Sen. Cardin's Plan to Save Newspapers

From Washington Post:

A Plan to Save Our Free Press

By Benjamin L. Cardin
Friday, April 3, 2009

The newspaper industry is turning upside down. The Seattle Post-Intelligencer, the Rocky Mountain News, the Baltimore Examiner and the San Francisco Chronicle are among the papers that have ceased daily publication or announced in recent months that they may have to stop publishing. Not long ago, Tribune Co., owner of the Baltimore Sun, filed for bankruptcy.

None of this bodes well for our democracy. Our country depends on an open and free press to monitor what happens in our communities so that Americans can make sound judgments about their lives and leaders. Thomas Jefferson, a man who was frequently vilified by newspapers, summed it up best when he said: "If I had to choose between government without newspapers, and newspapers without government, I wouldn't hesitate to choose the latter."

Like Jefferson, I believe that a well-informed public is the core of our democracy. How can we forget the role newspapers played in uncovering the Watergate and Enron scandals or the AIG bonus debacle? News stories, reported by journalists, often bring to public attention decisions and actions that affect all of us. While the world has increasingly fast access to news, one fact remains unchanged: When it comes to original, in-depth reporting that records and exposes actions, issues and opportunities in our communities, nothing has replaced newspapers. Most, if not all, sources of journalistic information, from Google to broadcast news or punditry, gain their original material from the laborious and expensive work of experienced newspaper reporters diligently working their beats over the course of years. Not hours, years.


The Pew Research Center's Project for Excellence in Journalism reports that a typical metropolitan paper runs 70 stories a day, counting the national, local and business sections. In contrast, a half-hour of television news includes only 10 to 12 stories. Research shows that broadcast news follows the agenda set by newspapers, often repeating the same items with less detail. And newspaper reporters forge relationships with people; they build a network, which creates avenues to information.

But America is losing its newspaper industry. While the economy has caused an immediate problem, the business model for newspapers, based on circulation and advertising revenue, is broken. That decline is a harbinger of tragedy for communities nationwide and for our democracy.

This is why I introduced the Newspaper Revitalization Act to help our disappearing community and metropolitan papers by allowing them to become nonprofit organizations. My goal is to save local coverage by reporters who know their communities, work their beats and dig up the stories that are important to our daily lives. Today, newspapers do that job; all other outlets -- TV, radio, blogs -- feed off that base. My bill would allow newspapers -- if they choose -- to operate under 501(c)(3) status for educational purposes, similar to public broadcasters.

Under this arrangement, newspapers would not be allowed to make political endorsements but would be permitted to freely report on all issues, including political campaigns. They would be able to editorialize and take positions on issues affecting their communities. Advertising and subscription revenue would be tax-exempt, and contributions to support coverage or operations could be tax-deductible.

The measure is targeted at local newspapers serving communities, not large newspaper conglomerates. There is little chance these conglomerates would find such an arrangement appealing because they depend on a revenue stream to remain operational. I want to make clear that this proposal would involve no infusion of federal taxpayer money. In fact, because newspaper profits have fallen in recent years, no substantial loss of federal revenue is expected.

Under current IRS regulations, a nonprofit entity must operate in a manner in which distribution is accomplished in a way distinguishable from ordinary commercial publishing practices. My legislation would create a category under the Internal Revenue Code for a "qualified newspaper corporation."

Converting to nonprofit status may not be the optimal choice for some newspapers -- particularly those that rely on a significant revenue stream -- but this legislation would provide an alternative business model that could help many newspapers keep operating. I am confident that citizens or foundations in communities across the nation would be willing to step in and preserve their local papers. Newspapers provide a vital service. It is in the interest of our nation and good governance that we ensure their survival.

The writer is a Democratic senator from Maryland.