The Pandemic Is Crushing The Journalism Industry. The Government Could Save It.

The scale of the crisis facing the journalism industry requires a radical and dramatic response: a massive public investment in local news.
Illustration: Isabella Carapella/HuffPost; Photos: Getty Images

Three years ago, Matt DeRienzo surveyed America’s journalism landscape and issued a dire warning that most reporters didn’t want or need to hear.

“The last recession was brutal for newspapers and local news,” wrote DeRienzo, who at the time was the director for a nonprofit organization that supported local online news outlets. “The next one could be an extinction-level event.”

The next one is here now, thanks to the economic crunch brought about by the novel coronavirus outbreak. The sudden shock has clobbered an industry that had already lost nearly 30,000 jobs ― roughly a quarter of its reporters ― over the last decade, as its advertising-based revenue model proved anachronistic in the age of the internet. City- and statewide lockdowns have further reduced revenues, even as readership soars, so each day now brings news of another round of layoffs, furloughs or pay cuts from somewhere in the beleaguered industry.

“It’s even worse than I thought it’d be,” DeRienzo said last week, “because no one predicted this.

The scale and speed of the economic crisis has inspired journalists to turn to an unlikely source for help: Congress. The News Media Alliance, one of the newspaper industry’s top trade groups, and the NewsGuild, journalism’s biggest labor union, have each called on Congress for emergency stimulus assistance to prevent layoffs and keep journalists working and news outlets in business amid the crisis. This week, a dozen U.S. senators said a future stimulus package should include support for local news outlets.

Talk of government assistance may seem like a third rail for an industry that prides itself on its independence, but even a one-time infusion of cash isn’t likely to alter the media’s long-term fortunes. This crisis, University of Pennsylvania media studies professor Victor Pickard argues, is an opportunity to overhaul the entire structure of the news industry, and it requires a much more dramatic response: a massive public investment that creates a permanent source of financial support and ensures the future of local news.

“There is no market option here. There’s no commercial solution,” said Pickard, the author of “Democracy Without Journalism?” The recently released book calls for wholesale reform of the media industry. “We’re going to need to think bigger and bolder for the long-term. The government will have to intervene, and I think we’ll need something much bigger than what’s being discussed thus far.”

The newsroom of the Cleveland Plain Dealer, which laid off all but 14 reporters in early April.
The newsroom of the Cleveland Plain Dealer, which laid off all but 14 reporters in early April.
Jeff Greenberg via Getty Images

Pickard has called for the creation of a public journalism trust fund, supported by tax revenue, that permanently bolsters the business and supports the most basic coverage.

The fund, in his eyes, would pay for the sort of local coverage ― of public affairs, politics, communities of color and the increasing swaths of the country that now have no local news ― that the market has proven it won’t.

Call it a public option for news ― and while it may sound radical, Pickard argues that neither the industry nor American democracy have much of a choice but to create it.

“It’s either that, or we’re just going to write off entire communities across the states as having absolutely no access to any news or information whatsoever,” Pickard said. “It’s a very stark choice we have to make as a society. And I think our democracy depends on it.”

‘As American As Apple Pie’

The idea of the sort of news industry bailout the News Alliance and NewsGuild have called for isn’t unprecedented. Last year, the Canadian government created a $600 million relief fund meant to revive the country’s struggling newspaper industry, and similar ideas have been proposed in various European countries.

The Canadian effort has come under intense criticism. Its biggest skeptics, many of whom are journalists, have blasted the plan as an affront to journalistic independence and a threat to the media’s integrity, especially at a time when trust is already falling.

“The perception of lack of independence is absolutely crippling,” said Jen Gerson, a Canadian freelance journalist who opposed the bailout plan. “In a time where we’re shoring up our credibility and making sure people have faith that they can trust the information coming from us, taking a media bailout is absolutely fatal to those efforts.”

Any bailout plan would likely run into even bigger problems in the U.S., where trust in the media is much lower, and where perceptions of bias are much stronger, in part because of the GOP’s multidecade effort to undermine the media. Direct government support would almost certainly be seen, by journalists and non-journalists alike, as an unseemly affair that critics of the media and government would weaponize as a waste of money and a conflict of interest.

“Over the last decade, more than 1,400 communities have lost access to local news, and America today is home to a growing number of so-called 'news deserts' where people cannot access reliable information.”

A public trust fund, though, would fall more in line with the government’s long history of investments into and subsidized support for local and national news — a commitment that goes beyond just the Public Broadcasting Service and National Public Radio. The U.S. Postal Service was founded primarily to help disseminate news and information to American citizens, and for most of its history, it has delivered newspapers and periodicals for free or at heavily subsidized rates. Television and radio news are transmitted via public airwaves licensed freely to private companies. The largest source of news and information today ― the internet ― was created, in part, by government researchers.

