How Congress Can Truly Help Local Journalism

Over the past year, in response to both the pandemic and the “infodemic” surrounding it, there’s been more interest on Capitol Hill about the problems facing the Fourth Estate than ever before.

Several bills have been introduced this year — backed by influential members who might actually be in a position to pass them. And with trillion-dollar legislative packages potentially moving forward in the months ahead, there’s a genuine possibility that one or more of these proposals could end up attached to a must-pass bill.

So now is a good moment to look closer at these bills and to highlight what’s worthy in them, what’s worrisome — and what’s still missing from the current debate.

The Local Journalism Sustainability Act

The word salad and acronym overload that goes into naming legislation can make it hard to keep track of which bill is which. So it may be easier to think of this one as “The Tax-Credit Bill.”

A House version that originally appeared in the last Congress has bipartisan support and more than 60 co-sponsors. But the big news is that Sens. Maria Cantwell (D–Washington), Ron Wyden (D–Oregon) and Mark Kelly (D–Arizona) introduced it in July. Cantwell chairs the Senate Commerce Committee, and Wyden chairs the Senate Finance Committee — which means this effort now has some real juice behind it.

There are a number of things to like — and one big problem — in this legislation, which contains three main elements: a tax credit for local-media subscribers, a tax credit for small businesses that advertise in local media and a tax credit to outlets that employ local journalists.

The bill would create a $250 individual tax credit for subscribing to local media or financially supporting a nonprofit organization doing local news. This is a good idea, especially with the inclusion of noncommercial media. But it would be even better if the tax credit were refundable and available to more than the (mostly higher-income) individuals who itemize their tax returns.

Will this bill fundamentally change the bottom line or structures of the media system? No. But in and of itself, giving incentives to individuals to subscribe to local media is worthwhile.

The bill’s advertising tax credit is targeted at small businesses and would cover up to $5,000 in ad spending the first year and $2,500 in subsequent years. These smaller businesses are the ones most likely to advertise in community-centered and ethnic-media publications.

A few more ad dollars for these vital outlets would be a good outcome. However, this is still a limited and very indirect subsidy when it comes to supporting journalism, and there’s no guarantee any additional ad revenue would reach newsrooms.

The bill also includes tax credits — of up to $25,000 per journalist in the first year and $15,000 in subsequent years — to encourage the hiring and retention of local journalists (defined here as “any individual who provides at least 100 hours of service” in a three-month period by “collecting, photographing, recording, writing, or reporting news or information that concerns local events or other matters of local public interest”). This could help keep a few more reporters on the beat during and after the pandemic.

The key policy question is who should qualify for this kind of support — both in terms of the best use of tax dollars and which institutions have demonstrated a commitment to quality local journalism.

And that’s the big red flag: Commercial TV broadcasters simply don’t need a bailout. The hedge-fund vultures destroying local newspapers shouldn’t get one either.

Yet as written, the very companies whose cookie-cutter, consolidate-and-cut-jobs approach is killing newsrooms would be among the bill’s largest beneficiaries.

Locally owned newspapers, emerging community-focused outlets and public media need the kind of support this bill offers — as a bridge to more transformative policies and investments that could create and sustain these kinds of news organizations for the long term.

But the commercial-broadcasting business (as detailed below) is much healthier financially than what used to be called print thanks to election ads, fees collected from cable companies and its completely different business model. And like the hedge funds, broadcasters should be held responsible — not rewarded — for their role in worsening the journalism crisis.

The Journalism Competition and Preservation Act

Holding companies responsible for harming journalism is also the stated motivation of the Journalism Competition and Preservation Act, a bill that aims to counteract the growing power of platforms like Facebook and Google by — and this is where it gets fuzzy — encouraging broadcasters and publishers to collude. Maybe call it the “Anti-Antitrust Bill.”

The bill, which is supported by Rep. David Cicilline (D–Rhode Island) and Sen. Amy Klobuchar (D–Minnesota) — the chairs of the antitrust subcommittees in the House and Senate — would create an “antitrust exemption” when media outlets negotiate with the platforms over advertising and subscription rates. These legislators have been at the forefront of investigating the platforms and trying to reinvigorate antitrust enforcement. But this particular bill has major flaws.

The biggest problem is who stands to benefit. And in a bill strongly backed by the News Media Alliance (the newspaper publishers) and the National Association of Broadcasters (your local-TV lobbyists) — spoiler alert — it’s not going to be the little guy or the local innovators who are reinventing community journalism. The primary beneficiaries would be the biggest hedge-fund-run newspaper chains and conspiracy-mongering TV conglomerates like Fox and Sinclair.

Another serious shortcoming is that there’s nothing in the current legislation that would transfer any financial gains from this bargaining power back to the workers in newsrooms. These big media firms are virulently anti-union, with a long history of divesting from serious reporting.

