DOC PREVIEW
Funding the News

This preview shows page 1-2-19-20 out of 20 pages.

Save
View full document
View full document
Premium Document
Do you want full access? Go Premium and unlock all 20 pages.
Access to all documents
Download any document
Ad free experience
View full document
Premium Document
Do you want full access? Go Premium and unlock all 20 pages.
Access to all documents
Download any document
Ad free experience
View full document
Premium Document
Do you want full access? Go Premium and unlock all 20 pages.
Access to all documents
Download any document
Ad free experience
View full document
Premium Document
Do you want full access? Go Premium and unlock all 20 pages.
Access to all documents
Download any document
Ad free experience
Premium Document
Do you want full access? Go Premium and unlock all 20 pages.
Access to all documents
Download any document
Ad free experience

Unformatted text preview:

Center on Communication Leadership & PolicyResearch Series: January 2010Public Policy and Funding the Newsby Geoffrey Cowan and David Westphal© 2010 University of Southern CaliforniaAbout the AuthorsGeoffrey Cowan, director of the Center on Communication Leadership & Policy, dean emeritus of theUSC Annenberg School and USC University Professor, holds the Annenberg Family Chair inCommunication Leadership. Cowan served under President Clinton as the director of Voice of Americaand director of the International Broadcasting Bureau. In other public service roles, he served on theboard of the Corporation of Public Broadcasting, chaired the Los Angeles commission that drafted thecity’s ethics and campaign finance law, and chaired the California Bipartisan Commission on InternetPolitical Practices.Cowan is the Walter Lippmann Fellow of the American Academy of Political and Social Scienceand an elected member of the American Academy of Arts and Sciences. He chairs the CaliforniaHealthcare Foundation board of directors and serves on the Human Rights Watch board, where he co-chairs the communication committee. He previously was a fellow of the Shorenstein Center on thePress, Politics, and Public Policy at Harvard’s Kennedy School of Government. A graduate of HarvardCollege and Yale Law School, Cowan is an award-winning author, playwright and television producer.David Westphal, senior fellow with the Center on Communication Leadership & Policy, is executivein residence at the USC Annenberg School. Until joining USC in fall 2008 he was Washington editorof McClatchy Newspapers, the nation’s third largest newspaper company. Westphal joined McClatchyin 1995 as deputy bureau chief and was named bureau chief in 1998. With McClatchy’s purchase ofKnight Ridder in 2006, he became editor of the combined Washington bureaus and the McClatchyTribune News Service. Previously, he was managing editor of The Des Moines Register in Iowa for almostseven years. His newspaper career spanned nearly four decades.This project is made possible in part by a grant from Carnegie Corporation of New York.The statements made and views expressed are solely the responsibility of the authors.Geoffrey Cowan David WestphalIntroductionby Geoffrey CowanAt a time when the financial model for newsis facing the greatest crisis in decades,the level of government funding for news organ-izations has been declining sharply. Unless a newapproach is created, that decline is likely toaccelerate. Yet most commentators, includingmembers of the press, seem unaware of the levelof government support that journalism hasenjoyed throughout our nation’s history, or of theways in which it is now disappearing. This reportbegins the process of documenting the cutbacksand presenting a possible policy framework forthe future.The sharpest cuts have come in the level ofpostal subsidies for news, which have beenreduced by more than 80 percent over the lastfour decades. Thanks to the visionary leadershipof George Washington and James Madison,mailing costs were heavily subsidized by thegovernment for the first 180 years of our nation’shistory – from the Postal Act of 1792 to thePostal Reorganization Act of 1970. In 1970, thePostal Service subsidized 75 percent of the cost ofperiodical mailings. Today, the subsidy has fallento just 11 percent. In today’s dollars, that’s adecline from nearly $2 billion in 1970 to $288million today. Magazines that would still beprofitable under the arrangement established byour founders are now closing at a precipitous rate.Public and legal notices have also been animportant source of revenue for the publishingindustry throughout American history. Thanks tolegislation and regulations adopted at every levelof government, they remain a huge source ofrevenue today. They provide hundreds of millionsof dollars to periodicals ranging from local dailyand weekly papers to national publications suchas The Wall Street Journal. But inevitably they willbe reduced and eliminated, superseded byadvances in new technology. Cash-strappedgovernment agencies are asking courts andlegislative bodies to allow them to make theswitch to the Internet. Legislation to allow atransition to the Internet has been introduced inat least 40 states, and in some the switch to theWeb is under way. Arizona school districts, forexample, are now free to publish their yearlybudgets on their own Web sites, avoiding costlyplacement in local newspapers. PresidentObama’s Department of Justice recently proposeda similar transition. While lobbyists and lawyersfor some media companies are trying to blockthese changes, a day of reckoning is clearly on thehorizon. The loss in revenue will be substantial.Print publications of all kinds also benefitfrom a wide range of tax breaks that have beenspecifically designed to help news outlets. Thereare special tax provisions in the federal tax codeand in most states. Collectively, they account forhundreds of millions in lost tax revenues. Forexample, the federal tax code has provisions forthe special treatment of publishers’ circulationexpenditures as well as special rules for magazinereturns. Those two sections of the code accountfor a loss of $150 million in taxes – or a subsidy of$150 million for the industry. Tax breaks at thestate level, including favorable treatment ofnewsprint and ink, amount to at least $750million. The actual amount is probably muchhigher because many states don’t report separatedata for publishers. How long thosepreferences will persist is anyone’s guess.In a variety of ways, the government has alsohelped to assure the financial stability of broad-casting, cable and the Internet. Broadcasters weregiven their licenses for free; part of the trade-offfor a free license, however, was the explicitrequirement that the station use some of itsPublic Policy and Funding the News 1resources to provide news and information to theaudiences it served. Cable news channels are thedirect beneficiaries of FCC rules that allow cableoperators to bundle services, requiring every cablesubscriber to pay a fee to MSNBC, CNN and FoxNews – whether they want them or not. Thosesubscriber fees are more important than adver-tisements in funding the bottom line of all threecable news outlets. Until recently, none of theover-the-air broadcasters (including publicbroadcasting stations) received a single dollarfrom cable subscriber revenue. If the FCC hadfollowed the suggestion of former ChairmanKevin


Funding the News

Download Funding the News
Our administrator received your request to download this document. We will send you the file to your email shortly.
Loading Unlocking...
Login

Join to view Funding the News and access 3M+ class-specific study document.

or
We will never post anything without your permission.
Don't have an account?
Sign Up

Join to view Funding the News 2 2 and access 3M+ class-specific study document.

or

By creating an account you agree to our Privacy Policy and Terms Of Use

Already a member?