In The Atlantic, we wrote about several ways society can save local news as it collapses. Here I’m going to elaborate one: The federal government can significantly help local news to better inform their communities during the COVID-19 crisis by dramatically increasing their spending on public health advertising, and funneling a good chunk of that through local media.
For years, local governments have paid newspapers to run legal notices. On the national level, the federal government spends about $1 billion on advertising, according to a Government Accounting Office report. A little bit more than half comes from the Defense Department, placing those snazzy recruitment adds for the armed forces. The government also spends hundreds of millions to advertise the Census and other public health efforts.
Public Health Advertising — Fast and Simple
The federal government should spend at least another $1 billion on accurate, helpful public service advertisements — and require that a big chunk — half? — gets funneled through local media. A $500 million infusion in local media could allow for local news organizations to avoid massive layoffs and instead play the critical role they need to informing the community. This is not a bailout because these are valuable public health messages that need to get out anyway.
This spending can be put out in ways that don’t involve the government supporting favorite media outlets. The technology exists to spread advertising through formulas, using ad networks. And of course this doesn’t need to be only through print newspapers. It can go to TV stations, radio stations, websites and nonprofit news organizations.
This builds on a recommendation in the Federal Communications Commission 2011 report (of which I was the lead author). The report recommended that the government “consider targeting current government advertising more toward local media.” As for concerns that it would be too expensive for the government to get spending down to the local level, the report concluded:
“ Targeting existing federal advertising spending to local news media could help local news media models—both commercial and nonprofit, online and off-line—gain traction and help create local jobs, while potentially making taxpayer spending more cost-effective. In the past, it may have been more cost effective to buy national rather than local but technological improvements have made it possible to easily buy local media placements on TV, in print and online—so that shifting ads to local news media could prove more cost-effective for taxpayers… One critical point: with such an effort, it is imperative that this strategy be implemented in a way that is strictly non-political and not subject to political manipulation. This appears to be an achievable goal, as ad spending currently appears to be apolitical and new technology allows for the buying of ads in such a way that government entities need not be involved in the micro-decisions about which specific media entities get money. Targeting would need to be focused on broad industry-standard categories and quantitative measures.”
In other words, Congress or the government agencies would decree that a certain percentage of the funds should be funneled through local news outfits. It would include a definition of local news, perhaps borrowing from the Federal Communications Commissions rules, which rely on the percentage of the audience that is local. These can offer some basic guidelines:
- At least half of the funds should go to local non profit journalism organizations. If the government needs help navigatting that portion, the Institute for Nonprofit News or other such groups could manage it. This would help insure that the funds are not only going to mission-oriented entities but it will also be helping to create a better new-style local media ecosystem.
- Of the ones that go to for-profit media outfits, a half should go to small businesses. This should include ethnic-owned media. The hope would be that a disproportionate chunk of the money doesn’t end up in the hands of private equity firms.
In. general, this approach of using public health ad dollars has the benefit of being fast and simple. The government is already spending millions on public health ads. Just shifting their distribution plans could get money into the hands of local news organizations in a matter of days. We need an emergency infusion, right now, to keep media organizations afloat. I wouldn’t fuss too much with idealistic fine-tuning (i.e. “no ad money should go to private equity firms that have sucked out more than X% of money from local news organizations…”)
Now, let’s consider a more medium-term solution that goes beyond that. One of the biggest problems we have now is the high percentage of local news organizations that are owned by private equity firms or highly leveraged chains. Many of the local newspapers in these companies are doing great work, but they’re being pulled usually in the wrong direction by the internal incentive structures of those companies. They require their locals to produce an unreasonable level of profit. A government or large-scale philanthropic solution would ideally have a mechanism that would allow for:
- Local newspapers that are part of chains to spin off as locally owned entities
- Local newspapers that are part of chains to be converted into community-based nonprofits
- A series of pre-planned bankruptcies that would rescue the important assets of some local newspapers, for pennies on the dollar, to allow for the creation of community-controlled, locally-owned or non-profit news organizations.
This kind of approach would insure that a year from now, from the rubble will arise a local news system that is better than what we had before.
What’s the best mechanism for achieving these goals? We will need some legislative changes in bankruptcy law and some new legislative language making it easier for news organizations to be converted to nonprofits.
I’ll had more thoughts shortly on some of the other ideas that are out there including these from Free Press.