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A GateHouse Media owned Palm Beach Post and the Gannett Co. owned USA Today are seen for sale at a newsstand on August 05, 2019 in Palm Beach, Florida. GateHose Media announced an agreement to acquire Gannett Co. Inc, which would create the largest local news publishing organization in the U.S. (Photo: Joe Raedle/Getty Images)

Only Public Funding Can Save Local Journalism—and Thus Democracy

Under our plan—the foundation of the new Local Journalism Initiative—policymakers in Washington would provide a lump sum to every county in the nation annually based on the county’s population to pay for nonprofit journalism within that county.

Readers of the Columbia Journalism Review are well aware of the importance of local news media; they have been the foundation of the American free press, and political democracy, since 1776. Daily newspapers have traditionally constituted the heart and soul of local news media, and they have provided the lion’s share of original reporting upon which all other news media depend. That remains the case in the digital era as much of newspapering has transitioned online.

We need the funding to support independent, competitive, professional local news media. That money must come from the government.

CJR readers are also aware that local journalism as it has been known for 200 years has all but disappeared in most places in the United States over the past two decades. The business model for commercial journalism, based on advertising providing most of the income, is dead. Thanks to the internet, it will never return. All efforts to find a viable new business model for local journalism have failed, and investors have abandoned the field, except for private-equity funds on the lookout for distressed properties they can strip for parts.

The ramifications are increasingly clear, and endlessly depressing. It is not simply that functional self-government is impossible without credible journalism with all that forebodes; it is that local newspapers have provided the social glue that brought communities to life, as places where people see themselves as participating in a joint enterprise with people they know and understand and care about. That is disintegrating.

What remains less appreciated is that the founders of the United States regarded creating a free press a policy issue of the greatest possible importance. The Post Office was established in large part to distribute all newspapers virtually for free, and that is most of what it did the first century of this nation’s existence. Likewise, that has been the opinion of the Supreme Court in its major decisions. As Justice Potter Stewart put it, the free press clause of the First Amendment is “a structural provision of the constitution.” [his emphasis]

This is the public policy imperative facing the United States regarding journalism in 2021: We need the funding to support independent, competitive, professional local news media. That money must come from the government. It is the only viable option at a point when the market has shown that it cannot begin to sustain existing media, let alone usher in a renewal of bold speak-truth-to-power journalism. Of course, we cannot allow the government to pick and choose who gets the money, or engage in censorship. Any viable policy to support local journalism must allow the people to make of it what they will, and trust them in the process of self-government. It is time to stop pretending that can be done without public funding.

How best can the federal government intervene to produce these outcomes? The answer we provide herein is what we term the Local Journalism Initiative. Under our plan, policymakers in Washington would provide a lump sum to every county in the nation annually based on the county’s population to pay for nonprofit journalism within that county.

Once every three years, people over 18 will be given three “votes” on how the county’s funds should be distributed to three different LJI candidates based in their county. Why three votes for each person? A main objective of the LJI is to have multiple well-funded news media in every county, so people should get multiple votes. In lightly populated rural areas, several counties can be merged to generate a sufficient population base. Conversely in large metropolitan areas counties can be merged if the residents of the counties so desire. In the most populous counties people may get four or five or votes to guarantee diversity of voices.

How the money will be allocated will be determined by people in each county for qualified applicants. To be a qualified applicant for LJI funds, an enterprise must:

  • Be formally identified and understood as non-profit
  • Be functioning for six months prior to the election, so voters can see what the applicant actually does
  • Be based in the home county with 75 percent of its salaries going to employees based in the home county
  • Be completely independent; not a subsidiary of a larger nonprofit group
  • Produce and publish original material at least five days per week on its website

Those candidates getting the most votes get a higher percentage of their county’s LJI budget. No single applicant can get more than 25 percent of a county’s annual budget, regardless of its vote total. An applicant must get at least 1 percent of the vote to qualify, or 0.5 percent of the vote in counties with over 1 million people. Diversity and competition are crucial.

Everything produced by federal funds must be made available immediately to everyone online and for free. In short, the principle is that journalistic organizations will be paid in advance, and what they produce primarily with public monies will be instantly put in the public domain and made available to all for free. The best check on abuses will be popular voting to determine the recipients.

