RealClearPolitics Media Watch

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A Newspaper Bailout?

With newspapers seemingly failing faster than banks, many ideas have sprouted in an effort to "save" the business. Content-sharing between former rivals is one. Reducing or eliminating print editions is another. And a couple of chains have resorted to unpaid furloughs to save jobs.

L.A. Times' Tim Rutten, his own paper also in a world of trouble, thinks that making the readers pay is the only way out. His idea certainly isn't original, but his proposal adds one twist - allowing the newspaper business to be exempt from existing anti-trust laws:

Two major newspapers -- the Wall Street Journal and the Financial Times -- charge readers tiered fees to view their online journalism. The rest of the industry has decided there's more money to be made in charging advertisers for the larger audiences that free content attracts than in selling online subscriptions.

That's wrong, in my view, but it's hard to argue with as long as some major newspapers are giving their online journalism away; until they stop, nobody can risk charging for theirs. That's where the antitrust exemption would come in: It would allow all U.S. newspaper companies -- and others in the English-speaking world, as well as popular broadcast-based sites such as CNN.com -- to sit down and negotiate an agreement on how to scale prices and, then, to begin imposing them simultaneously.

Walter Isaacson, former managing editor of Time, thinks a model based on the concepts of iTunes and PayPal might work. And his system could be used to encompass all media, including magazines, blogs and even garage bands.

Another idea, suggested by two Yale money men David Swensen and Michael Schmidt, is to get rich guys to endow newspapers, as they do universities. Essentially, they'd be sugar daddies subsidizing non-profit outfits:

Note that just as endowed educational institutions charge tuition, endowed newspapers would generate incremental revenues from hard-copy sales and online subscriptions. If revenues were to exceed the costs of distribution, the endowment requirement would decline.

Many newspapers will not weather the digital storm on their own. Only a handful of foundations and wealthy individuals have the money required to endow, and thereby preserve, our nation's premier news-gathering organizations. Enlightened philanthropists must act now or watch a vital component of American democracy fade into irrelevance.

Either method, however, introduces the potential dangers of polarizing both the publications and the audience. Sure, maybe the New York Times and Wall Street Journal might get an endowment from Bill Gates or Warren Buffet, but what of the Bakersfield Californian and The State of Columbia, S.C.? And if we go the route of the cartels, inevitably the big papers and large chains will band together, leaving the smaller, locally-owned papers in the cold.

It is the demise of the local papers that would have a greater impact on journalism. After all, the masses - the majority of the people in the United States - do not read the Times or the Journal to get their news. If the smaller chains and papers disappear - or are forced to a pay model that their customers are unwilling to support, then we would have an increasingly ignorant and less engaged public. They cannot be blithely written off - as the elites wish. They need to be part of this conversation.