Local newspapers want the government to fund them. That's a horrible idea.
Government funding of news orgs would undermine our vital fourth estate
There’s been a lot of talk recently about getting the government into the business of funding U.S. newspapers. Look no further than a recent column by Seattle Times Publisher Frank Blethen in Editor & Publisher magazine called, “A 10-point plan for the government to shore up local newspapers.”
First, Blethen paints the issue as a crisis that will spiral out of control without intervention by the federal government: “The current pace of two newspapers failing per week, on average, will increase without federal intervention, swift leadership and new ideas,” he writes.
Then, he maps out his ten-point plan for the government saving local newspapers — a map that is rife with protectionism, cronyism, and a funding model that would neuter news organizations’ ability to critically report on the government.
A few highlights: He wants Congress to pass the Journalism Competition and Preservation Act, a bill designed to extract money from “Big Tech” that is little more than a protectionist racket. He calls for a “permanent headcount subsidy” within five years (i.e., government funding of newsrooms). He wants to create “a fund for impoverished urban neighborhoods to receive paid news subscriptions and adequate broadband internet service,” and also create a fund for local news startups (i.e., more government funding of local news). And he wants to “protect local newspaper stewardships from outside financial investors.”
There are a few points in his plan I actually agree with or, at least, think are minimally bad. For example, his advocacy of the Local Journalism Sustainability Act, which would provide tax credits based on how many journalists are employed at a news outlet, sounds reasonable. I always like businesses being allowed to keep more of their own money. Similarly, his call to exempt family newspaper stewardship assets from the federal death tax is also reasonable. As he puts it, “Family-owned newspapers are capital-intensive businesses that can be forced to sell out due to this unnecessary tax burden.”
But that’s where the good ideas end.
Neutering the Fourth Estate
It can be tempting to reach out to the generous hand of the government to fund local newsrooms. The news industry is a hard business, and the internet has decimated traditional business models (although, contrary to popular belief, Craigslist had more to do with the demise of newspapers than social media).
But one of the primary functions of newspapers is to keep government accountable — that’s why it’s often referred to as the “fourth estate,” serving as a check on the executive, legislative and judicial branches of government. And if governments — federal, state or local — come to account for a large chunk of newspapers’ funding, they’ll likely be more hesitant to bite the hand that feeds them. Journalists like to think of their profession as a lofty one that’s above the fray of politics. But at the end of the day, everyone has to eat, and if they think their paycheck is on the line, journalists will do anything to keep the money flowing, no matter how they may try to rationalize it.
The COVID-19 pandemic has highlighted how government, which portrays itself as a combater of misinformation, is often a conveyer of it. Publicly funding news organizations is a surefire way to exacerbate that problem and render government agencies even more unaccountable than they already are.
One high-profile example is the recent report by the Wall Street Journal that the Department of Energy determined the COVID-19 virus likely originated from a lab leak rather than via zoonotic origins. The determination was made with “low confidence” (as critics of the lab leak theory are eager to point out), but that’s beside the point. It doesn’t matter if the virus leaked from a lab or was transmitted in a wet market; we’ll likely never know the virus’s origins for certain. Indeed, a recent story in the Atlantic makes the claim that the case for a zoonotic origin is stronger than ever.
But what actually matters is that, especially early in the pandemic, the lab leak theory was always plausible and, if not a likely explanation, was at least a possible one that deserved further scrutiny. But the government appeared to deflect scrutiny by labeling the lab leak hypothesis a “conspiracy theory,” likely because it was funding exactly the kind of research that may have caused the pandemic. People suffered real consequences as a result of this government misinformation campaign; Facebook, for example, censored posts merely discussing the hypothesis from its platform, likely at the behest of the federal government.
In spite of that smear campaign, outlets like the Wall Street Journal, among others, have now reported on the plausibility of the lab leak hypothesis against the wishes of the government. If the Wall Street Journal received a healthy portion of its funding from the federal government, would it have thought twice? It’s not difficult to imagine a scenario where the government pulls a grant from the WSJ — or declines to fund a future grant — because it viewed the paper’s lab leak report as “disseminating misinformation.”
So what’s the solution to failing newspapers?
One can’t fault journalists for wanting to save the industry they’ve devoted their lives to. But publicly funding news outlets isn’t the way to go. So what is?
The advertising model is one that’s been around for a long time, and although it’s not nearly as lucrative for news orgs as it has been in the past, it’s a vastly preferable source of revenue than government funding.
One could argue that the advertising model suffers from the same flaw as the public funding model: Conflicts of interest. How can a newspaper or magazine report on a corporation if it’s the publication’s biggest advertiser, for example?
That certainly is a problem. Despite the long running “wall” separating advertising and editorial departments at newspapers, the reality is that business decisions increasingly play an important role in editorial decisions; it’s simply a matter of survival in an increasingly fraught industry.
But advertising is still superior to public funding. For one thing, it’s a far more decentralized model. If we moved toward public funding, most outlets would probably accept some form of government funding, meaning they would all be captured by the same centralized authority. But it’s unlikely that any one corporation would (or could) advertise in every outlet that might report on it. Plus, it’s a lot easier for an outlet to dump an advertiser than it is to dump the government. An advertiser that pulls out due to negative news coverage can be replaced by another advertiser (or several advertisers) or be offset by an increase in paid subscribers. If the government denies funding to an outlet that has grown dependent on government funding, it may suffer a fatal blow, leaving only obedient lapdogs behind.
Speaking of subscribers, they are becoming an increasingly important source of revenue for news outlets. It used to be that the bulk of newspapers’ funding came from advertising, with subscription fees providing a small supplement to the glut of advertising revenue. In the internet age, the model has largely reversed. Look at the New York Times, which has seen subscription revenue make up for sluggish ad growth.
And that brings us to Substack, the platform on which you are reading this very article. The rise of Substack has been something of a mini-revolution in the news industry, demonstrating that people are more than happy to shell out cash to support journalists directly.
There are pros and cons to this approach. On the plus side, supporting individual journalists has resulted in a somewhat more decentralized media landscape, a continuation of the trends we’ve seen with the rise of blogs and YouTubers. On the other hand, many of the biggest Substackers offer opinion or analysis rather than original reporting. There’s value to that, of course, but it’s not exactly a substitute for the boots-on-the-ground reporting that most journalists are rightly concerned is disappearing.
But Substack increasingly does support original reporting. One of the largest Substack newsletters is Bari Weiss’s The Free Press. Once Weiss’s personal newsletter (then named Common Sense), the publication has evolved into a bona fide news platform that seems keen to rival newspapers like the New York Times (Weiss’s former employer) or the Washington Post.
Substack has shown interest in fostering local news outlets as well. In April 2021, Substack announced the launch of Substack Local, “a US$1,000,000 initiative to foster and develop the local news ecosystem by helping independent writers build local news publications based on the subscription model.” That’s a significant investment by a private company on an initiative that empowers local reporters to develop sustainable subscription-based revenue models to fund their reporting enterprises.
Yes, it’s a drop in the bucket compared to the firehose of cash the federal government could deluge the industry with. But at what cost? Government funding comes with strings, whether stated outright or merely implied, and when the news media is such an important check on government power, every little chip at its integrity has the potential to add up to disastrous effect.
I understand why government funding is attractive to local newspapers. But trust me when I say they can’t afford the cost — and neither can we, the public.