September 19, 2019, 3:24

Can Democrats running for president save a journalism industry in crisis?

Can Democrats running for president save a journalism industry in crisis?

The journalism industry’s landscape looks bleak — and Democratic presidential candidates are talking about it.

President Donald Trump is calling the media the “enemy of the people.” Major media companies are consolidating, like the recently announced Gannett and GateHouse media merger, mass layoffs are on the horizon, and local newspapers are shuttering at a concerning speed. All the while, newsroom budgets are dwindling and the digital media industry faces financial pressures that have shaped newsroom priorities away from reporting.

Sen. Bernie Sanders (I-VT) released his response to these dire state in a new plan this week, which includes a series of regulations aimed at the top, and a campaign to organize workers. His plan calls for a moratorium on major media mergers, blames major tech companies for bilking newsrooms’ revenue, and promotes his push to unionize newsrooms across the country.

“Trump’s authoritarian bullying of the media is totally unacceptable and it must be denounced and rejected,” Sanders wrote in an op-ed with the Columbia Journal Review this week. “But let us be clear: that alone will not solve the journalism crisis. Moreover, a further expansion of oligarchic business models in the media industry could make matters worse.”

The “journalism crisis” Sanders is talking about is disproportionately impacting newspapers around the country. Major metropolitan papers and their smaller, local counterparts are on life support as the companies that own them have cut journalists, editors, and photographers from staff. Pew Research Center found about 28,000 journalists nationwide lost their jobs from 2008 to 2018. The implications: For the approximately 1,400 cities and towns that have lost their newspapers, there are no watchdogs to report on local governments. Without that accountability, one Notre Dame study even found local financial costs like municipal bonds have risen in those communities.

A competitive and rich media landscape is good for democracy at all levels of government, not just the federal government. But local media is dying. The question is: Could the next president save it?

Sanders spins his tumultuous relationship with the press into a plan

Sanders himself has a rocky relationship with the press. Last month Sanders quipped to supporters, “I wonder why the Washington Post — which is owned by Jeff Bezos, who owns Amazon — doesn’t write particularly good articles about me.” (Sanders has been critical of Amazon’s labor and wage policies.) He later walked back the comment, saying he “absolutely” does not believe Bezos is directly involved in coverage at the paper, after the Washington Post, an independent entity, called the comment a conspiracy theory.

But in a newsletter put out by the campaign, Sanders campaign adviser David Sirota wrote that “reporters don’t have to receive a call from Jeff Bezos to know that their paychecks are signed by a billionaire with a well-known personal and corporate agenda — and knowing that agenda exists can shape overall frameworks and angles of coverage.”

To some extent, this latest plan from the Sanders campaign clarifies its war with “corporate media,” framing it within the candidate’s broader worldview: one where the CEOs in Silicon Valley and hedge fund and vulture capitalists on Wall Street are chipping away at democracy. It expands some ideas already floated by presidential candidates like Sen. Elizabeth Warren (D-MA), Sen. Amy Klobuchar (D-MN), and entrepreneur Andrew Yang.

Chuck Plunkett, the former editorial page editor for the Denver Post and now the director of the University of Colorado News Corp, told Vox these ideas from presidential candidates can’t come a minute too soon — especially in the age of Trump.

“I hope it gets oxygen, I hope it becomes a platform,” Plunkett said. “That’s the kind of energy we need, the thinking we need. … What we sure don’t need is calling those people the enemy of the people.”

The Sanders plan to save journalism, explained

Sanders is identifying three problems in the journalism industry: The media industry is consolidating, big tech companies like Facebook and Google have too much control over the industry’s revenue, and journalists don’t have enough bargaining power.

Sanders’ plan is aimed at stopping major media consolidation

Sanders’s plan would order an “immediate moratorium on approving mergers of major media corporations,” “limit the number of stations that large broadcasting corporations can own in each market and nationwide,” and “require major media corporations to disclose whether or not their corporate transactions and merger proposals will involve significant journalism layoffs.”

Under the Trump administration, the Federal Communications Commission has moved mostly in the opposite direction, paving the way for more consolidation in the industry. In 2017, the FCC eliminated decades-old rules that restricted companies from owning a radio or TV station and a newspaper in the same market, and made it easier for companies to own multiple TV stations in one market.

