Policy-palooza: How Congress, state and local governments can stabilize local news – Knight Foundation

Policy-palooza: How Congress, state and local governments can stabilize local news

Here’s a guide to all the potential bills – and existing New Jersey and New York City programs – to help make local news sustainable

It’s been the best of times and worst of times for local news publishers. They have been decimated by shifting digital business models, while attention and targeted ads have moved to the tech giants. But they have also done incredible work covering the COVID-19 pandemic, providing timely information on case counts, testing and vaccination locations and more. And there has been a growing interest by a broad coalition of politicians to help put government support into action.

In fact, there has been so much action that it’s hard to keep track of all the potential bills and ideas. Steve Waldman, chair of Rebuild Local News and president of Report for America, told me that the collapse of local news has been so bad that it has led to policy approaches that go beyond traditional support for public media.

“[Public media] should be part of the solution, but we shouldn’t be reliant on them,” Waldman said. “These new approaches to supporting local news have given room to people of different ideologies and different journalism groups to support them. They don’t have an ideological problem with government helping somehow. ”

Waldman’s favorite approach is the Local Journalism Sustainability Act and its tax credits for subscribers to local news, which he says “does it in a way that answers concerns about editorial independence and political manipulation.” But there are other contenders before Congress, including the Future of Local News Act (which would create a commission) and the Journalism Competition and Preservation Act (creating an antitrust exemption for publishers to collectively bargain with tech platforms). And of course, many proponents for local news remain interested in increasing – even doubling – support for public media, getting the U.S. closer to what governments do in many other countries.

Still, my source on Capitol Hill told me the chances of any bill making it to law are optimistically 33%, and what makes it through to the other side might not look exactly like the various proposals today. Perhaps it’s better to look to a state such as New Jersey that has already created direct funding programs for local news, and a city such as New York that has staked 50% of its agencies’ advertising budgets to small community media outlets.

After talking with many of the people who support policy proposals for local news, here’s a look at the ideas getting the most traction.

Local Journalism Sustainability Act

Rebuild Local News graphic

What it is: A bipartisan bill that would give tax credits up to $250 for people who buy subscriptions or make donations to local news outlets with fewer than 750 employees. It would also provide a payroll tax credit up to $25,000 for local news organizations that retain journalists, and provide a $5,000 tax credit for small businesses that advertise with local media. The Rebuild Local News coalition has a good overview of the bill here.

Pros: Support comes from tax credits rather than direct funding for local news outlets, which would require someone or some group to decide who gets funding. As Waldman notes, the bill is “future friendly and platform neutral,” supporting nonprofits and even future startups rather than existing legacy publications. Rebuild Local News includes 3,000+ local news organizations, including everyone from the Institute for Nonprofit News (INN) to National Association of Hispanic Publications (NAHP) to LION Publishers to the National Newspaper Association (NNA). 

The worry with many government assistance programs is that the benefits will go to the larger media organizations with the most lobbying muscle. This bill gives the smaller players more help. 

“The Local Journalism Sustainability Act gets the mix right by focusing support on news organizations that meet important parameters; local control, and local reporting resources that produce genuine community coverage,” said Sue Cross, executive director and CEO of INN. “That narrows the focus to organizations — both nonprofit and for-profit — that are putting resources into local community coverage rather than extracting profits without sustaining coverage.”

Cons: No bill is perfect, and the amount of tax credits might not give subscribers and donors enough incentive to give. And payroll tax credits aren’t the same as getting money in grants directly from the government. It might not be the perfect solution for stabilizing local news in America, but it does provide a good bipartisan start, which could lead to more ambitious ideas in the future.

What’s next: The bill got 78 sponsors in the last Congress, and was reintroduced in the current House of Representatives on June 16 by Reps. Dan Newhouse (R-Wash.) and Ann Kirkpatrick (D-Ariz.). The question remains whether the bill will gain supporters in the U.S. Senate, where Sen. Maria Cantwell (D-Wash.) has made a big splash with her support for local news (see item below).

Future of Local News Act

What it is: This bill would establish a committee to study the “role of local news gathering in sustaining democracy.” It is sponsored by a mix of senators and representatives, with one Republican and four Democrats signing on. The committee would have one year to study the issue and report on its findings – but no actions would necessarily come out of the process.

Pros: Shining a spotlight on the lack of local news and its resulting lack of civic information would be good for average Americans who are unaware of local news publishers’ struggles. Craig Aaron, co-CEO for Free Press, said that his advocacy organization supported the bill because Free Press would like to see a “deeper study of the equitable and innovative policies to support local news.”

Cons: It’s just a committee, and those who want action – and money flowing – sooner would have to wait at least a year. Congress is infamous for taking tough problems and sending them to a committee to study.

