Senator's Solution To Dying Newspapers: Become A Non-Profit

from the lifeline-or-anchor? dept

Wed, Mar 25th 2009 3:13am — Michael Costanza

With many newspapers struggling to stay in business, a lot of ideas have been tossed around about how to keep existing papers alive. One idea, which has reached the US Senate in the form of a bill introduced by Senator Benjamin Cardin, is to allow newspapers to operate as non-profits, which would exempt them from taxes on subscription and advertising revenue, while also allowing them to raise funds via donations, similar to how public broadcasting companies operate. This approach would seem to have many potential issues. First of all, to qualify for the program, a paper would no longer be allowed publish editorial endorsements. This could have the twin effect of chilling editorial commentary in support of or against various candidates' positions, and driving more bias into the reporting. It would also put the government in charge of what could or could not show up in a paper's editorial pages. Second, to be successful, the papers would be heavily dependent on donations, which could raise questions about objectivity. But the biggest problem with this approach is that it simply props up a failing business model, rather than forcing the newspapers to adjust to the new realities of the marketplace. In the senators own words:

"We are losing our newspaper industry," Cardin said. "The economy has caused an immediate problem, but the business model for newspapers, based on circulation and advertising revenue, is broken, and that is a real tragedy for communities across the nation and for our democracy.

Whether the loss of newspapers (as opposed to journalism) is a tragedy "for our democracy" is certainly debatable. But the senator is right about the business model being broken. And if that's the case, wouldn't it be wiser to experiment with new, better models, rather than put the old one on life support?

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Filed Under: benjamin cardin, newspapers, non-profits

21 Comments

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R. Miles, 25 Mar 2009 @ 4:03am

WTH? *confusion*
First of all, to qualify for the program, a paper would no longer be allowed publish editorial endorsements.
Wouldn't this instantly trash The Constitution's passage of "freedom of the press"?

Makes no sense when a senator then spews "and that is a real tragedy for communities across the nation and for our democracy."

Looks like we have either an ignorant senator or an ignorant system in place for "non-profit" organizations.

Someone please enlighten (educate) me as I feel I'm the only one seeing this hypocrisy.
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- some old guy, 25 Mar 2009 @ 4:32am
  
  Re: WTH? *confusion*
  non-profit status isn't what it used to be.
  
  Nowadays its just a tax shelter.
  
  (and for the record, NPR is a non-profit and does OUTSTANDING GOOD for our democracy, so its not like the two are mutually exclusive)
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Fungo Knubb, 25 Mar 2009 @ 4:35am

RE: WTH? *confusion*
Newspapers are already unintentionally "non-profit" which is what the problem is. But they're non-profit for all the right reasons .... They no longer report facts - They either omit pertinent facts that don't support their political viewpoint, or they publish something, that they make up, which supports their political agenda. In either case it's no longer news, but propaganda, and I don't waste my time paying for, or reading, propaganda. I haven't paid for a newspaper, or news magazine for the last ten years or so.

Even if the newspapers were free for the taking, I just wouldn't bother, mainly because I don't have any fish entrails to wrap, or bird cage bottoms to line. It would go straight to a land-fill, which is where it rightly belongs.
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- Gunnar, 25 Mar 2009 @ 6:57am
  
  Re: RE: WTH? *confusion*
  "First of all, to qualify for the program, a paper would no longer be allowed publish editorial endorsements. This could have the twin effect of chilling editorial commentary in support of or against various candidates' positions, and driving more bias into the reporting."
  
  It's just political endorsements, which papers only make a few times a year. It wouldn't mean papers can't editorialize, it just means they wouldn't be able to say "We endorse John Smith," but they'd still be able to write about why he's a better candidate.
  
  And I wouldn't say this would prop up a new model. It would force papers to adopt a pretty different model, one that includes a different revenue stream.
  
