No Government Bailout for Media

Following the federal bailouts extended to Detroit automakers and Wall Street bankers, government should refrain from trying to subsidize journalism, even as some traditional media continue to struggle amid a sagging economy and increased competition from the Internet.

That is the reaction of many 1st Amendment defenders and media scholars as well as a wide majority of Americans, after the Federal Trade Commission pondered a host of government intervention measures designed to preserve an essential component of U.S. democracy.

The study, a working paper developed in May under FTC Chairman Jon Leibowitz, considered offering federal subsidies for profit-stricken news outlets, including special anti-trust exemptions and tax-status changes along with changes in copyright laws.

But Americans—and a host of media experts—take a dim view of government involvement in media.

Some cry foul to even the notion of allowing government inside the nation’s newsrooms, wondering if funding in exchange for favorable coverage might be the new norm. News outlets are figuring out how to survive, scholars said, even if the cuts have been painful.

“The thought of the news industry being ‘saved’ by the government is pretty frightening,” said William McKeen, chairman of the journalism program at the University of Florida in Gainesville, noting the media’s crucial watchdog role to society.

“I think it’s best to let the press live or die on its own, free from meddling from the government,” McKeen said. “Plus, I’m not so sure newspapers are dead. They are reinventing themselves.”

Polling from Rasmussen Reports in June found that 85% of Americans think freedom of the press is more important than helping out newspapers, with 74% opposing taxing Internet sites to rescue fledgling print media, as the FTC considered. Only 19% “think the government should get involved in steps to save the newspaper industry and other forms of traditional journalism,” according to a Rasmussen poll of 1,000 Americans conducted June 6-7 and released June 10. Just 14% say a bailout of the news industry is “a good idea.”

The FTC’s most recent consideration marks an ongoing discussion on a news bailout, although any real policy action would require congressional approval. In December, at a media workshop discussing “How Will Journalism Survive the Internet Age?” the FTC chairman noted that traditional journalism was “in trouble,” but called for understanding changes in journalism before changing current laws. 

“We are not going to undo the profound changes brought by the Internet—nor do we want do,” Mr. Leibowitz said. “But aside from that, we should be willing to take action, if necessary, to preserve the news that is vital to democracy.”

Figures from the Newspaper Association of America released in May show that online revenues have increased with total online ad spending up close to 5% during the first quarter of this year. Other studies have found that print circulation continues to decline, down 30% since 2007.

A June 10 report from The Economist argued, with a headline reading “Not dead yet,” that “newspapers are become more balanced businesses, with a healthier mix of revenues from readers and advertisers.” But the story also cited American Society of Newspaper Editors data that estimated more than 13,000 newsroom jobs have disappeared since 2007.

Said The Economist: “It is grim to forecast still more writers losing their jobs. But whether newspapers are thrown onto doorsteps or distributed digitally, they need to deliver something that is distinctive.”

In congressional committee meetings last September, John Sturm, president of the NAA, spoke against government aid. “We don’t believe direct government financing is appropriate for an industry whose core mission is newsgathering, analysis and dissemination, often involving that very same government.”

Added Paul Starr, a professor of public affairs at Princeton University, who also testified before the Joint Economic Committee: “The press has not been regarded, and should not be regarded, as just another industry. Government has sought to advance it because a democratic political system cannot function without a diverse, free and independent news source.”