What’s next: In May, there were twin bills put before the Senate and House, so it’s a waiting game to see if it garners more sponsors and committee votes. The idea itself came out of a PEN America report, “Losing the News,” and PEN America interim Washington director Dokhi Fassihian told Poynter that “there does need to be a very careful look at what works best and what won’t work… This is a larger, structural – almost infrastructural – problem.”

Journalism Competition and Preservation Act

What it is: This bill would allow local news publishers to collectively negotiate with tech giants such as Facebook and Google. The idea is to help publishers fight back against tech companies that have been taking a bigger cut of digital advertising each year. Australia took this idea even further by making tech companies pay for links to original news stories on their platforms.

Pros: Would make a small dent in the growing power of tech platforms in digital news. 

Cons: Unfortunately most of the gains would be made by large media corporations and the hedge funds that control most newspapers. 

“Allowing ‘old’ media companies to collude on ad rates in the theoretical hope they will invest in local news coverage won’t work to do anything but prop up institutions that have failed in their coverage of those communities and are themselves a major cause of the crisis in local news,” said Free Press’ Aaron. He pointed to a better idea for taxing targeted advertising, which could produce “billions in revenue that could be directed to support local news.” Aaron also noted that the Media 2070 reparations project is even more transformative for legacy media that have had a racist past.

What’s next: The bill has been re-introduced to both houses of Congress in March (it was previously introduced in 2018 and 2019), and has the support of 31 bipartisan co-sponsors. It has the support of state press associations and the News Media Alliance, but associations representing smaller news outlets are more skeptical. While Facebook recently had a couple of antitrust cases dismissed in court, it continues to advertise about how it welcomes regulation; it’s just not clear exactly what regulation it will support.

Hitching a Ride on an Infrastructure Bill

What it is: As Congress debates a bipartisan infrastructure bill and a more progressive Democratic infrastructure bill, proponents have pointed out that local news should be considered as part of our democratic infrastructure. Because the original infrastructure bill contained plans to expand broadband, the idea is that local news can piggyback onto that. It also follows on previous stimulus funding, including the CARES Act and PPP funding, that made their way into local news publishers’ coffers.

Pros: These are active bills that have become the major focus for the Biden Administration. In April, Sen. Maria Cantwell (D-Wash.) told a subcommittee hearing that local news should be considered as “critical infrastructure,” calling on spending $2.3 billion in grants and tax breaks for local newspapers and broadcasters. As author and professor Victor Pickard put it in an essay for The Hill, “infrastructures must be maintained regardless of their profitability and such glaring market failure should necessitate government intervention. Public goods, after all, require public investments.”

Cons: There are a lot of people vying for a spot in the crowded infrastructure bills, and the idea that local news is part of the country’s infrastructure is even more creative than efforts supporting child care and home health care providers.

What’s next: The infrastructure bills appear split into two efforts, and local news could make it into the bipartisan bill under broadband, or go into the reconciliation effort by Democrats that has a more expansive view of infrastructure. But in the end, the Biden Administration is more attuned to “kitchen table” deliverables like a child tax credit that would put money in Americans’ pockets than to supporting local news.

Increasing Support for Public Media

What it is: Big Bird and PBS, along with “Wait Wait… Don’t Tell Me!” and NPR, have for decades received subsidies from the Federal government through the Corporation for Public Broadcasting. Long a lightning rod for the political right, funding has dwindled over the years for public media, but has revived a bit during the pandemic with $250 million in funding from the CARES Act and American Rescue Plan Act. How about taking that momentum and doubling the regular support for public media, continuing the focus on supporting rural and underserved communities?

Pros: There is no need to create a new funding mechanism or system, as the CPB has been functioning since the late 1960s. Of late, public media has become more focused on covering local news in-depth and creating important collaborations such as America Amplified. Hilary Ross, senior program manager at the Berkman Klein Center at Harvard University, said she was glad to see increased funding for public media in the stimulus acts, and would like to see regular Congressional appropriations doubled or more – with an emphasis on funding digital innovation.

“I’m also interested in proposals to expand CPB’s mandate to become a more expansive Corporation for Public Media (CPM) that funds nonprofit, local digital or print outlets in addition to continuing to fund public broadcasting,” she said.

Cons: Conservatives continue to demonize public media and likely would not support increased funding, so Democrats would need to push through the funding in reconciliation efforts that don’t require 10 Republican senators to sign on.

What’s next: The Biden Administration’s current budget proposal calls for a modest increase in funding for the CPB, rising from $465 million to $475 million in 2024. Raising more funding would be difficult, but a recent report from the Forum on Information & Democracy calls for “A New Deal for Journalism,” with world governments committing to spending 0.1% of GDP on supporting journalism. Rasmus Kleis Nielsen, a professor at the University of Oxford and director of the Reuters Institute for the Study of Journalism, told me that the U.S. could make a big difference by following the example of Denmark.