“Media subsidies,” Pickard argued, “are as American as apple pie.”

The idea behind the government’s long-standing support for news, as Ben Franklin and George Washington argued three centuries ago, is that the free flow of information is vital to any healthy democracy. Today, despite the rise of the internet and its democratization of information, the collapse of the news industry has once again thrust the United States into a news crisis that this outbreak has only exacerbated.

Over the last decade, more than 1,400 communities have lost access to local news, and America today is home to a growing number of so-called “news deserts” where people cannot access reliable information.

In 2003, there were more than 500 newspaper reporters covering statehouses; by 2014, the number had dwindled to fewer than 300, according to Pew. The study, the last of its scope, found that less than a third of newspapers and less than 15% of local TV stations had a full-time statehouse reporter. The industry decline has only worsened since, and the coverage of mayors, city councils, state and local budgets and agencies has further evaporated in the last six years.

States and localities without robust local news outlets become more corrupt and more likely to abuse public funding, studies have suggested, so the erosion of local journalism has ruined its ability to hold power to account, threatened its credibility and weakened democracy. More Americans now rely on social media than print newspapers for their news, which has no doubt weakened the quality of the information they’re getting while also making them more susceptible to blatant disinformation.

News outlets have traditionally relied on advertising revenue to fund their journalism, but that model has fallen apart over the last three decades, as both news and advertising have shifted to the internet. Digital advertising now outpaces TV and print spending, but the wealth isn’t well dispersed: Facebook and Google have become a duopoly that soaks up more than 60% of the $100 billion (and growing) spent on digital advertising each year.

That has further crippled news outlets, and the duopoly’s role in hastening the destruction of local news has caught the eye of regulators in Congress.

In 2019, Rhode Island Rep. David Cicilline (D) introduced legislation that would give local newspapers the ability to collectively negotiate advertising rates with the two companies, in an effort to improve their finances. The bill, which has bipartisan support, was always meant as “a temporary step meant to stop the bleeding” and “give us an opportunity to develop a more long-term, sustainable solution,” Cicilline said.

“We absolutely have to do more to create the ability of local news to survive, and I think you’re seeing the consequences of it in a global pandemic,” Cicilline said.

Fifty-seven percent of the nearly 2,500 counties that have reported a COVID-19 case do not have a daily newspaper, according to The Brookings Institution, which also said that 37% of those counties had lost their local newspaper between 2004 and 2019. That is making it harder for many rural and other vulnerable populations to access critical information: More than 500 news outlets that serve American Indian communities have disappeared in the last three decades, Brookings said.

Bigger plans could come out of an antitrust investigation into the tech giants that’s taking place in the House, Cicilline said, but he’s also wary of a total bailout.

“We cannot do anything that would in any way undermine the integrity and independence of the media, and I worry that if there is government assistance, in terms of money, you begin to blur those lines,” Cicilline said. “I can imagine you can try to construct something, but you’d have to be careful. … If there was a way to do it, I’d certainly be open to it.”

The British Broadcasting Corporation, or BBC, is funded by taxpayers in the United Kingdom. The United States spends considerably less on public media each year than many European democracies do.
The British Broadcasting Corporation, or BBC, is funded by taxpayers in the United Kingdom. The United States spends considerably less on public media each year than many European democracies do.
AFP Contributor via Getty Images

Some journalists worry too.

“In a perfect world, I would like to see that happen,” said John Stanton, who co-founded the Save Journalism Project after he was laid off from BuzzFeed in 2019. (Laura Bassett, who co-founded the Save Journalism Project with Stanton, is a former HuffPost reporter who was laid off the same year.)

“But we don’t live in that world,” Stanton said. “I find it difficult to imagine Congress passing any kind of legislation that actually gives money to the news industry that does not somehow come with a lot of weird, terrible strings [attached].”

The Save Journalism Project has urged Congress to break Facebook and Google’s death grip on ad revenue, and Stanton reiterated that it would “behoove” lawmakers to act on that front immediately in order to help local news outlets on the other side of this crisis. (Facebook has committed $100 million in assistance to local news outlets amid the crisis, with $25 million devoted to grants and the rest to advertising. “It’s a drop in the bucket,” Stanton said.)

Journalists and lawmakers are right to fear that public funding would lead to government interference in the news, and any bailout plan or public journalism fund would need robust safeguards to ensure aid isn’t politicized or controlled by political leaders.

But media publishers are already subject to forms of interference and control that they have little ability to counteract. The arbitrary and hardly altruistic whims of Facebook and Google’s algorithms have sent news outlets on a goose chase for years, giving them more say in how we produce, shape and package content than actual journalists have. Other funding models have similar pitfalls, be they the impulses of billionaire benefactors, influential advertisers, or the hand of the market, which isn’t invisible to anyone who’s spent time in a newsroom.