As Free Press Action wrote in testimony to the House earlier this year:

“Public policies and public investments in journalism should instead require that any new revenue streams be directly reinvested in journalism and in paying the reporters who produce it in newsrooms every day. Media companies that benefit from such public policies must be restricted from using the revenue for share buybacks, debt payments, dividends, or anything else that doesn’t directly support local reporting.

“Recipients of government support should also be required to commit to public-interest conditions, including commitments to serve the information needs of local communities. Funds should go toward hiring more journalists, editors and producers of color. And policies should target funding toward underserved communities and news deserts abandoned by corporate media rather than going to the companies that left them behind.”

An enemy-of-my-enemy-is-my-friend approach to policymaking won’t help local news. Free Press wants to curb Facebook’s power as much as anyone, but helping Fox News is not the way to achieve that goal. Allowing “old” media companies to collude on ad rates in the hope that they will invest in local-news coverage will only prop up institutions that have fueled the journalism crisis and harmed people of color and other communities.

Broadcasters don’t need a bailout

The problem at the moment with the leading approaches to media policymaking on Capitol Hill is that the measures with the most momentum will benefit existing media giants — the very same companies that have gutted local newsrooms, spread disinformation and profited from runaway media consolidation.

Of course, these are also the companies with the most lobbying clout.

Broadcasters have used their influence to lobby their way into both of these bills. There’s a widespread belief among insiders on the Hill that any legislation aiming to help journalism doesn’t stand a chance unless it includes the broadcasters. But that political calculation skews the policy process from a clear-eyed analysis of the different financial realities that face the publishing and broadcasting businesses — and the types of policy interventions that would actually help foster better local news.

All of these well-intended legislative efforts come at a time when newspapers — long the primary institutions producing and originating in-depth local journalism — continue to see sustained economic and employment declines as the internet erodes their ability to monopolize local print advertising and hedge funds swoop in to pick at the wreckage. But local broadcasting and local publishing are two completely different industries from both financial and functional perspectives.

Both rely primarily on advertising revenue, but local-TV ad revenue continues to grow as newspaper-ad revenues steadily decline. Broadcasters have enjoyed exponentially growing retransmission revenue — payments from cable-TV companies on behalf of their subscribers, who pay whether or not they watch all the channels — while newspaper-subscription revenues continue to vanish.

Though TV employs some talented and dedicated local reporters, the industry has never been on the same level as print in terms of the depth and quality of its journalism. Yet according to the Bureau of Labor Statistics, over the past decade the number of TV reporters increased 34 percent (to 10,100), while the number of newspaper reporters declined 42 percent (to 16,790).

BLS data show that local-TV broadcasters did initially hire back a large number of the workers they laid off in the early months of the pandemic. But then broadcasters resumed layoffs earlier this year, even as their revenues recovered. In contrast, the newspaper industry has lost 15 percent of its work force since February 2020, and its revenues continue to fall off a cliff.

While there are legitimate questions about the wisdom of throwing money at the hedge-fund-dominated local-newspaper industry — and good reasons to exclude the vultures from these bills — newspapers have dismal balance sheets and limited future prospects. By contrast, local-TV broadcasters are thriving and don’t need more government largesse, particularly when these scarce funds could be used to support a vastly underfunded noncommercial media sector.

If we want to see broadcasting support better local journalism, let’s restore media-ownership limits and break up the chains that have twisted the industry’s economics and allowed a handful of companies to own hundreds of stations nationwide. If these giants want special benefits for providing local service, we should return their stations to local owners, incentivize ownership by women and people of color, and restore local accountability.

The Future of Local News Act

A third piece of significant journalism legislation introduced in 2021 is the Future of Local News Act from Sens. Brian Schatz (D–Hawaii), Michael Bennet (D–Colorado) and Klobuchar in the Senate and Rep. Marc Veasey (D–Texas) in the House.

Call this one “The Study Bill”: It would fund a federal committee to study the future of local news. While it contains far fewer detailed policies than the bills discussed above, Free Press Action supports this legislation as a way to encourage a deeper exploration of equitable and innovative policies to support local news.

We haven’t yet seen federal legislation that considers the kind of truly transformative investments and approaches that are needed to both address the current crisis and point toward a sustainable and just future for local news. A well-organized committee with diverse stakeholders could help make that happen and open up more political space to expand Washington’s narrow sense of what’s possible in media policymaking.

(A federal committee could also learn from what’s happening in places like Massachusetts, which passed a bill last year to create a state commission to study the problem of news deserts and explore the future of local news.)

While Free Press Action welcomes a mix of models and approaches, all of the evidence suggests that in most places a sustainable future for local news will be noncommercial. If the goal is democracy-sustaining local news, we need policies that dramatically increase levels of public support, help legacy outlets transition to nonprofit or other community-service-focused models, promote diverse owners, prioritize communities of color that have long been underserved — and don’t prop up outlets that have failed to serve local communities or have actively harmed them.

What else should Congress do?

What would other transformative ideas look like? We have a few ideas.

