Can State Governments Save Local Newspapers?

Politicians and journalists are getting over their historic squeamishness about taxpayer money going to news outlets. A report from New England.

Dusty Christensen still has his job, but many of his colleagues are not so lucky. A staff reporter at the Daily Hampshire Gazette in Northampton, Massachusetts, his newsroom lost 14 positions last year to layoffs and buyouts. Another 29 positions were cut when the paper’s owner, Newspapers of New England, outsourced its printing to Gannett, ending a more than 200-year history of the paper being printed locally.

It’s a familiar story for anyone who’s been following local journalism in recent years.

Newspapers across America are in peril, particularly small and midsized ones. The collapse of the traditional advertising model has caused upheaval across the industry. Since 2004, more than 2,000 newsrooms across the country have closed, most of them weeklies. The pandemic only exacerbated the problem. At least 70 newsrooms have shuttered since March 2020, according to the Poynter Institute. Most recently, Alden Global Capital, a hedge fund famous for exploiting struggling papers, gained shareholder approval to buy Tribune Publishing—an ominous sign for the papers under the company’s umbrella like the Chicago Tribune and the Baltimore Sun.

Yet amid closures and consolidation, some papers have found survival strategies. A benevolent billionaire could take ownership, as was the case for the Los Angeles Times and the Washington Post. A newspaper could become a nonprofit, like the Salt Lake City Tribune. There are even mixed models where a paper is owned by a nonprofit, as with the Philadelphia Inquirer. But Christensen and his colleagues are among those charting a different path to save their newspaper—lobbying their state government for support.

The Pioneer Valley News Guild, the union which represents Gazette staffers, has publicly engaged elected officials in an ongoing dialogue about the future of their paper—and what role the legislature might have in ensuring its sustenance. The Massachusetts legislature passed a bill earlier this year to create a commission on the state’s local news crisis. Christensen said he sees Northampton’s state representative, Lindsey Sabadosa, as an important ally in ensuring that the commission considers the needs of smaller, rural news outlets.

But Christensen and Sabadosa are not only interested in studying the problem; they have ideas for fixing it. For starters, they may be able to take advantage of an already existing state program. In 2019, Massachusetts relaunched its Office of Employee Involvement, which helps aging business owners turn their company over to their workers upon retirement, either via a trust that holds company stock on behalf of employees or through a co-op model where workers own the company shares and benefit from sharing profits. Sabadosa told me she believes the office could be useful in facilitating a more sustainable ownership for the Gazette and papers like it across the state. Christensen agrees, though other guild members have mixed opinions on the idea.

While the newly formed Massachusetts commission has yet to propose a tangible policy remedy, its very existence reflects a novel and growing trend of state government interest in sustaining local journalism and—even more remarkably—a willingness on the part of such journalists to accept it. In New Jersey, the state allocated $500,000 in funds to support both traditional and emerging local journalism. In Connecticut, lawmakers introduced a bill to limit the possibility of exploitative ownership of the Hartford Courant, which was acquired by Alden in the Tribune deal.

Traditionally, journalists have been wary of the conflict of interest—or even the appearance of a conflict—that accepting government assistance could pose. But as the industry continues to crumble and the gravity of the crisis swells, some lawmakers and journalists have come to see cautious collaboration as an existential imperative.

A Legislative Life Raft

It would probably be easier if a benevolent billionaire bought the Hartford Courant. The Courant, first purchased by Tribune Publishing in 2000, was bought by Alden Global Capital on May 21 when the hedge fund received shareholder approval to buy out the rest of Tribune’s stock. Alden had already owned a 32 percent stake in the company. Yet, even before Tribune Publishing’s fate was sealed, Connecticut State Senator Matt Lesser constructed a life raft for the paper.

The Hartford Courant Media Company is an incorporated entity, meaning it has a business charter through the Connecticut State Assembly, which the state legislature can tweak under state law. That’s why Lesser was able to introduce Senate Bill 1043 this spring, which would limit the amount of debt the Hartford Courant’s owner could take out against the paper. Only debt “in the public interest” would be allowed under the bill. It also gives the state attorney general or subscribers the opportunity to sue the Courant’s owner for taking out exploitative debt and seek injunctive relief from the court in order to stop such action. The proposal is one with Alden in mind.

The hedge fund is famous for cutting staff, outsourcing services, and selling newsroom resources, like real estate. Newspapers under Alden’s control have suffered from its bad investments. Look no further than Alden’s misadventure investing in a pharmacy chain in 2018. When the deal went wrong, it was Alden’s newspapers, which were maintaining profit margins achieved by deep cuts, that were forced to offset the losses. In fact, since the sale, Alden has already leveraged Tribune’s capital to take on more debt, according to reporting from the Chicago Tribune.