Ajit Pai, Trump’s chair of the FCC, said the move was to “strengthen local voices,” but the changes were panned by Democrats on the board who said it would only enable major companies to nationalize local news coverage and limit the number of voices and jobs.

As Vox’s Dylan Matthews reported, this has been the strategy with groups like Sinclair, a conservative-leaning broadcast media company that has been acquiring new affiliates in more markets for decades. Matthews writes that Sinclair has been working around the FCC requirement to hitting the absolute maximum level of viewer reach that a broadcasting conglomerate of its kind is allowed to have under federal regulations; it owns 173 TV stations across the country. (You can see which affiliates Sinclair owns in your local market thanks to Vox’s Alvin Chang).

It’s worth noting a proposed merger between Sinclair and Tribune Media fell through last year because the FCC alleged the company misled the body on how the merger would stay within the bounds of a regulation that limits companies to reaching no more than 39 percent of all US households. But Sinclair still has an unprecedented amount of influence in the local TV market.

Sanders is saying his administration would reestablish and strengthen the enforcement around antitrust at the FCC. But according to Bill Grueskin, an expert on the journalism industry at Columbia University, this might be more effective with TV than with print.

“Local TV is still very profitable, especially if you have stations in swing states like Ohio or Florida,” he told Vox over email. “And the audience hasn’t shrunk a great deal. So to the extent that preventing mergers can help keep more independent voices in local TV — especially given the heavy-handed nature of Sinclair’s editorial management — that’s a good thing.”

This is especially important given the outsized influence local TV has compared to major network or cable television.

But print hasn’t weathered the digital transition as well as TV and there have been “rapid declines in print advertising, flat or modest improvements in digital ads that don’t come close to compensating for print losses, and for many newspapers, a pretty ineffective digital subscription model that has already captured many of the customers likely to pay for access to a site” that are still impacting local newsrooms, Greuskin said.

Sanders addresses big tech’s role in the journalism industry

Sanders is putting the blame on Google and Facebook, which have played a large role in disrupting the traditional advertising revenue model that news organizations rely on. Sanders says he would like to prevent companies like Google and Facebook “from using their enormous market power to cannibalize, bilk, and defund news organizations.”

In 2018, advertising revenue from all digital platforms — not just news outlets — rose by 23 percent making up nearly half of all advertising revenue in the US, Pew reported. But half of all digital revenue went to Facebook and Google. For news outlets, this growth hasn’t made up losses from traditional advertising markets.

The plan backs a bill originally written by Rep. David Cicilline (D-RI) and introduced by Sen. Amy Klobuchar (D-MN) in the Senate, which would temporarily exempt news organizations from competition laws and allow them to collectively bargain with these tech companies like Google and Facebook to get better prices.

Sanders said he would also consider “taxing targeted ads and using the revenue to fund nonprofit civic-minded media,” essentially pulling money from these tech giants and reallocating it toward local-news outlets. But there’s a big open question in this plan: Who would get that money?

“Shouting at [Facebook] and Google also doesn’t do much unless you’re willing to try to extract revenue from them — and then you have to figure out how to disburse that money and decide which news orgs should get it,” Greuskin said.

Sanders plan also incorporates his larger push for unions and employee ownership

Lastly, Sanders’s media plan emphasizes his ambitious push to double union membership in the country by the end of his first term. Sanders has already shown solidarity with unionizing newsrooms, like BuzzFeed’s and, full

Notably, he backs giving employees the opportunity to purchase media outlets through employee stock-ownership plans.

The theory behind an employee-owned newsroom is, as Sanders points out, that a lot of media companies make money. Gannett, for example, took in $751.4 million in operating revenue in the fourth quarter of 2018, with a small loss overall. Yet, instead of reinvesting money into the journalism or staff resources, newspapers are still cost-cutting by making newsrooms leaner and leaner. In January 2019, Gannett had major nationwide layoffs. That could change if employees owned the company.

Then there’s a more cynical view: that advertising revenue is actually going down, and circulation revenue is going down.

