State legislatures advance measures to support local news
In this election year, we’ve been focusing on the business models that are failing or informing voters on local issues in a country with more than 200 counties where there is no substantial local news source.
Next, we’re looking at legislation in several states that’s designed to support local journalism. Ken Doctor is a news industry analyst. He’s also founder of the local news outlet Lookout Santa Cruz in California, which just won a Pulitzer Prize for its breaking news coverage of devastating floods.
Doctor spoke with “Marketplace Morning Report” host David Brancaccio, and the following is an edited transcript of their conversation.
David Brancaccio: States creating legislation to help firm up local news. I want to turn first [to the] East Coast, New York — the state’s budget for next year allocates, I think it’s $90 million worth of tax credits. That sit well with you?
Ken Doctor: I think it’s the best solution that’s out there at the moment. Tax credits for actually hiring journalists that are determined through basically the tax system — so you don’t have legislators or governors picking winners or losers — seems to be the best alternative. There, it’s $30 million a year for three years. And it goes pretty equally to larger and smaller sites. So this is something that’s being watched. And of course, in California, something similar is now in consideration.
Brancaccio: In California, I saw there were several bills, I think, being considered by the legislature. Any of those stand out for you?
Doctor: Well, there’s two major ones. There was one that was passed by the California Assembly last year, popularly known as a “link tax.” It passed the assembly, then got a hailstorm of opposition and slowed down. So a lot of publishers are very concerned they would lose a lot of traffic, even if they might gain some revenue from that tax. And the one that is very current today is Senate Bill 1327. And that bill is much more similar to the New York bill — it would provide tax credits for retaining, and a little additional, for hiring new journalists.
Brancaccio: Just so people understand on the previous measure, the link tax, the mechanics of it would be, I don’t know: David Brancaccio, journalist, writes a great piece about news deserts. And some other media, let’s say Facebook, links to it. They might have to pay a little fee for that?
Doctor: Yeah, a little fee — times millions and millions. So Facebook plainly decided they didn’t need news, and they weren’t going to pay it. And so they got out of it in Canada. They’re saying the same thing, would happen in the U.S. and in California, if it happened. Facebook has contributed about 20%, plus or minus to news sites’ traffic. But Google’s the big player: It is 25% to 50% of all of the traffic that comes to news websites in the U.S. So if they were to pull out of news links, that would be a huge hit to audience. So news publishers are really trying to figure out a way forward, once again, in a very unstable environment.