The Hartford Courant Guild, the paper’s union, has stated its support for Lesser’s bill, despite opposition from the Courant’s publisher and editor-and-chief, Andrew Julien, who cited fears that government intervention may challenge the paper’s independence in his testimony before the Connecticut Senate in March.

But guild unit chair and Hartford city government reporter Rebecca Lurye said in the four years she’s been at the publication, about 20 positions have been either eliminated or left unfilled. Lurye said she isn’t worried about the press being silenced by the state legislature, who wouldn’t gain any editorial oversight through the law anyway. Rather, she’s worried about being silenced by corporate greed. “It feels so obvious to us that this is not a bill that has anything to do with content,” Lurye said during a phone interview.

At the same time, Lurye and the Hartford Courant Guild are still trying to court a local owner, or group of high net-worth individuals, to buy the paper. She said there are interested parties and this bill sends them a clear message: The state of Connecticut is invested in the future of the Courant. “We see it is really all connected,” Lurye said. “Anything that the state legislature does makes it less attractive for a hedge fun like Alden.”

The measure has made it through a Senate committee hearing with bipartisan support and could soon be voted on in the upper chamber, Lesser said. He’s conscious of First Amendment considerations, but said he doesn’t care about how the Courant decides to cover the news. He cares whether it’s around to cover the news, period: “I don’t see anything in the First Amendment that says that government has to be neutral between having a press and not having a press.”

A Time for New Ideas

Washington Post media columnist Margaret Sullivan takes a careful tone when asked about government action on behalf of the press. During a phone interview, she said the tension that has historically existed between journalism and the government is essential for an accountable democracy. However, local journalism’s financial situation “is changing for the worse by the day.”

Many of the lawmakers behind efforts to support local journalism cite a rising fear of news deserts, or areas with limited-to-no access to local journalism. There are roughly 200 news deserts—counties without a local newspaper—in the United States, and hundreds of other counties are on the precipice of becoming one according to research from the University of North Carolina at Chapel Hill. A trio of media and political scholars published an article in 2019 that showed political polarization also increases in areas where there is no or weak local news. As Politico Europe reported in 2018, Donald Trump outperformed previous Republican candidates to claim his 2016 presidential win in precisely the parts of the country without a robust local news outlet. A study of 11 California papers showed that as local news wanes, so does election competition and voter turnout. In short, these publications are essential to a functioning democracy.

“It is definitely time to consider some ideas that in the past would have been, you know, unacceptable,” Sullivan told me. “We still need to be really careful because credibility and independence is what we have. We don’t want to cut into that, but at the same time, we don’t have to do things the same old way.”

Of course, every proposed solution comes with it a corresponding compromise. In the case of pushing for national public policy to mitigate the loss of local news, the compromise is time. Even “no brainer” ideas like issuing tax credits for local news subscribers, as Steven Waldman has argued for in the Monthly, could take months, maybe even years, of deliberation among members of Congress before implementation.

Crafting and passing new state laws can take less time, according to Abernathy. It also offers stakeholders the ability to assess the local information ecosystem. When midsized metro daily papers like the Courant shrink, their regional coverage of smaller surrounding communities and specialized beats, like the environment and business, inevitably evaporate, too. You lose all “those topics that show you how a state is connected,” Abernathy said.

More states could also follow New Jersey’s lead in issuing a cash infusion to their papers. On the surface, that may appear to come with the greatest possibility of an appearance of a conflict—or a real one. But, Abernathy said, the practice recognizes that informing the public may require a public investment. The state’s execution of the idea also offers a model that others could wisely replicate. The New Jersey government issued funds to an independent entity that then allocated the money to needed recipients. Essentially, the state adopted a model similar to that of public media, which  has sustained organizations like PBS for decades.

Of course, a state-level approach is not a panacea. Some newspapers will find a road to solvency on their own. Others may pivot to new business models. But in the meantime, too much is at stake to let critical publications collapse, which is why the survival of the local press is becoming a policy priority in a handful of states.

“I think there is an awareness,” Abernathy said, “starting at the very basic small level. If you don’t have journalism at the local level, you don’t have it at the national level, ultimately. I think there is a movement to consider a range of policies.”

There isn’t enough data yet to offer conclusive evidence as to whether these ideas will work; we are just at the beginning of the experimental phase. But state remedies are now being considered in the concert of possible solutions to save local news—and everyone who cares about the fate of American journalism should start paying close attention.

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Anna Brugmann

Anna Brugmann is a journalist based in Washington, D.C. and an intern at Open Markets Institute. She is a former editorial intern at the Washington Monthly.