Yes, you read that right.
As the “MyPillow guy” claims President Trump is “enthusiastic” about the use of the plant oleandrin to treat the coronavirus, the importance of professional news reporting grows ever greater.
Yet 57% of the counties with Covid-19 infections lack a daily newspaper, according to the Brookings Institution. Dangerous lies can spread like wildfire in so-called news deserts, which lack fact-finding reporters to interview officials and residents.
But with Congressional negotiations on a second relief bill underway, a bipartisan coalition of U.S. representatives is standing behind local news; organizations in desperate need of a healthy cash infusion.
U.S. Representatives Ann Kirkpatrick (D-AZ) and Dan Newhouse (R-WA) introduced the Local Journalism Sustainability Act in July. The bill, now sitting in the House Ways and Means Committee, has 26 Democratic and 17 Republican co-sponsors. The bill aims to support local media via tax credits to publishers and broadcast outlets, advertisers, and newspaper subscribers.
Thirsty for News
To qualify as a local news publication under the bill, 51% of print and digital subscribers need to live in the state or territory (such as Puerto Rico) where the paper is published, or in a single area within a 200-mile radius.
“Local journalism is a bedrock pillar of communities across the United States,” Kirkpatrick said. “Journalistic endeavors throughout the country are facing major economic struggles that put the future of many publications in serious jeopardy. These struggles existed before Covid, but the pandemic has only made them more severe. We need to make sure these publications can sustain themselves through this crisis and beyond.”
Newhouse cited the negative impact that digital has had on newspaper revenues. He emphasized the need to sustain local journalism in rural communities like the one he represents in Central Washington.
“Due to transforming business models and changes to advertising mediums, many of our locally owned newspapers have been struggling to make ends meet, and the pandemic has only exacerbated their situation,” Newhouse said in the release. “By providing tax credits for readers and local businesses, we can begin to help our newspapers remain resilient.”
Feeding the Local Media Ecosystem
The bill—which, having just been introduced, will change over time—aims to support the media ecosystem in three ways.
- It would support the nation’s media literacy by making it easier for Americans to read the news. People who subscribe to local newspapers would get a tax credit up to $250.
- It would help stop the endless drain of media layoffs. Local news outlets would get refundable tax credits of up to $25,000 for the first year, per journalist. Eligible publishers would receive tax refunds if their tax credits are more than the payroll tax they owe.
- It would help advertisers. Businesses with fewer than 1,000 employees would receive tax credits of up to $5,000 the first year, and up to $2,500 for each of the next four years, for advertising in local newspapers or on local TV or radio stations.
Say you’re a restaurateur who owes $3,500 in taxes but you spent $5,000 to advertise your grand re-opening, complete with information on safety protocols and a two-for-one dine-in promotion. Your tax bill would be brought to zero because the credit is non-refundable.
The American Journalism Project has amassed a broad coalition of publishers and large trade groups in support of the legislation. Some 5,000 news organizations and advocacy groups are represented in AJP’s open letter to Congress urging the bill’s passage.
“We have come together because local news in America is collapsing,” the letter states. “This collapse of local news would be terrible under the best of times; right now it also means that communities cannot combat Covid-19. The problems are especially acute in rural areas and communities of color. Trustworthy and fact-based information— accurate journalism—saves lives.”
The Demise of Local Journalism?
“In only two decades, successive technological and economic assaults have destroyed the for-profit business model that sustained local journalism in this country for two centuries,” writes Penny Muse Abernathy, Knight Chair in Journalism and Digital Media Economics at the University of North Carolina’s Hussman School of Journalism and Media, in her report The Expanding News Desert. Of the roughly 9,000 newspapers that existed in 2004, nearly 2,100 have gone out of business.
During that time, Facebook and Google have swallowed up much of the newspaper industry’s ad revenues. Last year, Facebook ad revenues totaled nearly $71 billion, whereas the news industry pulled in $14.3 billion in ad revenue.
“The economic fallout from the coronavirus has turbo-charged the decline, with at least 30 newspapers closed or merged in April and May 2020, dozens of newspapers switching to online-only delivery of news, and thousands of journalists at legacy and digital news operations being furloughed or laid off,” Abernathy writes. “All of this raises fears of an ‘extinction-level event’ that leads to the collapse of the country’s local news ecosystem.”
Dean Ridings, CEO of America’s Newspapers, says it is refreshing, but not surprising, to see bipartisan support for the news.
“Representatives in Congress typically have a relationship with their hometown papers, which cover their events and issues…There is no other organization serving that important purpose,” he says. “They understand the need to support local journalism at a time when it is incredibly challenged. That goes across party boundaries, fortunately.”
Ridings says his members, many of whom are family-owned newspapers, are contacting their local representatives to voice support for the bill. As head of a trade group, he is facilitating the spread of ideas through digital content: an op-ed and an editorial cartoon by Philadelphia Inquirer writer and cartoonist Rob Tornoe.
“I don’t want to be so selfish to think we’re the only challenged industry since the pandemic,” Ridings says, “but it was already facing the typical forces of disruption in the process of transitioning from a print ad model to a digital ad and subscription model.”
Paul Boyle, SVP of public policy at News Media Alliance, is actively lobbying Congress in support of the bill.
The advertising piece of the act, he says, could be viewed as “Covid-19 related” and thus be included in a second coronavirus relief bill that would follow the CARES Act passed in March.
“The calendar is running but the tax credit could potentially be added to legislation after the election,” he says. “The local retailer, the bar owner, the restaurant owner—whatever the local business is on Main Street could benefit. At the same time, you’re benefiting a daily newspaper, a radio station, a nonprofit news organization that’s digital only.”
Like Ridings, Boyle is not surprised by the bipartisan support for the bill.
Members of Congress rely on local media to explain their positions and provide context for events in the nation’s capital.
“We get caught up on the coasts and inside the beltway trying to lump the media together and putting politicians’ views in the same basket,” he says. But members of both the House and Senate recognize “the value of trying to get information out to their constituents.”
The American Advertising Federation stands behind the bill, although it is not actively lobbying for it.
“The advertising industry (and the AAF) recognize the importance of healthy local media, not only for journalism, but as a conduit for local businesses to communicate efficiently and effectively with consumers,” AAF CEO Steve Pacheco says.
Just last month, the AAF and other groups, including the Association of National Advertisers, joined forces with publishers to fight a 3% tax on advertising that had been proposed by the D.C. Council, says Clark Rector, the AAF’s head of government affairs. Democratic Chairman Phil Mendelson proposed the tax on July 6, and then abandoned the idea a couple weeks later after opponents argued that a tax would hurt both advertisers and news organizations.
“As an industry, we’ve never asked for any favors like [a tax credit],” Rector says. “Even if this bill had nothing to do with advertising, we’d support the legislation because it supports local media.”
Preserve and Sustain
The president of the AAF South Florida and Palm Beaches chapter is voicing his group’s support. Businesses in the area advertise in newspapers such as the South Florida Sun-Sentinel, which won the 2019 Pulitzer for Public Service for coverage of the Parkland shooting.
The area’s Congressman, Rep. Ted Deutch, a Democrat, has not sponsored the bill. His press secretary did not reply to an email requesting comment.
“Our local AAF chapter is in full support of this bill. We’re huge believers in the power and necessity of local news organizations. They are the foundation for connected, vibrant communities,” says Jacob Edenfield, associate creative director at Fort Lauderdale-based ad agency Starmark. “This bill helps preserve and sustain critical local reporting, and it helps other small businesses advertise to aid their recoveries from the economic downturn.
“Here in South Florida, that’s a major win-win.”