Newspapers Still Hopeful About Getting Federal Bailouts
Article from For Liberty by Norm Leahy.
Among the thousands of businesses seeking government loans to help keep their operations and payrolls intact: newspapers.
But not all of them. As the Wall Street Journal reports, newspapers that have become part of larger media conglomerates do not qualify for SBA loans. Some members of Congress want to change that in the next round of federal stimulus funding:
Others in the industry and Congress, including Sen. Richard Blumenthal, (D., Conn.), are pushing for a pool of public funding that would be granted directly to local news organizations in the next aid package. Sen. Blumenthal described that funding pool as potentially hundreds of millions of dollars. “We’re really investing in democracy,” he said in an interview.
Independent media observers like Politico’s Jack Shafer, however, are much less willing to bail out newspapers, which he says were failing “long before coronavirus struck.”
It might make sense for the government to assist otherwise healthy companies—such as the airlines—that need a couple of months of breathing space from the viral shock to recover and are in a theoretical position to repay government loans sometime soon. But it’s quite another thing to fling a life buoy to a drowning swimmer who doesn’t have the strength to hold on. Newspapers are such a drowning industry. Readers have abandoned them in the tens of millions. Advertisers have largely abandoned them. For the most part, the virus isn’t causing them to sink. They’re already sunk. In the triage of rescuing flailing firms, some sectors must be left dead unless we want to make permanent welfare cases out of them—and that’s a much different argument than a bailout.
As much as Americans love to rail against the media, it’s an essential part of our democracy. But that does not mean taxpayers have to fund certain portions of the media as it currently exists.
The coronavirus has sped-up an inevitable reckoning in the newspaper industry. Billionaire Warren Buffet tried to make newspapers work, but failed, selling his holdings a year ago and saying newspapers were “going to disappear.”
“The world was changed hugely, and it did it gradually,” Buffett said. “It went from monopoly to franchise to competitive to … toast.”
Image Credit: By Jericho [CC BY 3.0 (http://creativecommons.org/licenses/by/3.0)], via Wikimedia Commons