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article imageBailout for Newspapers Being Discussed in Senate

By Michael Krebs     Mar 25, 2009 in Politics
Democratic Senator Benjamin Cardin of Maryland introduces legislation to bailout U.S. newspapers. If endorsed, the move would allow troubled newspapers to operate as non-profits - in the vein of public television.
Newspapers have been making the news for some time. The shutdown of Seattle's Post-Intelligencer, the bankruptcy of the Tribune Company, the San Francisco Chronicle's moves to become a non-profit organization, the debt balance dance of The New York Times Company - on and on it has gone, as the economy has triggered deep self-assessments among U.S. newspaper organizations.
In the November 13, 2008 issue of BusinessWeek, the idea of a newspaper bailout was floated - in an admittedly tongue and cheek manner.
"TO: Senior executives at U.S. newspaper companies," the BusinessWeek editorial began. "FROM: Tongue & Cheek Lobbying Innovations LLC. The post-Election Day landscape brings great change for America and its governing philosophy, and this is why we must move quickly to craft a federal bailout for the newspaper industry."
The idea was later picked up by Frank Nicastro, a Connecticut congressman, after two of the state's newspapers were facing collapse.
"I truly believe that no democracy can remain healthy without an equally healthy press," said former Miami Herald editor, Tom Fiedler, in an interview with Fox News in January. "Thus it is in democracy's interest to support the press in the same sense that the human being doesn't hesitate to take medicine when his or her health is threatened."
Fast-forward to today's introduction of a new bill to bailout the newspaper industry.
"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," said Senator Benjamin Cardin in a Reuters report.
The Newspaper Revitalization Act would allow newspaper companies to operate as non-profit entities, reporting freely on all issue - including political issues. However, newspapers that receive this bailout would not be allowed to endorse political candidates.
The bailout is aimed at local and community newspapers - not corporate conglomerates that own other media and non-media assets on a broad scale.
"We are losing our newspaper industry," Reuters quoted Cardin as saying. "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."
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