  As for bias, well, why would the paper be any more biased toward donation makers than they are towards advertisers. So whatever your opinion towards a paper's bias (and as someone who works at one, there isn't any in the day-to-day writing) it shouldn't change just because the money comes from a company's charity budget and not its advertising budget.
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Paul Berry, 25 Mar 2009 @ 4:38am

Objectivity
"Second, to be successful, the papers would be heavily dependent on donations, which could raise questions about objectivity."

So the current (failing) model of relying on masses of corporate advertising *doesn't* raise questions about objectivity?

Whether Global MegaCorp places ads or donates heavily it would still skew the editorial line somewhat. No change there then.
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Esteban El Guapo, 25 Mar 2009 @ 4:48am

The Fallacy of an Objective Press
The fallacy of an objective newspaper was promulgated in America during the newspaper wars of the 1800s. Every news source has an agenda. Objectivity must be pursued by the reader -- read The Guardian and then watch Fox News and split the difference.
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- Man from Atlanta, 25 Mar 2009 @ 6:24am
  
  Re: The Fallacy of an Objective Press
  Amen Esteban. As news consumers we can't leave our judgment at the door. Yellow journalism is in almost all cases redundant.
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REB, 25 Mar 2009 @ 4:50am

Aren't things bad enough? Do we really need to establish the old Soviet model for news (PravdaTass)? Please tell me that we aren't entering this nightmare world?
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WarOtter (profile), 25 Mar 2009 @ 5:04am

Well...
At least it's a new idea from the senate on how to change the newspaper industry, rather than how to restrict and devalue the online news market...
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Al-Anon, 25 Mar 2009 @ 5:59am

"Second, to be successful, the papers would be heavily dependent on donations, which could raise questions about objectivity."

Like they're "objective" now? So let me get this straight...certain churches risk losing non-profit status for expressing "political" opinion that doesn't jive with the Washington establishment's ideas of "correct thought", but we're going to give clearly biased newspapers that can't maintain their circulation, non-profit status?

Does this mean the newspapers would be subject to the McCain-Feingold Act in the same way the producers of the documentary on Hillary Clinton now are? Unlikely. This is just another way to get the taxpayers to bailout failing Liberal institutions - much in the same way new calls for the "fairness doctrine" will eventually be used to bailout failing left wing radio shows like Air America.

Still laughing...
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Tgeigs, 25 Mar 2009 @ 6:12am

Ha ha
"which could raise questions about objectivity"

I've never actually laughed at work. Thank you for that.
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Joyce C, 25 Mar 2009 @ 6:18am

Newspaper Dilemma
Senator Benjamin Cardin's idea is brilliant in its simplicity...for those who think of it as socialistic...are you so afraid of a free press unbound by big corporations? The press was not meant to be "objective" or "balanced". It has become homogenized. This would allow for any number of perspectives which is the blood of democracy...finally, an intelligent suggestion.
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Man from Atlanta, 25 Mar 2009 @ 6:33am

How is this idea "putting an old business model on life support?"
I kinda like this idea, but the truly interesting thing is not necessarily the profit/nonprofit status.

Seems to me that the content restrictions would force newspapers to begin to operate more like ISPs under the Communications Decency Act. One way to the newspapers' lawyers will use to avoid problems would be disclaiming authorship of editorial content and use content provided by public figures, freelancers and independent contractors--more or less providing a platform or forum for voices independent of the newspaper.

Looks to me like this could be the new, better business model you are advocating Michael. It certainly doesn't preclude any other innovatins like focusing on serving communities or communities of interest.
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Matt Bennett, 25 Mar 2009 @ 6:50am

I dunno, seems fine to me. I agree it would be a little sad that editorial pages would disappear. But overall, PBS works out just fine. Kinda liberally biased, but so are most major media organizations, and PBS is mostly pretty dry about it.
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Anonymous Coward, 25 Mar 2009 @ 8:30am

We really need to require our senators and congressman to have at least a very basic understanding of our Constitution before they can get elected. First amendment anyone??