Overt government support, left unchecked, might compromise the industry, but a purely capitalistic approach has already rendered us incapable of producing the coverage necessary for even a basic level of public accountability.

Pickard’s vision is that the public journalism fund, armed with money generated through new taxes on Facebook and Google’s advertising revenues, would produce or heavily subsidize nuts-and-bolts coverage of state houses and city councils, public agencies and local lawmakers. It could operate like the taxpayer-funded Corporation for Public Broadcasting, overseen by independent actors and accountable to local communities and journalists themselves.

Public funding in order to subsidize vital coverage doesn’t have to turn news outlets into state-controlled operations. PBS and NPR, along with its local affiliates, are beacons of accountability journalism, and such funding is common in the Nordic countries ― Norway spends more than 100 times annually per citizen than the U.S. on public media ― that rank among the healthiest democracies on the planet.

Even direct subsidies to already-existing media outlets could increase accountability and trust if structured correctly, with the sort of oversight journalists and the public can demand of a government body but not of the market.

“That’s a challenge for the legislators,” said Rosental Alves, a journalism professor at the University of Texas and the creator of the Knight Center for Journalism in the Americas. “But you can create a line of subsidies where there are no strings attached in terms of how the media will behave vis-a-vis the government or political factions.”

Don’t Bail Out The Dinosaurs

The fatal flaw of the Canadian bailout plan isn’t the ethics or perception of it, but its design: The majority of its money, critics have warned, will likely flow to the country’s largest media outlets ― the very same companies that “we know are dying, and have not been able to convert their model into anything economically viable,” Gerson said. “The entire structure of the bailout was designed to benefit legacy media at the expense of startups and the types of innovative new organizations that could have benefited from it otherwise.”

The United States’ legacy giants may be even less worthy of public money.

Over the last two decades, large conglomerates have swallowed up the local news business whole, with little regard for the actual journalism that’s supposed to be the core function of the business. Gannett and GateHouse, two such giants, merged in 2019, and took control of one of every six newspapers in the United States. They pitched their partnership as a way to streamline overlapping costs and immediately said they’d be “targeting inefficiencies” ― the clearest signal that the private equity backers behind the deal were really in charge, and stood to benefit most from the suffering of the journalists they now employ.

Gannett's merger with GateHouse put one of every six U.S. newspapers under the control of a company that has repeatedly cut jobs nationwide amid financial struggles.
Gannett's merger with GateHouse put one of every six U.S. newspapers under the control of a company that has repeatedly cut jobs nationwide amid financial struggles.

Companies like Gannett-GateHouse and Alden Global Capital, a hedge fund that has scooped up newspapers in order to promptly destroy them, aren’t the future, and while thousands of quality journalists still work at their papers and need help, bailing out the investors looking to squeeze the last few pennies of profit out of a dying business model while laying off even more reporters won’t get us any closer to healthy journalism or a well-functioning society. (DeRienzo, who now works for the Local Media Association, a trade organization for local publications, believes one result of the current crisis will be a hastened move away from corporate consolidation, anyway.)

Although Pickard envisions a truly public version of local news, the government could also find ways to bolster outlets that are taking innovative approaches to the craft, and trying to fill in the gaps companies like Gannett have already created and that Facebook and Google continue to widen.

The consolidation of the last 20 years, along with improved quality of and access to the internet, has sparked incredible innovation, on the national, regional, local and hyperlocal levels.

Nonprofit journalism has been a particular success story, with outlets like ProPublica and the Texas Tribune serving as shining (and award-winning) examples. Philanthropic efforts like the American Journalism Project and Report for America have sought to build off those models in other locales.

A growing number of hyperlocal and regional outlets have popped up too. In Chicago, the nonprofit City Bureau has provided coverage of the South Side and a largely Black population that more established media outlets have long ignored. Lyndsey Gilpin, a North Carolina-based journalist, started Southerly Magazine three years ago as a newsletter. Today, it’s a promising startup that pays freelancers and partners with local news outlets to cover environmental issues across the South.

Inspired by projects like High Country News, which covers the mountain west, and Scalawag, another Southern-focused outlet, Gilpin has funded her project through grants and crowdfunded donations, and has done well enough that in February, she finally took a modest salary for the first time.

“I’ve been throwing more things at the wall and seeing what sticks,” Gilpin told HuffPost, offering a condensed version of what the entire media industry has been doing for a long time now.

The coronavirus crisis has proven that there is incredible demand for reliable and informative news, especially of the local variety. The number of people throwing things at the wall, and the amount that’s starting to stick, is enough to inspire at least some hope for the future, even if the immediate outlook is dire.

But we need even more of them, on an even bigger scale, if we don’t want the dark times to last too long, or for this to end with a news industry captured by cynical publishers using papers to launder their interests to the public.

A little help from the people journalists are already primed to hold to account wouldn’t hurt.

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