Cities Funding Newspapers? What Could Possibly Go Wrong!

I've got a GWEAT idea! ||| The Columbia Journalism Review relays
the
news that two newspapers—The Fitchburg Star,
near Madison, Wisconsin; and the Winston-Salem
Chronicle—have recently taken money from their respective city
halls in order to stay in print.

In
Fitchburg, the city is paying $30,000 to revive and mail out
free copies of a print edition that had been online-only since
2009. In
Winston-Salem, the city council approved a $100,000
low-interest loan to an existing weekly that covers the black
community, after rejecting the newspaper’s application for a
straight-up grant.

As the CJR’s Corey Hutchins notes,

with many local media outlets around the country still
struggling in the wake of major disruptions to their business
models, it’s worth asking: Is this going to be a thing now?

Your tax dollars at work. ||| I sure as hell hope not. Governments are not
banks; they should not be in the
business of lending money to businesses. Why? Because the loan
decisions are definitionally politicized, lead to
cronyism and favoritism, and have a miserable
track record of both reimbursement and delivering the
perennially over-hyped promises of jobs and social goods. If
taxpayers wanted to capitalize a community bank, they could freely
make that decision on their own, with the expectation that the
investment would have a decent shot of paying personal dividends.
Money extracted from their wallets by threat of force and then
loaned out to politically favored businesses will never, ever, ever
be repaid to the people from which it came. That’s morally
wrong.

Bad as government lending is, government grant-writing to
businesses is even worse. Who is your biggest customer, when your
very existence depends on the cash and good graces of City Hall? It
certainly isn’t the consumer of your product. Businesses for whom
ostensible customers are second-class citizens will by definition
not be run efficiently; markets in which government so bastardizes
incentives will by definition be distorted. And to state the
obvious, the journalistic ethics of such deals smell worse than a
dog park after the snow melts.

Watch the utterly unconvincing protests to the contrary in
Fitchburg:

David Enstad, general manager of Unified
Newspaper Group, said such worries are misplaced.

“It was understood from the get-go that we would require
complete editorial independence,”he said. […]

In a draft memo of understanding set to be discussed Feb. 25 by
the City Council, the two parties would agree to meet quarterly and
“review content, costs and supporting sales.” Enstad said he sought
the language simply as a way to make sure both parties remain on
the same page.

Uh-huh.

CJR provides some depressing context about government-journalism
conmingling:

Not long after the Star ceased print
publication, the USC Annenberg School for Communication &
Journalism noted in
a report that public support for print media has a long
history, including postal subsidies, paid public notices, and
federal and state tax breaks related to newspapers and magazines
that totaled nearly $1 billion in 2008. The Newspaper Preservation
Act of 1970 also made joint operating agreements possible by
exempting papers from antitrust rules. In 2009, the state of
Washington even passed a
new $1.3 million tax break to help its struggling newspapers.

The report’s authors urged policymakers to consider new ideas in
that tradition, in response to the declining value of traditional
subsidies and the crisis in the newspaper industry.