If the Democratic plan for a $2.2 trillion social safety net and climate package makes it through the Senate, where it faces a stiff challenge, it will provide $1.67 billion over the next five years for newspapers, websites, radio and TV stations, and other outlets that primarily cover local news.
According to The NY Times, eligible outlet could reap up to $25,000 for each locally focused journalist they employ in the first year and $15,000 in each of the next four. The relief would come in the form of a payroll tax credit earmarked for local news organizations, a small part of the Build Back Better bill that the House passed on Nov. 19.
News outlets across the country have struggled for decades, as the rise of digital media slowed their once-dependable streams of revenue — print ads and classifieds — to a trickle. With few exceptions, those publications have not made up the difference with digital advertising, an industry dominated by Google and Facebook.
Media outlets funded by political action committees would not be eligible. The same holds true for news organizations that do not carry media liability insurance or fail to disclose their owners. News publishers with more than 1,500 employees at a single location also would not qualify, under the terms of the bill. The New York Times would be ineligible for the tax credit, a company spokeswoman said.
Large chains that include publications focused on local coverage would be eligible. One of them, Gannett, borrowed more than $1 billion two years ago from the private equity firm Apollo Global Management as part of its merger with Gatehouse Media.
Other major chains with Wall Street ties could also benefit from the tax credit. Tribune Publishing and MediaNews Group, both owned by the hedge fund Alden Global Capital, appear to be eligible, as does McClatchy, which is owned by the hedge fund Chatham Asset Management.
Maribel Perez Wadsworth, the president of news at Gannett, defended the inclusion of her company, which publishes roughly 250 local newspapers, including The Arizona Republic, The Detroit Free Press and The Milwaukee Journal Sentinel (as well as USA Today). “Scale allows us to solve for some things,” she said, “but at the end of the day they’re local newsrooms with local reporters and photographers and editors, up against the same headwinds.
There are now 200 U.S. counties without a newspaper, according to researchers at the University of North Carolina, and more than 2,100 papers have shut down since 2004. According to the Pew Research Center, the number of journalists at newspapers fell to 31,000 last year from 71,000 in 2008.
Supporters of the tax credit note the role that local news outlets play in bringing communities together. Without them, who will chronicle town meetings, hold local official accountable and note births, deaths and weddings?
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