“If the United States committed the same percentage of GDP that Denmark provides in direct support for private publishers’ investment in news, it would amount to about $3.3 billion annually, significantly expanding local news publishers’ ability to invest in covering their communities,” he said. “If politicians are committed to supporting independent journalism, public support can make a significant difference without undermining editorial independence or crowding out commercial providers.”

State Support for Local News, Jersey Style

What it is: Free Press Action brought together various stakeholders in New Jersey to help create the independent Civic Information Consortium, a nonprofit with a mission to boost local news and civic engagement across the state. While it started with $5 million in funding, that was lowered to $2 million, and eventually $500,000 was approved this year, with grants going to a range of community news and information projects such as Hammonton Gazette, Newark Water Coalition and VaccinateNJ.com.

Two other states are trying to support local news as well: Massachusetts passed a law similar to the Future of Local News Act, creating a commission to study the issue of declining local news in the state, but has yet to propose solutions. Connecticut is working on a bill that would limit the amount of debt that the new owner of the Hartford Courant, the much-maligned hedge fund Alden Global Capital, could take out, also allowing the attorney general or subscribers to the paper to sue the Courant for taking on excessive debt.

Pros: This is real money granted to local news and information outlets around the state of New Jersey, taken from money generated in spectrum auctions, and managed by a nonprofit without government intervention.

“I hope everyone looks at what’s happening in New Jersey,” said Free Press’ Aaron. “We worked with an array of allies to pass bipartisan legislation creating an independent board to fund innovative local projects. The initial grants just went out and the projects are incredible and incredibly local. Imagine what we could do with more significant and sustained funding. I think the New Jersey Civic Info Consortium model could be adopted and adapted in any state — and paired with federal support as well as private philanthropy.”

Cons: The funding for the Civic Information Consortium has fluctuated due to the whims of the governor and state legislature. Spreading this idea to other states would take time and a lot of lobbying efforts.

And in Connecticut, the new rules on debt might have unintended consequences. 

“It’s tricky because there are different buyers and sellers around the country,” said Elizabeth Hansen Shapiro, CEO of the National Trust for Local News. “We used debt in Colorado to make the transaction quickly [buying a chain of local newspapers]. It can be the right tool, if you have a view to a path to sustainability but can be a total albatross in other cases, where the underlining finances don’t merit it. There could be unintended consequences with that rule [in Connecticut]. Let’s think about the needs of family owners, rather than thinking about metro papers and corporate owners.”

What’s next: New Jersey continues to be an interesting model for other states to consider. Could finding support in states be easier than at the federal level? And the idea of setting up a commission as Massachusetts is trying could be a way to marshall support and educate the public.

Marketing Support from Cities, Big Apple Style

Brooklyn Borough President Eric Adams

What it is: In 2019, Mayor Bill de Blasio signed an executive order directing all city agencies to spend at least 50% of their marketing budgets on small, community news outlets around the city. The Center for Community Media at the Craig Newmark School of Journalism at CUNY found that the city placed nearly $10 million worth of ads in more than 220 print and digital community media outlets in fiscal year 2020. On June 17, the City Council passed a law creating a new Mayor’s Office of Ethnic and Community Media, to help strengthen the relationship between the city and community media outlets.

Pros: This is a program that would be easy for cities and towns across American to emulate. Victor Pickard, author and professor at University of Pennsylvania, told me that government advertising is a great way to subsidize local news. “Other countries such as the U.K. also deployed this kind of subsidy, especially around public health information during the pandemic,” he said. “Government public service announcements could be one stream or financial support toward subsidizing the local journalism that we need.” 

Cons: The program is still subject to the whims of a city government and mayor that could change their mind from one administration to the next. There is also a danger of mayors picking and choosing which local media outlets they like (perhaps the ones with the most fawning coverage), though creating a firewall between the marketing budgets and mayors might help.

What’s next: It’s a great sign that the City Council, and specifically Brooklyn Borough President Eric Adams are big supporters of the program, especially as Adams recently won the Democratic mayoral primary. Can this serve as an example for other municipalities to boost community news with an existing marketing budget? The Center for Community Media report thinks there is hope, with one caveat:

“The government agencies’ pioneering efforts to advertise in community outlets and build lines of communication hold promise, but the challenge is finding a way to keep their efforts going in years to come. There is a critical need for more public funding of local and community news outlets.”

Mark Glaser is a consultant and advisor with a focus on supporting local and independent news in America. He was the founder and executive director of MediaShift.org, and is an associate at Dot Connector Studio, and innovation consultant at the New Mexico Local News Fund.

Photo (top) by Michal Matlon on Unsplash

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