Double funding for public media

In 2021, it’s folly to continue to cling to the hope that private industry alone will create a viable business model for local journalism. The realities of the journalism crisis call for a major new investment in public media focused on local newsgathering. Unfortunately, the existing U.S. public-media system has been largely absent from debates over recovery and infrastructure, let alone from serious proposals to rescue local journalism.

Though it will likely require new leadership at the board and executive levels of the Corporation for Public Broadcasting, the Biden administration and Congress should act now to invest far more in public media and redirect those funds to local newsgathering. In her recent paper for the Day One Project, Hilary Ross of Harvard’s Berkman Center makes a compelling case for rechartering a new Corporation for Public Media and doubling annual public-media appropriations to $890 million — a small amount amid the trillions in proposed infrastructure investments. Ross also calls for funding a wider array of nonprofit local outlets focused on meeting community-information needs.

Tax targeted advertising

There’s a lot of noise in Washington about the need to do something about the power of Facebook and Google — and that desire has motivated the Journalism Competition and Preservation Act, Australia’s “link tax” and other similar proposals. But there’s a better approach to making the platforms pay for the damage they’ve done — one that doesn’t encourage collusion or line Rupert Murdoch’s pockets.

As Free Press first proposed in this 2019 paper, a small tax on online targeted ads could produce billions in revenue that could be redirected to support local news. Think of it like an anti-pollution tax, though in this case it would build a healthier news ecosystem.

Create civic-info funds in all 50 states

What could you do with that money? One idea would be to use the funds from the ad tax — or support from the U.S. Treasury — to fund block grants to the states to support local projects.

The model here is the New Jersey Civic Information Consortium, which Free Press Action helped conceive and create alongside community allies in the state. This independent nonprofit, funded by an appropriation in the state budget, has already moved $500,000 to innovative local projects in New Jersey (check out the list here). The consortium is set to receive $1 million more next year.

With a federal investment of a few billion dollars, you could build out, streamline and sustain this model in every state, pairing the core federal dollars with state funds as well as contributions from private philanthropy. These state civic-info funds would have a mandate to fund local-journalism and civic-technology projects, with an emphasis on efforts designed to reach low-income communities, communities of color, immigrants and rural residents, who are often excluded or underserved by commercial media.

The New Jersey experience — where the Civic Info Bill passed with grassroots support and bipartisan backing in the statehouse — shows that we don’t have to simply accept the status quo and downward spiral of local news. We can actually use public policy to encourage new forms of support and innovation.

Scale this kind of approach, and you can seed a new noncommercial local-media infrastructure designed to meet community needs, not serve Wall Street greed.

Reckon with the history of media policymaking

To have any hope of building an equitable and just media system that meets the needs of everyone in the United States, we must confront how we got the system we have and who it has been designed to serve: namely white folks, rich people and big corporations.

Our Free Press colleagues working on Media 2070: The Media Reparations Project have written extensively about U.S. media’s racist history — visible everywhere from runaway-slave ads placed by George Washington to present-day coverage of Black Lives Matter. Media 2070 is sparking crucial conversations about what it would look like not just to apologize for the past but to take actions, change policies and dedicate funds to repair it.

This isn’t just about the actions of legacy media institutions. The government needs to reckon with the history of violence, intimidation and censorship aimed at Black journalists and the Black press and account for the federal actions that created the media system we have today — from the initial distribution of broadcast licenses to the mergers, tax breaks and other special favors that have cemented so much media power in so few hands.

An important step in this process is already underway in Congress. In June, 25 House members, led by Reps. Jamaal Bowman (D–New York), Yvette Clarke (D–New York) and Brenda Lawrence (D–Michigan), sent a letter urging the Federal Communications Commission to examine how the agency’s policy choices and actions have harmed Black people and other communities of color.

As the full FCC takes shape in the Biden administration, we must ensure that this work is a top priority. You can add your voice here.

Building a bridge beyond the status quo

These are four of the priority areas we’re exploring and advocating for here at Free Press and Free Press Action right now. Legislators should hold hearings on the bills and ideas discussed here and on other innovative proposals that have emerged.

For example, Free Press co-founder Robert McChesney has an ambitious plan for a publicly funded system in which residents can vote on redistributing federal dollars to support their preferred local journalism outlets. Report for America President Steve Waldman has proposed replanting legacy newspapers with local owners. There are calls to redirect federal advertising dollars to ethnic-media outlets. And Rep. Ted Lieu (D–California) envisions creating a modern-day version of the New Deal-era Federal Writers Project.

Or add your better ideas here.

It’s encouraging to see Congress considering ways to help local journalism. Some of the measures being debated might help keep a few more reporters on the job and a few more newspapers on the doorsteps for a little while longer. But this is just a bridge — a fairly rickety one — to the kinds of transformative change and major investments local communities need.

What’s clear is that as long as congressional efforts are focused primarily on propping up existing institutions, we won’t actually save — or better yet, reinvent and reimagine — local journalism. Journalism is a public good that’s essential to a vibrant multiracial democracy. We need solutions that meet community-information needs and amplify new voices, not measures that prolong failing business models or further entrench the status quo.