The process will be overseen by the U.S. Postal Service, with elections taking place online and with print ballots available at or through the Postal Service. This is a renewal of the Postal Service’s historic mission of sustaining independent and competitive journalism—a mission initiated by the founders of the American experiment and encouraged by their successors well into the 20th century.

There will be no content supervision by the government, no monitoring content to ascertain that it is “good journalism,” or even journalism at all. The stipulations above will go a long way toward eliminating fraud. And if people elect to have disingenuous local news media? Just like elections in general, that is the possibility in a democracy.

The ultimate goal of the LJI is not simply to equal the optimum performance of the U.S. press system through history but to surpass it. Even at its best, U.S. journalism has reflected the view of large property owners and the well-to-do, and left dispossessed communities underserved, especially communities of color. One almost certain positive development from the LJI will be that communities of color across the nation will be in a position to have local news media that actually cover the issues in their neighborhoods, towns and cities seriously and thoroughly, produced by journalists from those communities. The LJI makes real a fundamental civil right, one at the heart of the American experiment: the right to a free press that gives everyone the information they need to make real the promise of democracy.

The immediate beneficiaries of the LJI will be the numerous local nonprofit news media that have already been formed, often by working journalists, in communities around the nation over the past decade. The LJI will prove to be an oasis for them. It will also make it practical for local journalists to take over dying local news media and convert them to nonprofit status. This is already happening in communities across the country, but often with much difficulty. The LJI would provide encouragement and support for journalists and their communities.

In big cities where historic daily newspapers are struggling to survive, and in smaller towns where weekly papers are shadows of their former selves, LJI could help local journalists and editors buy, sustain and reinvent publications that have withered under chain ownership.

Maintaining an existing publication, which has name recognition and contacts in the community, gives journalists a jumpstart. But they won’t have so much of an advantage that other journalists cannot start competing publications. Indeed, we believe that, in short order, there will likely be a body of new non-profit news media engaged in generating local journalism and seeking LJI funds. This is the goal of the LJI.

The LJI is not hostile to the remaining for-profit local news media. We recognize how important it is to stop the bleeding in for-profit newsrooms, even as we build a necessary and more viable noncommercial system. To help make the transition, in its first six years (two terms) of existence, the LJI would allow local for-profit news media to compete for LJI funding in their county elections, providing they set up distinct nonprofit branches and use their LJI funding under the exact same terms as nonprofit LJI recipients. All remaining local for-profit newspapers and news sites are desperately searching for a workable business model, and if this grants them a lifeline to find a new way to operate in the black doing journalism, more power to them. And if profitability eludes them, they will be better positioned to transition to nonprofit status.

After the first six years, commercial news outlets—whether they are legacy media or startups—would close their nonprofit arms and become ineligible for LJI funding, unless they convert to full nonprofit status. This proposal has no interest in creating an army of investors and commercial lobbyists preying permanently on the government to bankroll their ventures.

At any rate, the right for anyone to launch their own news medium, commercial or otherwise, at any time will always be inviolate. Indeed, we can imagine how commercial news media could thrive alongside nonprofit journalism. Commercial firms, like anyone else, will always be able to publish anything produced by non-profit LJI recipients at no cost upon publication.

How much will it cost the taxpayers?

It is imperative that any system to solve the crisis must have a budget sufficient to get the job done and done well. Daily newspapers have been a massive industry in the U.S. economy until the past 15 years. The total revenues of U.S. daily newspapers constituted one percent of GDP as recently as 1960; that would amount to $232 billion in 2021. In 2000 the total revenues accounted for by daily newspapers was just under 0.6 of one percent of GDP. At that rate, the local journalism income for 2021 would be $133 billion. In 2021, the total daily newspaper revenues (including digital) will be less than $20 billion, and every year that number continues to decrease.

So providing the nation with a credible free press costs money, but, thanks to immense cost savings provided by the digital revolution, and being nonprofit, we do not need hundreds of billions of dollars. But we do need tens of billions, because the single most important and indispensable element of journalism remains skilled human labor, in competing newsrooms.

There actually is historical precedent. For much of the 19th century, when nearly all newspapers were delivered well below actual cost by the Post Office, the value of the postal subsidy, according to an 1840s government audit, effectively equaled 0.21 of one percent of GDP, which would amount to over $46 billion in 2021.