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.
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Anonymous Coward, 25 Mar 2009 @ 8:56am

I hope someone will finally try to do something about the slumping telegraph industry. We are wasting time discussing this new fangled newspaper stuff. We need to save the heart of America.
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Michael Costanza (profile), 25 Mar 2009 @ 9:04am

Objectivity
I knew, as I wrote that sentence, that people would bring up the fact that newspapers aren't exactly objective now, and that the incentive to go easy on donors wouldn't be much different than it is with advertisers. The point is taken, though I do believe it can be a more significant issue, when the focus shifts from attracting the broadest audience (in order to woo advertisers) to attracting the largest donors. However, the bigger issue for objectivity has to do with the restriction on political endorsements. Sure, the intention may be to end the outright, "We support candidate X," endorsements around election time. But does anyone honestly believe that politicians, who find themselves or their positions portrayed in a bad light on some editorial page, will not seek to use the paper's non-profit status as a weapon? Arguments about the "spirit" vs. the "letter" of the law are sure to come up.

And as for the business model, yes, they would be dependent on a different revenue stream, but the point of this plan is to allow them to continue to operate in basically the same way, offering a product that fewer and fewer people want to read, rather than adapting to the changing marketplace. Exempting revenue from taxes is just a band-aid that does nothing to address the fundamental problem with the business.
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- bulljustin (profile), 25 Mar 2009 @ 10:19am
  
  Re: Objectivity
  Actually, I think this allows papers to explore different business models. Operating a nonprofit is different from running a business. I ran a museum for a year and a half and it was quite different from any other business. The non-profit foundation that owned the museum also operated two book presses. All of the foundations branches were scrutinized by the public and their large donors but the foundations endowment allowed them to run mostly autonomously. They were also a history-focused group and look at newspapers as first hand accounts of history in the making. With that mentality, potential non-profit newspapers can once again serve the greater good.
  
  Additionally, non-profit doesn't actually mean they can't make money. It simply means they are "owned" by the public and receive certain benefits for being a public good. Besides, do we really want to throw the baby out with the bathwater? Middle and lower newspaper management has almost always been at odds with upper management. Those who run the day to day operations of a paper have a better feel for what the public wants and needs, and many of them will have great ideas that the upper eschalon would have poopooed because of cost. A non-profit has the option of getting donations to fund new programs and ideas that may be extremely valuable but not profitable. Non-profit newspapers may be the only way to get good investigative journalism to the fore where it belongs.
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Liberty Dave, 25 Mar 2009 @ 9:11am

Stupid
All you have to do is read a few words from the headline of this article to know it's a dumb idea.

"Senator's Solution..."

What else would a politician say? Do you actually think they'd say "Deal with it, you have to learn to compete like everyone else out there. No hand outs for you or special privileges."? No way, this is the government, and all they know how to do is mess up the economy by making stupid, anti capitalist decisions.

The author of this article is right on the money when he warns that the newspapers would be much more susceptible to bias based on who's donating to them.
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Judsonian, 25 Mar 2009 @ 9:13am

Newspapers with always thrive
Newspapers are not in any serious trouble. A strong statement, yes. Newspapers are evolving. The good ones. In the news industry information was first relayed via notes scribbled on walls, then pamphlets, newsprint, radio, tv, and now the internet. In order to survive the companies that provide the news MUST adapt to the new medium presented. While no longer "paper", news will always have a market. Adapt people.
Having government controlled news is most assuredly NOT the solution. At that point it is no longer news but propaganda.
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Skip Coogan, 25 Mar 2009 @ 9:21am

On objectivity
"It would also put the government in charge of what could or could not show up in a paper's editorial pages. Second, to be successful, the papers would be heavily dependent on donations, which could raise questions about objectivity."

As it is now the papers are heavily dependent on advertising revenue, this raises more questions about the newspapers' objectivity and editorial freedom than if a non-partisan government agency (not unlike the BBC) was to fund the newspapers in a non-profit model. Standing aside and letting the markets decimate the newspaper industry is most certainly not in the nation's best interests.
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