A MARYLAND SENATOR HAS INTRODUCED legislation that would allow newspapers to become non-profit organizations.
Sen. Benjamin Cardin cited the recent problems of the Seattle Post-Intelligencer, the Rocky Mountain News, the Baltimore Examiner and the San Francisco Chronicle, which have either ceased daily publication, announced that they might have to stop publishing, have filed for bankruptcy or have had to institute severe cutbacks that have impacted news coverage.
The Newspaper Revitalization Act would allow newspapers to operate as non-profits, if they choose, under 501(c)(3) status for educational purposes, similar to public broadcasting, according to the senator's office.
Newspapers would not be allowed to make political endorsements. But they would be allowed to freely report on all issues, including political campaigns. According to the bill, advertising and subscription revenue would be tax exempt and contributions to support coverage or operations could be tax deductible.
“We are losing our newspaper industry,” Cardin said in a press release. “The economy has caused an immediate problem, but the business model for newspapers, based on circulation and advertising revenue, is broken, and that is a real tragedy for communities across the nation and for our democracy.”
According to Barclays Capital, newspaper advertising revenue was down by about 25 percent for 2008, and circulation continues to steadily decline at most major newspapers as readers increasingly turn to alternative electronic news sources.
“This may not be the optimal choice for some major newspapers or corporate media chains, but it should be an option for many newspapers that are struggling to stay afloat,” Cardin said.
John Sturm, president and chief executive officer of the 2,000-member Newspaper Association of America, called the legislation a starting point for discussions already under way on ideas to help the industry.
“(The proposal) recognizes changes in the law might be necessary to provide a boost to newspapers trying to weather this difficult economic period,” he said.
Some journalists expressed concern about the restrictions on free speech that comes with the non-profit designation, particularly when it comes to limiting their editorial input on political races.*