Can Non-Profit Local Journalism Save Democracy? Robert McChesney says Yes We Can.

January 1, 2022

(5 Minute Read)

Hello 2022. New Year’s Day is a good time to reflect upon the state of local news journalism.

For a decade we’ve known that the advertising-dependent business model for local newspapers is broken (local TV and radio news aren’t far behind).

Paid-subscription models —you know, where citizens pay for what we read— are barely making it at the polarities of the market: national audiences reached by the New York Times or the Globe & Mail at one end, and niche followings at the other.

As yet we have no answer for the decline of mass audience news journalism in cities and towns other than the band-aids of government funding or, maybe, cash from Google and Facebook.

Thankfully the collapse of local news has been gradual rather than a dramatic whoosh. But nothing has interrupted the steady decline in revenue, journalists, and news coverage. It’s been charted in both Canada and the US.

So far, Canada’s triage approach to saving local news looks like this:

1. Federal subsidies and grants to newsrooms and a bit more money for the CBC. It’s been supplemented by Covid-emergency aid.
2. The federal Liberals’ promise (supported by the Conservatives) of legislation aimed at compelling Google and Facebook to pay publishers fairly for news content, as the Australian government has done.
3. New tax laws giving non-profit news organizations the opportunity to attract tax-deductible funding from philanthropic foundations and private donors. Montreal’s La Presse is the only major metropolitan newspaper where owners have been willing to dissolve their for-profit corporation and register a non-profit business with Revenue Canada. The Narwhal is the only other major publisher.
4. A modest readership federal tax credit where taxpayers shell out $500 for news subscriptions to recover $75. Revenue Canada won’t be releasing any data on the success of this program until 2024.
5. As yet nothing for local TV or news radio. It’s possible the federal Liberals could use the occasion of tabling a revised Bill C-10 Broadcasting Act to inject more industry cross-subsidies into local news.

The US is even further behind than Canada in addressing local journalism’s state of emergency:

1. For now, no Congressional aid to journalism. Emergency funding failed when President Biden’s Build Back Better omnibus legislation collapsed in December. The more comprehensive approach in a proposed Local Journalism Sustainability Act seems forever stuck in House and Senate committees.
2. No short-term prospect of Australian-style legislation to compel Google and Facebook to pay for news content.
3. Unlike Canada, a highly developed “philanthropic sector” that funds niche journalism, especially investigations and some local news.
4. Public broadcasting is a niche and national news source, with far less funding than the CBC on a per capita basis, and that’s not changing.
5. American local TV news is in less dire circumstances than Canada because US station owners have something Canadian TV doesn’t have, the intellectual property rights over their on-air broadcasts. This allows US stations to negotiate fees from cable companies picking up their signal.

Enter American media critic Robert McChesney and his frequent collaborator John Nichols with a sweeping, out-of-the-box proposal they call the Local Journalism Initiative, published a month ago (download the 30-minute PDF version below ).

Their starting point is this: the for-profit business model for written news journalism is finished for good at the local level. The only solution is massive public subsidy: a $34 Billion annual federal grant (equivalent to $100 per citizen in a national population of 340 million). Adjusting for population scale, the $34 Billion price tag is about 20 times greater than Canada’s current funding commitments to journalism.

The first thing you need to know about their proposition is they don’t want a dime going to national media organizations or for-profit newspaper chains. They want to sponsor an ecosystem of authentically local, county-by-county, independent newsrooms that adopt a non-profit model.

Here’s how it would work:

1. Lump sum federal funding would be available every three years for independent, non-profit local newspapers serving only their home county (there are 3000 in the US).
2. The funding would be up for grabs in a triennial popular vote in each county based on a universal voter franchise. Voters would be able to endorse more than one news source, perhaps up to five in large metropolitan counties.
3. Based on vote tallies, the term-funding (averaging $11 million annually per county) would be divided proportionately among eligible news organizations that earn at least one per cent of the vote. No news source could receive more than 25% of the funding.

On the thorny issue of defining a legitimate news organization, McChesney and Nichols offer this:

• The news organization must be non-profit: as a transitional measure they would allow for-profits if they convert to non-profit within six years;
• The news organization must demonstrate legitimacy by publishing regularly for at least six months prior to participating in a funding plebiscite;
• The news organization must produce original journalism at least five days per week. Unlike Canadian rules for federal funding, there is no requirement for a minimum amount of news reporting, as opposed to opinion writing;
• 75% of salaries must be paid to employees in the home county;
• The news organization must be completely independent and cannot be a subsidiary of a larger organization, even non-profit; and
• The news content must be online and available for free.

Yes it’s a paradigm shifting proposal with a huge price tag.

It helps to understand the perspective that McChesney and Nichols are coming from (they have been writing about the collapse of American journalism for two decades, including their 2010 book “The Death and Life of American Journalism.”).

As they tell it, for-profit chain media companies sucked the lifeblood out of a profitable newspaper industry beginning in the ’90s and ’00s, long before the Internet came along and delivered the coup de grâce.

They are very specific about what is to be saved, describing the core crisis in journalism and democracy as the dramatic loss of local newspapers. Local because the collapse of the business model leaves news deserts where powerful interests act unseen. Local because the every-day stories covered by a small or mid market Press ——stories they describe as “the connective tissue of a community”— “introduce people to their neighbours and encourage them to listen and to empathize with one another.”

That binding community experience is the opposite, they might have added, to the tribalism of social media that is rushing in to fill the void.

You don’t have to buy into all of McChesney and Nichols’ broader analysis (although you may recognize some of your own observations about media and politics in the pages of their books).

Their proposal presents as Utopian in 2021. But the consideration is whether by the end of the decade our local news media will be such a blasted landscape that sooner or later we are going to reach for paradigm-shifting solutions.