A last-minute $1.4 trillion spending bill signed Friday by President Donald Trump will do more than avoid a government shutdown.

Tucked in Friday’s legislation is a provision that gives critical financial relief to a number of midsized American newspapers, including The Seattle Times, and helps ensure better news coverage for the communities that read them.

Known as the Save the Community Newspaper Act (SCNA), the new law will allow at least a dozen “community” newspapers — defined as publications that are privately owned and which operate mainly within a single state — to defer some of the contributions they make into their employee pension funds.

That relief could help avert more of the layoffs and other cutbacks that have already decimated newspapers over the last decade, said Seattle Times publisher Frank Blethen, who helped lead the lobbying effort behind the bill.

Without the law, the Times “would have been threatened with bankruptcy within a year or two,” Blethen said.

“Chances are we would not be locally owned and independent for very long,” added Times President and CFO Alan Fisco.


The SCNA, which received broad bipartisan support in Congress, won’t reduce the money newspaper employees receive from pensions or the contributions that newspapers must ultimately make to their pensions (many of which have been frozen since the industry’s financial woes mounted in the early 2000s).

But by allowing some publishers to stretch out those contributions over a longer time period, the SCNA will mean significant cost savings for affected newspapers. It’s a rare bit of good news for an industry that has struggled to make ends meet, much less invest in new technologies to compete with Google, Facebook and other digital platforms, said Paul Boyle, a lobbyist for the News Media Alliance, which helped back the legislation.

Newspapers that will benefit under the SCNA include the (Minneapolis) Star Tribune, the Tampa Bay Times, the Albuquerque Journal, the Bangor Daily News, and the Watertown (New York) Daily Times, according to Boyle. The Yakima Herald-Republic and the Walla Walla Union-Bulletin, both of which are owned by The Seattle Times Co., also are affected.

According to a report from the Congressional Joint Committee on Taxation, as many as 17 newspapers could benefit from the law. Blethen said he thinks that number “is conservative.”

Boyle said the newspaper pension crisis intensified in the late 2000s as the Great Recession and a burgeoning digital media sector accelerated the loss of advertising revenue that historically had supported newspapers. Since 2008, revenues from newspaper print advertising have fallen more than 55%, while employment has fallen from 400,000 to 275,000, according to the News Media Alliance. More than 1,800 local newspapers have closed since 2004, according to a report from the University of North Carolina.

Even as ad revenues fell, Fisco said, the recession and a subsequent era of low interest rates meant that the stocks, bonds, and other assets in many company pension plans were no longer large enough to cover projected liabilities. That triggered federal regulations requiring employers to put cash into their pension plans to ensure they could meet minimum funding requirements.


Starting in 2012, Congress passed a series of short-term measures that gave employers temporary relief from higher pension contributions.

But that relief begins to phase out in 2021 and expires completely by 2024, said Kent Mason, an attorney with the Washington, D.C., law firm Davis & Harmon, who worked on those provisions. And while that temporary relief was sufficient for companies in other industries, where revenues have recovered enough to meet increased pension obligations, many newspapers still lack the wherewithal to meet their pension obligations and “were going to go off a cliff in terms of pension contributions” by 2021, said Boyle.

“It’s causing huge problems,” adds Craig Huber, a media equities analyst at Greenwich, Connecticut-based Huber Research. “Given the pressure on their revenues and profits, it’s getting harder and harder when they are legally required to put money into their pensions to close the funding gap.”

Although Fisco said that The Seattle Times has been able to meet its minimum contribution requirements — and that current and future pension payouts won’t be impacted —the newspaper’s contribution was projected to increase nearly fivefold by 2021, to almost $14 million a year.

Several years ago, Blethen and other newspaper publishers began pushing for a legislative fix that would allow newspapers to lower their annual pension contributions in part by stretching out those payments over a longer time period — much like changing the term of a home mortgage from 15 to 30 years reduces the amount of each monthly payment.

Although there was little initial optimism that Congress could be persuaded to act, Blethen said, The Times hired a lobbyist and began drafting legislation.


To garner broad legislative support and avoid controversy, advocates purposely excluded large newspaper chains and publicly traded companies from protection under the proposal.

The strategy paid off. The proposal drew bipartisan support in Congress and was added to a larger package of retirement policy legislation, known as the Secure Act, which passed the House of Representatives by a near-unanimous vote of 417-3 in May.

When the Secure Act stalled in the Senate this fall, it was tucked into the year-end spending bill, which was passed by the House on Tuesday and the Senate on Thursday, before going to the president’s desk.

The new law won’t solve the pension crisis for newspapers. Its narrow criteria excluded many newspapers that are reeling under their pension liabilities — among them, the McClatchy chain, which owns some 30 outlets (and has a 49.5 % stake in the Times), and which has a $535 million pension shortfall and must make a $124 million contribution in 2021, according to McClatchy.

But for newspapers covered under the new law, the legislation will mean more time to replace ad revenue with other revenue sources. At The Times, “this will return us to being minimally cash-flow positive,” said Fisco, adding that without the law, The Times was likely facing “draconian reductions in staff.”

Combined with proceeds from recent property sales, that effectively gives the Times another decade to complete the ongoing shift to new revenue sources, including digital subscriptions and community-funded coverage.

With the new law, Blethen said “we’ve got the runway” to explore “additional things we can do to transform this business model.”