Congress picks up on plight of newspapers

Bill to allow papers to become nonprofits prompts sad chuckle

Posted: Wednesday, April 15, 2009

U.S. Sen. Benjamin Cardin unintentionally injected some gallows humor into newspapers when he introduced the Newspaper Revitalization Act to Congress.

The Maryland Democrat's bill would change the tax code, allowing newspapers to become 501(c)(3) nonprofits. Newspapers operating as nonprofits prompted a collective sad chuckle from newspaper employees. The way things have been going lately, many of us feel like we work for a business that does not make any money and might never again.

In reality, many newspapers are making money, just not as much as the money-printing days of the 1990s. The reduced revenue - combined with unrealistically high profit margins, loads of debt, a recession and the disruption of the business model thanks to the Internet - has left many newspapers gasping for air, especially metropolitan newspapers.

Cardin's proposal is encouraging and intriguing, but I am not convinced it is the answer. Newspapers that opt for the nonprofit model leave an opening for politicians to meddle and forfeit political endorsements, a vital component to a newspaper's editorial voice and role in a community.

Nonprofits are not allowed to make political endorsements. The same would go for nonprofit newspapers, which is unfortunate. Endorsements, especially on the local and state level, allow a newspaper to be a part of the community dialogue. Endorsements also are the framework by which an editorial board builds its identity.

I telephoned David Holwerk, editorial page editor of The Sacramento Bee and the president of the National Conference of Editorial Writers, to get his take on nonprofit newspapers. Not surprisingly, he agreed with me about endorsements. He also raised another concern about Cardin's bill.

"It would be likely to bring the law of unintended consequences to play in ways you can't imagine," Holwerk said.

I share Holwerk's concern. Cardin's much-appreciated worry for newspapers is another politician's tool to control the press. It is entirely plausible that a disgruntled elected official could claim that any news story about politics violates the not-for-profit status.

As odd as government assistance might sound to newspaper journalists, there are examples of nonprofit news organizations in the form of public broadcasting.

Moss Bresnahan, president and CEO of KCTS, is comfortable with his station's 501(c)(3) status. He said the station has to remain noncommercial and is restricted in how it thanks donors.

He points out that public broadcasting has a history of providing quality programming not always found on commercial television.

"Public broadcasting emerged to do what the commercial marketplace couldn't," Bresnahan said.

There is a cost to quality programming and content. Those costs at KCTS are paid mostly by pledges. Bresnahan said that 70 percent of his funding comes from pledges, 6 percent from the government and the rest from corporations and foundations.

I wonder how many newspaper readers would pledge in addition to their subscriptions. Probably not enough to make up 70 percent of a newspaper's budget.

My skepticism does not preclude me from supporting the Newspaper Revitalization Act. No one model is going to save newspapers. Because it is not right for The Seattle Times does not mean it is not a good fit for other newspapers.

Besides giving newspaper journalists a chuckle, Cardin is helping make the precarious state of professional journalism a national discussion. That is good news.

• Ryan Blethen is associate publisher of The Seattle Times. His e-mail address is rblethen@seattletimes.com.



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