded during a Knight Foundation media forum last month that it’s “in a coma.”

A scaled-down version of budget reconciliation could again include LJSA. That’s no sure thing, though. Furthermore, Sen. Joe Manchin (D-W.Va.) continues to block reintroduction of the bigger budget package, though he lately has signaled a willingness to compromise.

Another scenario would be to decouple from the budget bill and seek approval of LJSA by itself. That strategy is also problematic, however. Budget reconciliation requires a simple majority vote for approval in the Senate. Separate breakout legislation would need to go through committees and get 60 votes. A subsidy for journalism is probably not so popular as to command those 10 added votes.

The last few months have not been entirely bleak, however, for those who think the government should take note of the dismal effects of deep cuts and closures at newspapers and then do something for local news — commercial, nonprofit or both.

At a minimum, the longstanding convention of walling off the Fourth Estate from any government entanglement has stopped being an article of faith.

In last year’s version, LJSA would have provided a credit for half the salary of local journalists on earnings up to $50,000. That would be in effect for a year after the bill’s passage. The credit would then run for four more years but at 30%. All local journalists including those at TV stations and digital startups would qualify.

Absent federal action, several state legislatures have taken up (but not yet passed) adaptations of the bill.

In Wisconsin — where the main sponsors are Republican — proposed legislation would give small businesses a tax credit for buying advertising in local outlets. That had been part of the industry draft of LJSA but was not included in the congressional version. The approach has the appeal to legislators of providing a benefit to the small business sector as well as to local news.

The Colorado legislature is considering similar legislation to Wisconsin’s and it has cleared two committees.

That bill has a backstory. One supporter is Rep. Tom Sullivan, whose son Alex was killed in the Aurora theater shooting a decade ago. Sullivan has written, “the people who have really understood, who really get what happened that day & how the people in my community were impacted, have been the Aurora Sentinel. And that’s because they’re right down the street. They drive by that theater every day.”

New York, New Jersey and Virginia have considered variations, and advocates in several more states are readying legislation for 2023. New Jersey already provides some funding for a local news innovation fund.

New York City Mayors Bill de Blasio and Eric Adams have taken another tack that was considered in Colorado and may turn up elsewhere — directing that at least half of government advertising be placed in local media.

Back in Congress, the Journalism Competition and Preservation Act appears to have developed fresh momentum after having run out of steam in 2021. That bill would waive antitrust restrictions and allow news companies to negotiate collectively with Google and Facebook to be compensated for use of their content.

Trib Total Media President and CEO Jennifer Bertetto, left, greets Chair Sen. Amy Klobuchar, D-Minn., right before a Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights hearing entitled “breaking the news – journalism, competition, and the effects of market power on a free press” on Capitol Hill in Washington, Wednesday, Feb. 2, 2022. (AP Photo/Andrew Harnik)

Sen. Amy Klobuchar (D-Minn.) chaired a subcommittee hearing on Feb. 2, boosting the measure of which she is lead sponsor while also allowing a platform for critics. Besides making the policy case that strong local journalism is essential to a strong democracy, Klobuchar has indicated the cause is personal for her. Her late father was a longtime columnist for The Star Tribune in Minneapolis.

Work remains, though. Sponsors are redrafting last year’s version of the bill to fix flaws and strengthen the negotiating punch news outlets would gain.

Borrowing an idea from Australia’s News Media Bargaining Code, the revised JCPA would mandate “baseball-style” arbitration. That means that both the news companies group and the platform companies would propose an amount. The arbitrator would then pick one or the other — but not a midpoint between the two. Such a structure speeds the process and discourages rounds of posturing with extreme offers and counteroffers.

I get regular updates from Danielle Coffey, executive vice president and general counsel of the News Media Alliance, who leads the JCPA lobbying effort. A package of changes and refiling could be forthcoming in days, and legislation could proceed quickly from there.

Or not. Consideration could drag on for weeks or months or longer. And don’t look for the powerful platform companies and their lobbyists to roll over now for a belly rub.

A third positive over the last two months has been increased public exposure to the case for revitalizing local news as newspapers’ finances and the comprehensive coverage they used to provide both fade.

“60 Minutes” had a crisply reported and edited segment on the crisis as part of its Feb. 27 broadcast (which was the top-rated broadcast that week with 8.3 million viewers).

After first illustrating the decline with a sympathetic profile of a harried one-man-band reporter at the Pottstown (Pennsylvania) Mercury, the “60 Minutes” piece turned to possible solutions. Waldman, co-founder and president of Report for America as well as chair of the Rebuild Local News Coalition, served as protagonist, making the case for innovation with both philanthropic and government support.

PEN America, an advocacy organization for writers and free expression, continues to press for the creation of a federal commission to document the problem and recommend solutions. No matter that such studies have been done a number of times already and done well (including by PEN America itself). Another broad, bipartisan look under government auspices could form a base for action.

I also learned during a recent PEN America webinar that Rep. Mark DeSaulnier (D-Calif.) is backing yet another bill. It would facilitate the IRS process allowing for-profits to convert to nonprofit or public purpose status, as The Salt Lake Tribune did when it was reincorporated as a 501(c)(3) in 2019.

So there is no shortage of good thinking and research around a role for government. Concrete proposals continue to advance — but slowly.

In this update I would be remiss not to note a couple of emerging problems as well. The more real LJSA and JCPA become, the more opponents turn up with objections of various kinds.

At Klobuchar’s hearing, ranking minority subcommittee member Sen. Mike Lee (R-Utah) trashed the JCPA and had a pair of expert witnesses as reinforcement. Newspapers dug themselves into a hole by failing to reinvent themselves in a timely fashion for the digital era, Lee said, and “the last thing we should do is to accept a cartel — or create one — colluding against a business partner.”

Lee and other Republican members seemed to have a particular beef with national media like The New York Times and The Washington Post. That objection may ease since the two are not eligible for the LJSA subsidies and could be excluded in the rewrite of JCPA.

Nor is the industry’s united front without a few cracks. Officially everyone supports each other’s bills. However, the News Media Alliance has been advocating for the antitrust exemption to negotiate collectively with the platform companies and still puts that as first priority and the most lasting solution.

Conversely, it rankles some smaller organizations — especially nonprofit digital startups who are pushing for the LJSA — that a big chunk of the subsidy could go to papers controlled by big conglomerates like Gannett and Hearst, or by hedge funds like Alden Global Capital.

The News Media Alliance’s Coffey has heard that and isn’t buying. She emailed me, “The Hill (and most reasonable people) have stood firm that the small newsrooms and reporters employed by them across our country are still small, in need of help, and should not be penalized because of who they are owned by. When you start picking and choosing, that’s a very slippery slope in deciding what news is worthy of being saved.”

I first wrote about the current wave of interest in government aid for the sector in April 2020. It has taken two years just to get to this midpoint. I remain a bit of an optimist, though on the theory that getting from a good idea to meaningful government action typically takes a very long time to develop.

Reeling in a federal boost for local journalism remains elusive

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