Newspapers Need Rethinking, Not a Bailout

Originally posted: July 11, 2009

DePauw University Prof. Jeff McCall

Greencastle, Ind. – Newspaper executives are wringing their hands about how to preserve an important and proud industry. Times are tough, indeed, for the newspaper business. Advertising sales are down an estimated 25 percent since 2006.

The Pew Research Center reports that about 5,000 newspaper jobs were lost in 2008 and estimates more than that have already been lost this year. Circulation continues to drop in most markets. Proposals have floated out from various quarters that the government should step in to play a role in bailing out the financially troubled news industry. The state of Washington has passed a 40 percent cut in business tax for its newspaper publishers. Proposals at the federal level include Sen. Benjamin Cardin’s Newspaper Revitalization Act, which would allow all advertising revenue to be tax exempt, essentially making newspapers nonprofit educational organizations. Sen. John Kerry has suggested federal tax breaks for newspapers to help them survive.

However well-intentioned, any government bailout of the journalism industry is a bad idea. Public confidence in the media is already on shaky ground. That will surely erode further if citizens are given reason to think the journalism industry might take it easy on the government in exchange for tax breaks, anti-trust exemptions or subsidies. The watchdog function of the press to keep an eye on government is a long-valued role for the media. That function is compromised as soon as the government gives the press any special financial consideration.

Government financial breaks for the media would be a clear case of the press getting special treatment because of its important role constitutionally. One of the beautiful things about the First Amendment, however, is that every citizen gets free press rights.

Should the government decide to subsidize journalism, would the financial help also go to bloggers, opinion magazines, talk radio hosts, special interest newsletters and documentary filmmakers? All of these serve free press functions as well.

From a practical standpoint, government financial subsidy of the newspaper industry wouldn’t necessarily help anything if the industry doesn’t address broader issues of citizen confidence. Research from Rasmussen Reports indicates only 58 percent of Americans believe it is important for a community to have a local paper. Other studies indicate a public sense that the press has not been fair in election coverage or in coverage of hot button topics such as global warming. Government subsidy wouldn’t help address public perception problems.

Newspaper executives are strategizing ways from online advertising and from charging a fee for online readership.

These are sensible steps to help preserve the industry, but just as much effort must go into legitimizing the function of newspapers in the eyes of the public. The newspaper industry can survive, but it will have to do it with a renewed sense of purpose and not with government intervention.

Jeffrey M. McCall, a professor of communication at DePauw University, is author of “Viewer Discretion Advised: Taking Control of Mass Media Influences.”

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