Should Government Subsidize News Organizations?

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February 21, 2019 2:11 p.m.

I was invited to join a discussion about the pros and cons of government subsidies as one way to save journalism. I put my thoughts together and posted them at that thread at Galley. But I thought I’d share what I wrote here too.

[reprinted from here]

Let me try to address on two fronts. First, we have a very limited experience with this with PBS. But PBS hasn’t really worked that way for a longtime. It has also always been marginal to the biggest sources of news – the networks, cable channels and major metro dailies.

Let’s say TPM was funded in large part of significant part by the government. Would this not inevitably lead to all the publication’s critics wanting the government to defund it? American political culture is very porous to this kind of pressure.

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There’s a whole other level of, can we report on government aggressively if the government is the source of our funding?

Two different big practical problems. I would say the first is by far the bigger one.

Now you can set up outside foundations that the government funds and then those foundations make grants. That helps some. Fundamentally, I don’t think it solves the problem. So I think on the merits, especially in such a polarized political culture, such a model at any scale is unworkable.

As a separate matter, as a lapsed historian, there is little in my knowledge of the breadth of American history makes this at all likely to happen on any sustainable basis. So we can summarize this as it shouldn’t happen and it won’t happen.

On the issue of profit, to me it’s not so much profit as sustainability. Can news organizations do their work on a sustainable basis on commercial terms? I think that is extremely important. Profit is much less important. But it’s still important because that means you can attract investors and raise money, though hopefully ones that want reasonable and sustainable profits that are a reasonable expectation in the media business, not the hockey stick model that has done so much to distort the media business.

Sustainability is key because what if a metro daily is about to be scrapped for parts to a private equity firm, we want some tax structure that facilitates handing it over to the journalists and run it – hopefully – on a break even basis forever.

A more complicated question to me is non-profit support. To me the first cardinal point is that we should have a diverse news ecosystem – so a lot of different models is key. I think we all agree that Pro-Publica, which I see as the archetype nonprofit news operation, has become simply irreplaceable. But I do not think that’s a general model. The kind of deep diving PP does is very congenial to the nonprofit model.

I have some experience in the pre-PP nonprofit journalism sector. There’s a lot of great stuff. But one key problem is that you tend to follow your funders. I don’t mean that in a corrupt or mercenary sense. I mean that the funder wants to see this kind of stuff or that kind of stuff so that’s what you do.

That means their audience is fundamentally the foundations. That’s a problem. Because the customer and the audience should be the reader. I am not saying this is an unworkable problem. Again, a huge amount of great journalism is produced this way. So I am all for a vital nonprofit journalism sector, as opposed to my deep skepticism of government funding. I just don’t think it works as the dominant or majority model. You want your business to be fundamentally tied to your readers.

Why?

At the end of the day I think it goes to the quality of the journalism, to the fundamental independence of the publication, and the vitality of the operation.

None of this is to say that policy is irrelevant to this equation. As we already alluded to in our Twitter exchange. Anti-trust enforcement with the major platforms would be a huge, huge boost. Some analogue to the way the postal service used to have a de facto subsidy toward periodicals. I think there’s also quite a lot that could be done creating tax and legal structures to sustain the kind of diversity of models we’ve discussed. These wouldn’t be direct subsidies and in the nature of things they would be an even playing field, more or less. But on the basic point that this is the model for saving journalism, I’m pretty certain it’s not for both substantive and practical reasons, as I argue above.

I fear people pushing this line don’t grasp the full scale of the money involved even in a fairly small operation.

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