Gongol.com Archives: November 2021

Brian Gongol

November 29, 2021

Business and Finance It takes more than a tax credit

In passing the Build Back Better Act, the United States House of Representatives has made an unusual turn: It is offering a "payroll credit for [the] compensation of local news journalists". The proposal still requires Senate approval and a Presidential signature before it can become law, but the provision is worthy of attention. ■ There's really no escaping some hard truths about the state of local news outlets. For instance, the National Association of Broadcasters said in a comment to the FCC that "Local radio stations' OTA [over-the-air] ad revenues fell 44.9 percent in nominal terms ($17.6 billion to $9.7 billion) from 2005-2020". And the estimated total newspaper circulation in the country is well below half of what it was in 1990. Everyone is aware that alternatives like social media and streaming platforms are tough competitors for mass media to face. The story is even worse for ad revenues than for circulation, if that can be believed. ■ If the Build Back Better plan were to become law, it would deliver a subsidy of almost $1.7 billion to those local news outlets over the course of ten years. While not a "Brewster's Millions" type of windfall, it certainly would be met with approval among some media owners, both large and small. ■ In the long term, though, neither a few years' worth of subsidies -- nor any other intervention the government could likely imagine -- is going to be sufficient to change the grander dynamics of news. Some outlets (like terrestrial radio and television broadcasters) have always subsisted on advertising revenues rather than subscriptions, and their emergence had an effect on traditional publishing. Digital publishing has an effect on everything that came before it, as well. ■ There are still bitter fights ahead over ownership of legacy media companies, including the immediate contest over Alden's attempt to take over Lee Enterprises. And those have the potential to vastly out-scale anything that happens around marginal tax bills. But in the end, American citizens will get the kind of news coverage we choose to value. ■ Whether that takes on the form of conventional media under benevolent ownership (that is, rich owners who don't insist on turning a significant profit), startup outlets that seek to crowd-fund or otherwise support local journalistic coverage, or even local news cooperatives (the reporting equivalent of credit unions or mutual insurance companies), imaginative new forms have the potential to steer into the future. But it's also entirely possible that if interested citizens don't see the value and pay up, the only local media left standing will be increasingly partisan outlets that serve mainly to pick fights rather than to document reality. Which chosen path lies ahead remains to be seen.

Comments Subscribe Podcasts Twitter