Why Obama should stiff-arm "save the newspapers" legislation.

Media criticism.
Sept. 21 2009 6:39 PM

Saving Newspapers From Their Saviors

President Obama! Stiff-arm that "save the newspapers" legislation!

Illustration by Mark Alan Stamaty.

When President Barack Obama told the Toledo Blade last week that he hoped that the faltering newspaper industry would recover because "fact-based" and "investigative reporting" are "absolutely critical to the health of our democracy," even some of the cynical bastards who staff the nation's dailies swooned.

Of course, the president didn't pay anything more than lip service to the newspapers. He remained, in the Blade's words, "noncommittal" about the bills, including one by Sen. Benjamin L. Cardin, D-Md., introduced early this year that would allow newspapers to reorganize themselves as nonprofits. "I haven't seen detailed proposals yet, but I'll be happy to look at them," Obama said.

Here's hoping that the White House's detailed-proposals czar keeps the Cardin bill out of Obama's hands. The last thing newspapers need is the sort of help from the government that turns them into NPR, endlessly begging for contributions, pursuing wealthy philanthropists, and standing in line for government handouts.

Indeed, the informed response to Cardin's proposal last spring, when he announced his bill, was devastating. Among my favorite pieces was the gentle criticism of Donald Kimelman in the Boston Globe. Kimelman, who may have learned a thing or two about charities as managing director of information initiatives at the Pew Charitable Trusts, writes that the "hybrid approach" contained in Cardin's bill would allow newspapers to do everything they currently do—or may do—"to earn revenue. But it would also allow [them], after converting to nonprofit status, to accept tax-deductible contributions as well." He continues:

Why should the tax laws give an advantage to newspapers over other kinds of media? How will the recipients of philanthropic dollars avoid having their news agendas distorted by donor preferences? Would the crutch of donor support hinder the search for new commercial revenue necessary for news organizations' long-term viability?

"Newsosaur" blogger Alan D. Mutter hammered the Cardin bill, pointing out that the nonprofit-ness of the Christian Science Monitor hadn't saved its daily newsprint edition and that the St. Petersburg Times, which is owned by a nonprofit, was selling its Congressional Quarterly division to remain viable. "Non-profit ownership will not save a newspaper—or any other business—if it is consistently losing heavy amounts of money," he wrote. Cardin, Mutter added, "might as well try to repeal the laws of economics or gravity. ..."

Tim Windsor of the Nieman Journalism Lab called the Cardin bill an example of "killing innovation with kindness," writing, "I am immediately suspicious of any effort that has as its starting point that newspapers are precious things to be preserved, forever, like some kind of ubiquitous, everlasting Williamsburg of media." Steve Yelvington pointed out in his blog that the Cardin measure "effectively puts the government in the position of licensing" newspapers. Rick Edmonds of the Poynter Institute, not completely unsympathetic to "exploring lots of options" for newspapers, rounded up some of these and other arguments against the nonprofit legislation.

As best as I can tell, there is little momentum gathering behind the Cardin bill. But that doesn't mean government should do nothing. To begin with, it might want to acknowledge that a previous round of government intervention damaged the newspaper business in the cities where the feds approved joint operating agreements (San Francisco, Seattle, Denver, Detroit, et al.) for competing dailies. In the name of preserving jobs and editorial diversity, the JOAs, as they're called, allowed competing newspapers to merge the business sides of their enterprises—splitting profits—while keeping the editorial sides separate.

In the short term, JOAs were great. Every metropolis wishes it had at least two dailies. But in the long run, the JOAs generally allowed the weaker of the two newspapers to drag the stronger one down until the weaker one was finally put out of its misery. Dominant dailies in JOAs tend to lose their competitive edge in the meantime, and when the JOA is finally dissolved, it leaves a city with one weak newspaper where there was once a strong paper and a weak one.

Congress also undermines newspapers by subsidizing the U.S. Postal Service, which delivers third-class "junk mail"—catalogs and other advertisements—in competition with newspapers. Now, newspapers have no moral right to deliver every advertisement printed on paper. But it makes little sense to subsidize a quasi-government agency like the Postal Service and then propose new plans to subsidize one of its failing competitors in the private sector.

(It should go without saying that I oppose second-class mail postal subsidies for newspaper and magazine delivery as well as the various state, local, and federal laws that require government to buy space to print legal notices in newspapers.)

The government's attempt to prop up newspapers with rewrites of the tax code or Sarkozy-esque direct subsidies of government advertising and free subscriptions for young people interferes with the already-in-progress transition from print to digital news delivery that's been accelerating for the past 15 years—or longer. Propping up troubled papers has a cost. It weakens the enterprises that are rising from below to compete with them to deliver advertising and, yes, deliver news. I can think of no better way to hinder the rise of such Web sensations as Politico and Talking Points Memo than rewriting the rules to benefit newspapers.

Remember, the decline of newspapers is multifactorial, and it didn't start yesterday. As early as 1992, Warren Buffett was counseling investors against newspapers, saying they had already lost their economic advantage. This was a full three or four years before the commercial World Wide Web took off.

Even if the government were to create as level and competitive a playing field as possible—say, impose the same sales tax burden on Web retailers as bricks-and-mortar shops that are much more likely to advertise in newspapers—I doubt that the dying newspaper trend could be fully reversed. The best thing President Obama can do for the news business is nothing.

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Somewhere in the last week, I read somebody commenting about how the rise of nonprofit journalism is going to change journalists from pitch writers into grant writers. Great line. Who wrote it? Stand up and take your bow by sending e-mail to slate.pressbox@gmail.com. The author's identity will be announced on my Twitter feed. (E-mail may be quoted by name in "The Fray," Slate's readers' forum; in a future article; or elsewhere unless the writer stipulates otherwise. Permanent disclosure: Slate is owned by the Washington Post Co.)

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Jack Shafer was Slate's editor at large. You can follow him on Twitter or email him at Shafer.Reuters@gmail.com.