A free press isn’t free, but whose money should it be?

Recently, President Obama entertained the idea of a newspaper industry “bailout.”

According to a Sept. 20 article from thehill.com, “Obama open to newspaper bailout,” Sen. Ben Cardin (D-MD) introduced S. 673, “The Newspaper Revitalization Act,” which would give tax incentives to papers if they were to restructure as non-profit organizations.

With the rise of Internet reporting, 24-hour news and ever-present pundits, traditional newspapers such as the Rocky Mountain Times and the Seattle Post-Intelligencer are falling by the wayside.
According to a March 2009 CNN article, “Newspapers fold as readers defect and economy sours,” 120 newspapers have shut down since January 2008 and more than 21,000 jobs at 67 newspapers have been lost in that time.

It’s obvious that newspapers could use the money. Because free press is known as the unofficial fourth branch of American government, its survival is imperative for educated and engaged citizens.

But any proposal aimed at a government rescue of the watchdog press is inherently flawed.

While S. 673 sounds good on paper, its results could limit the scope of content for a paper.

The newspaper act saw the light of day back on March 24, 2009, well before Obama’s off-hand remark. It would provide tax-exempt status for newspapers, but not without certain restrictions.

First, by using the non-profit status, newspapers would not be allowed to partake in direct political activities, such as endorsing candidates at the local, state, or national level, or even take positions on governmental proposals; therefore, eliminating the public forum, according to a commentary by media expert Robert G. Picard.

With steady federal funding, wouldn’t there be pressure to please the providers? The old axiom, “ Don’t bite the hands that feeds,” would inevitably ring true whether an official policy or unwritten understandings silently played out behind the scenes.

Picard explained that “The bill stipulates that the newspaper contains local, national, and international news stories. This section is somewhat problematic because non-dailies, particularly neighborhood and community papers, do not typically carry national and international news and nationally oriented dailies do not typically carry local news. The bill contains no provisions that require local creation of content, thus allowing publishers to fill a paper only with syndicated material or other content produced elsewhere.”

And if a local paper were to attempt to adhere to these stipulations, it would have to either subscribe to an expensive wire service such as the Associated Press (AP) or accept free national news from a benevolent provider—perhaps the federal government.

Similar to the government bailout of General Motors, there is a concern that newspapers would not be motivated to achieve fiscal solvency. Once the short-term problems are solved, and the government’s money is deeply invested, would these “free” presses actually press on to regain their financial freedom or would they be content to rest fat and happy and free from the fear of failure, thanks to government backing?

More importantly, the newspaper act provisions limiting newspapers to a 50/50 split of content and advertising would create a deeper deficit for newspapers, since their current business model tends to lean to 2/3 or 3/4 advertising on the printed page. Therefore, the amount of government money necessary to keep them afloat would actually be greater than what would one initially expect.

Realistically, any newspaper accepting these terms would be tethered to government funds for the foreseeable future.

And more so than HMOs complaining about a competition-crushing public health care option, in an already toxic market place, it would be even more improbable for a journalistically credible and fiscally viable private news source to rise and provide an alternative voice to the people.
If by saving the business behind the news we end up sacrificing the core principles behind the free press—fair, balanced reporting of the facts, checks on government policies and actions—then truly taxpayers’ money has been used against them in a quiet and insidious fashion.

The onus is on for-profit news providers to adapt to the changing free market and find profitability in both old and new media. They’ve been reporting on the necessities of capitalism—most notably, fiscal adaptation when faced with potential extinction.