Newspapers are in trouble, but never fear, the Congress is here to help!

From Thomas Ferraro of Reuters:

With many U.S. newspapers struggling to survive, a Democratic senator on Tuesday introduced a bill to help them by allowing newspaper companies to restructure as nonprofits with a variety of tax breaks.

"This may not be the optimal choice for some major newspapers or corporate media chains but it should be an option for many newspapers that are struggling to stay afloat," said Senator Benjamin Cardin.

A Cardin spokesman said the bill had yet to attract any co-sponsors, but had sparked plenty of interest within the media, which has seen plunging revenues and many journalist layoffs.

Cardin’s Newspaper Revitalization Act would allow newspapers to operate as nonprofits for educational purposes under the U.S. tax code, giving them a similar status to public broadcasting companies.

Under this arrangement, newspapers would still be free to report on all issues, including political campaigns. But they would be prohibited from making political endorsements.

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

I fail to see how a newspaper would qualify as a non-profit.  The simple fact that they have advertising and subscription revenue seems to run against the grain of what “non-profit” means.  Not to mention the free speech implications of this.  While I personally wouldn’t mind seeing fewer endorsements from papers because, at least with the Des Moines Register, you can pretty much guess who they will endorse (and that person rarely has an “R” after their name) I just don’t think it is in the best interest of a free press.

Also I wonder if Senator Cardin would propose the same for talk radio if it struggles?  Somehow I doubt it.  There is another issue with this as well, as Ferraro writes later on.

Newspaper subscriptions and advertising have shrunk dramatically in the past few years as Americans have turned more and more to the Internet or television for information.

Times are changing, and how people get their news is changing along with it.  Newspapers were struggling before the economy turned south.  All this bill would do is prolong the inevitable.  Newspapers either need to learn to adapt with the changing times or close their doors.

4 comments
  1. You state: “The simple fact that they have advertising and subscription revenue seems to run against the grain of what “non-profit” means.”

    Iowa Public Television basically has sponsorship/advertising as well as “friends club” which is a pseudo subscription model.

    I think the whole idea is worth thinking about and exploring. I'm sure it is loaded with all kinds of issues.

    Paul

  2. When you actually look at what can qualify as a non-profit these days, I don't think it's too much of a stretch to include newspapers even if, logically, it makes littlse sense (and since when has our government been known for acting overly-logical?)

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