To be effective, the LJI would require an annual budget in this range. The best way to do that would be to set the annual budget at 0.15 of one percent of the previous year’s GDP. Keeping the budget to this formula would account for economic and population growth, as well as inflation in coming years, and provide stability for planning. So for 2022 the budget would be just over $34 billion. After initial set-up and administration costs, that would leave at least $33.5 billion to go directly toward local news production.

The LJI funds would be distributed at the same rate for every person, so a county’s LJI budget would be determined exclusively by its population. An annual budget of $33.5 billion divided by the US population of 333 million people, equals roughly $100 per capita. Therefore, a county of 250,000 people would get $25 million to produce and sustain local journalism. A county of 1 million people would get $100 million.

If people elect not to vote, the amount of the budget is not affected; it only means that fewer people would determine where the money goes.

The response of many when presented with a proposed budget like this is sticker shock, followed by “the cost is too high.” The correct response, the one that guided our Founders, is what will the cost be if we don’t do it? We can see signs all around us of what that looks like. We can no more lowball having a credible press system as our democracy crumbles than we would lowball military spending in the midst of a foreign invasion. The expenditure we propose is just over 4 percent of the annual cost of maintaining the military-industrial complex.

What are the upsides to this proposed solution?

There remains much to flesh out to make the LJI practical, and any plan must be flexible enough to account for unanticipated problems and issues.  But there are some current institutions that will immediately benefit, and a few are are worth noting.

Local PBS, NPR and community media services present a special case for the LJI. The stations all do a variety of programming where journalism is generally a small percentage of the programming produced. Indeed, on these local stations, the journalism that is broadcast tends to be national in character, as opposed to local. LJI support seems appropriate, because it will create more local journalism where little or none existed before.

Therefore, local NPR, PBS and community stations can compete for and receive LJI funding, but it must go to dedicated journalism that is specifically within the home counties of the stations—in other words toward journalism they are not doing much of at present—and it must meet all of the LJI criteria otherwise. Public media will retain its existing budget allocation separate and apart from this legislation. The LJI is a tool for enhancing, as opposed to replacing, existing sources of public funding.

Likewise, there are numerous high schools, colleges and universities with student news media and, often, formal journalism education and departments. These programs are often filled with students eager to enter the field and make their mark, but they have nowhere to get gainful employment. The programs are floundering as the profession of journalism disappears. Now these programs and these students, of which there remain tens of thousands of optimistic participants every year, will have an important purpose again and an institutional basis for existence, much like schools of education.

Then there is Big Tech. Facebook, Google and other Internet platforms have become the main purveyors of journalism to people in the United States. This has led to considerable controversy over these companies’ political power and their editorial judgment. With the LJI, Internet platforms will have popularly approved authentic local media to distribute in counties across the United States. The Internet platforms need simply acknowledge the popular news media choices in the counties people reside. This would seem to be in their own best interest. This also means the news produced through the LJI project can become ubiquitous in short order. Think of how Google search was able to help put Wikipedia on the map overnight.

The LJI also will offer philanthropists and foundations a way to effectively promote journalism at the local level. For the past 20 years, the philanthropic community has spent a good deal of money attempting to build up nonprofit journalism all across the nation. Most of these ventures have stagnated or failed because philanthropies seek to launch ventures but are in no position to support them in perpetuity. Now a philanthropy can give a two- or three-year grant to get a local newsroom up and running and, if it is well received, the LJI funds can kick in and take over thereafter.

One built-in outcome of the LJI is that it will result in several well-funded journalism outlets in each community, as had been the case for much of American history. By the final decade of the 20th century, this grand tradition of journalists competing to get stories, and to provide distinctive takes on the news, was deep in history’s rear-view mirror. One-newspaper towns—with the newspapers increasingly owned by large chains with no particular interest in the community or in journalism—were the order of the day in all but a handful of communities. The LJI will allow for a renewal of the diversity and competitive vigor that is essential for a muscular free press.

We offer this proposal in order to jumpstart a policy debate that is desperately needed. There is no time to lose. To read a longer version of this proposal that includes citations as well as much more material on media economics, the history of journalism, the Constitution and the free press, and important international comparisons, please click here.


© 2019 Columbia Journalism Review

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