To save local news, America needs stronger regulation of media consolidation, and incentives both for the breakup of existing media chains and the purchase of news organizations by civic-minded, local owners, including non-profits, public benefit corporations, co-ops and employee-ownership models.
The NewsGuild supports the following policy solutions to incentivize ownership of news organizations by local, civic-minded stakeholders:
- Tax credits and other incentives for existing owners to sell or donate their properties to local organizations, including non-profits, public benefit corporations, employee co-ops, foundations, universities and private investors who intend to support the public-service mission of journalism.
- Funding and financing options that would support the conversion of for-profit news outlets to non-profit status, including funding and financing for the purchase of existing news organizations from struggling local owners or corporations whose cost-cutting has diminished the amount and quality of local news coverage.
- Enforcement of anti-trust laws to break up large news organizations that have outsize influence over news coverage regionally or nationally, and moratorium on media company mergers that will damage news coverage, including the purchase of news organizations in bankruptcy proceedings.
- Increased disclosure of investors in hedge funds and financial institutions, to reveal foreign ownership interests in local news outlets. The Guild endorses the Stop Wall Street Looting Act, and also special provisions targeted to news organization ownership.
The news industry faces significant headwinds from the dramatic shift in advertising revenue, and the habits of digital readers. But another factor is at least as culpable in the rapid demise of newspapers and newspaper jobs: ownership by investors who simply do not care about the public service mission of news organizations.
As the revenues for the news industry entered a rapid decline in recent years, financial investors swooped in to take advantage of cash flows that could be diverted into corporate profits, and “efficiencies” that could come from consolidation. Newspaper chains have long existed, but the wave of consolidation that occurred in the years following the Great Recession has concentrated ownership of news organizations in unprecedented fashion. Today, the newspapers read by more than half of all Americans are owned or controlled by hedge fund investors, and one out of four newspapers nationwide— and half of U.S. daily papers— belong to one of five major chains.