Why your city government should buy your local newspaper
Newspapers are critical for America's civic health. The government should fund them.
Local journalism is in trouble in America. Its business model, long based on advertising, has been badly undermined by the internet. Many surviving big-city newspapers, which weren't exactly thriving financially, are finding their carcasses picked over by vulture capitalists. The most recent victim was the legendary New York Daily News.
The Daily News reportedly bled money for years under former owner Mort Zuckerman, who recently sold to the hideously named Tronc, which has now fired half the paper's staff while simultaneously paying its former CEO Michael Ferro a $15 million severance package after he quit following alleged sexual harassment.
This is not some isolated tale. Hundreds of local papers across the country have been shuttered or merged over the last 15 years, while others have become mere shells stuffed with advertorials and syndicated opinion. Total newsroom employment has fallen from 74,410 in 2006 to 39,210 today. In huge swathes of the country, there is little or no coverage of local politics. Corruption festers in the ensuing darkness. The Daily News, for instance, won a Pulitzer in 2017 for coverage of the NYPD abusing eviction rules to kick poor people out of their homes. Who knows what they'll get away with now?
However, there is one way that cities could ensure at least a modicum of local reporting: Just set up their own municipally owned papers.
Journalism is not that expensive. Even small cities could easily muster up enough cash to get a municipal paper started. Let's take Denver, a medium-sized city where you could do bare-bones coverage with perhaps 100 editorial staffers — about what The Denver Post had before the most recent round of layoffs — and another 20 sales and administrative workers. Give them an average salary of $60,000, plus $18,000 worth of benefits (top managers will obviously make a lot more, entry-level employees a lot less), and a modest 18,000-square-foot office. Add in $10 million in printing, distribution, and website costs, and with office rental space going for about $27 per square foot, that gives it annual expenses of about $20 million — easily within the grasp of the $2 billion city budget.
Here's how it could work: A municipality would set up a public journalism corporation operating on an independent, nonprofit basis, and seed it with some public revenue. (In many cases, it could just buy up a failing local paper at a fire-sale price — the Washington City Paper, for instance, recently sold for a meager $50,000, while Tronc bought the Daily News for one single dollar.) On a steady financial footing — and not subject to the ludicrous profit demands of some hedge fund goon — they could build out or stabilize a basic reporting outfit. It'd be cheap, streamlined, and efficient.
For obvious reasons of journalistic independence, we wouldn't want this under the direct management of the city government. Overall control could be in the hands of an independent board, perhaps half appointed by the government and half elected by the paper's employees; or perhaps elected by the general citizenry, or some other method. The point is that the city would own the paper, but not control it directly, to avoid the appearance (or reality) of political influence. Funding would be locked in over a long period, and the city government would be legally forbidden from pulling funding over unfavorable coverage.
Ideally, revenues from subscriptions and advertising would cover ongoing expenses. It might take a couple years of subsidies to reach that point, but it's not impossible. Many local papers cored out by capitalists were funding themselves easily — the owners just preferred to take a quick one-time payout and destroy the business rather than collect 1 percent profits over time.
But of course, for many papers, ongoing government subsidies would be required for ongoing operations. This, however, is not some handout. It could easily pay for itself by tamping down on corruption.
For example, a recent study found that a local paper closing increased the interest rate on that city's municipal bonds by between 5 and 11 basis points (or 0.055-0.11 percent), significantly increasing borrowing costs. Presumably, that is due to cozy backroom deals with financiers, or the city just getting ripped off. More importantly (but harder to quantify), cost-ballooning sweetheart deals, kickbacks, or just sheer incompetence are much easier to get away with if nobody is paying attention.
Obviously, one probably couldn't expect the most hard-hitting coverage from such a government-funded operation. (Just look at the BBC.) But it could certainly offer a community basic coverage of what is happening with municipal politics, which is what is most urgently needed. Simply having a single reporter always on hand for city council meetings, bond sales, public project proposals, and so forth would do wonders for the democratic functioning of these cities. And remember, journalists can be a dogged, fiercely independent bunch. I would not be at all surprised if some municipal papers turned out to be excellent.
This may sound like a sort of wacky idea. But it's getting hard to imagine a local news business model that could survive both Facebook and Google swallowing up all the ad revenue in the world, and pitiless capitalists either bleeding their own businesses dry or deliberately destroying ones they don't like through the courts.
New York — with a metro area population nearly twice that of Belgium — is certainly the most favorable market in the country for the survival of at least some kind of local reporting. If local news can't survive there, then, say, Atlanta is probably hosed. The prospect is troubling enough that even cynically centrist Gov. Andrew Cuomo suggested state aid to prevent the Daily News layoffs — but cities should just take the next logical step. If they don't want their local governments to become a festering cesspool of corruption, they ought to start taking matters into their own hands.