Employee-owned models have been tried in newsrooms like the Milwaukee Journal Sentinel and the Chicago Tribune with varying degrees of success. For example, as detailed by Sandra Borden, a Western Michigan University communications professor, in her book Journalism as Practice, papers like the Journal Sentinel and the Omaha World-Herald were able to “maintain higher levels of staffing, coverage, and penetration” than peer newsrooms with employer-owned structures.

But eventually financial troubles, management issues, and a lack of resources roiled those attempts as well as others. “Such arrangements are difficult to construct because they require complex bylaws and financing to ensure that employees can afford to buy stock and they will not sell to outsiders,” Borden writes.

Poor management in the Chicago Tribune’s case shut the employee-owned stock system down. And the Milwaukee Journal Sentinel is currently owned by Gannett.

Elizabeth Warren has also proposed targeting private investment firms

While Bernie Sanders wants to regulate media mergers, Elizabeth Warren aims to regulate the private equity firms that have made a business of buying, gutting, and selling newspapers.

Warren’s idea is fairly straightforward, and a smaller piece of a larger “economic patriotism” plan. Specifically, Warren wants to regulate private equity firms and investment companies that make money by buying companies including local newspapers, cutting costs by shedding staff and resources, and selling the shell of that company for a profit.

As Vox’s Emily Stewart explained, “The bill would overhaul the way private equity is governed and require the industry to change some of its most lucrative business practices. It would also offer more protections for workers when their private equity-owned employers go south. … It would mean that to make a lot of money, they’d have to make really good bets.”

In other words, one of the biggest parts of Warren’s private equity idea is making it much for difficult for these investment firms to make money if the businesses they buy fail. If her plan was implemented, these groups in theory would need to make sure they were leaving behind a healthy, sustainable local newspaper or media company, rather than an empty newsroom.

“Private equity is also wiping out local and regional newspapers with the same playbook: buying papers for cheap, slashing the staff to cut costs, and bleeding the company with fees and dividends,” Warren wrote in a Medium post. “When the papers fail, members of the press lose their jobs and communities lose valuable sources of local news coverage.”

One of the prime examples Warren cited is the Denver Post, the major metro paper serving the Denver area that went from a staff of more than 280 in 2003 to around 60 currently. The Post is owned by Alden Global Capital, a New York-based hedge fund that owns newspapers around the country.

As the Denver Post’s editorial board wrote in 2018, Alden raised subscription rates while it ordered round after round of cuts from the newsroom, even as the paper demonstrated it was profitable and award-winning.

“You had another year where you’d hit ambitious targets, we embraced video, we made all those changes, and another 20 [people] would get cut,” Plunkett told Vox. “It just seemed arbitrary, it seemed like they had a number in their head. What their endgame ultimately is … is acquiring massive numbers of newspapers and bleeding them dry.”

Other 2020 candidates are thinking about how to save local news

Other presidential candidates including Amy Klobuchar and Andrew Yang are also thinking about ways to save local journalism.

Klobuchar and Sen. John Kennedy (R-LA) introduced the Journalism Competition and Preservation Act in the Senate (the bill was originally drafted by Rep. David Cicilline in the House). The bill would allow media companies, including newspapers, to negotiate directly with big tech companies like Facebook and Google “to improve the access to and the quality of news online.”

The main goal of the bill is to suspend federal and state antitrust laws for 48 months to allow media companies to collectively bargain with these tech companies (current laws make it hard for them to do so). But beyond opening up a path for negotiations, it doesn’t spell out exactly what would happen beyond that.

And Andrew Yang, the entrepreneur primarily running on a universal basic income, has proposed a plan to have the federal government subsidize journalism — specifically, placing government-funded journalists in less-covered states and regions, and creating a fund to put more resources toward local news. This is similar to how the British Broadcasting Corporation (BBC) funds 144 “local democracy reporters” to news organizations in England, Scotland, and Wales. The BBC is in part funded by a household fee set by the British government.

No matter what, Plunkett is heartened these conversations are happening on the presidential campaign level.

“I think it’s a healthy discussion to have right now,” Plunkett said. “Journalism isn’t broken, it’s the funding. Conversations that seek to empower that is helpful and useful and exciting.”

Sourse: vox.com

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