White House To Newspapers: Evolve Or Die

By Justin Gardner | Related entries in Bailouts, Legislation, Media

Okay, that’s not really what they said, but it’s certainly the net effect. Because there will be no bailout money forthcoming for this industry.

More from the AFP:

The White House on Monday expressed “concern” and “sadness” over the state of the ailing US newspaper industry, but made clear that a government bailout was not in the cards.

“I don’t know what, in all honesty, government can do about it,” White House spokesman Robert Gibbs told reporters. “That might be a bit of a tricky area to get into given the differing roles.” [...]

“Obviously (President Barack Obama) believes there has to be a strong free press,” the spokesman said. “I think there’s a certain concern and a certain sadness when you see cities losing their newspapers or regions of the country losing their newspapers.”

However, while their may be no help from the White house in the form of loans, there could be a legislative solution on the horizon that would give newspapers special tax exempt status…

A US senator recently introduced legislation aimed at helping US newspapers by giving them tax breaks as non-profit organizations, an arrangement similar to that enjoyed by public broadcasting outlets, which survive on tax-deductible contributions from listeners.

Advertising and subscription revenue would be tax exempt and contributions to support coverage or operations would be tax deductible.

The only catch? Newspapers could no longer editorialize or endorse political candidates. But, honestly, do you really pay attention to newspaper endorsements anymore? I know it’s a time honored tradition, but if I had to pick between survival and subjective political opinion, I’d pick survival every single time.

Simply put, newspapers’ true value is found in their objective coverage of the locale they belong to, and if this legislation gets passed I hope they seriously consider that option.


This entry was posted on Monday, May 4th, 2009 and is filed under Bailouts, Legislation, Media. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

2 Responses to “White House To Newspapers: Evolve Or Die”

  1. kranky kritter Says:

    Bravo. This shows the WH gets it on this issue.

    Newspapers need a new and sustainable business model. No bailout will provide that. Either the7 continue to produce what they produce by collecting sufficient revenue from advertisers and news content consumers, or they continue to adjust the product to produce what they can afford to profitably produce.

    [Notice that in contrast that it is possible top domestically produce autos at a profit as long as you can manage labor and legacy (retiree)costs. My sense is that the issue with declining revenue is far more serious with newspapers. I can't download a pickup truck for free on the internet.]

    Let’s face it, the news industry faces a substantial problem with parasitism. It’s getting harder and harder to make remaining customers pay for what everyone else is consuming at no cost. Ultimately, sooner or later, the true monetary value of what journalists produce will be established, and the people who want that product will be asked to pay for it.

    And you know what? That’s fair.

    Expect a big battle over copyright laws and internet taxes and such over the next decade or so. I know many folks can’t stomach it, but if you ask me its a question of when, not if.

  2. janjanjan Says:

    I love the concept that newspapers would have to stop endorsing candidates in order to be given tax-exempt status. Somebody better let the IRS know that political expression is a no-no for tax-exempt institutions.

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