Local newspaper owners emerge, with lifeline possible

Newspapers are still struggling to survive and provide coverage essential to voters and democracy.

But there are hopeful signs and local owners emerging to save and revive their community papers.

One is that Congress is strengthening a key bill to sustain the local news industry.

A revised version of the Journalism Competition and Preservation Act (JCPA) surfaced on April 5, signaling that Sen. Amy Klobuchar, D-Minn., is pushing ahead with the bipartisan bill she introduced last year.

Another is a flurry of recent newspaper acquisitions in Iowa, where several local publishing families acquired small papers from a shrinking chain.

Rather than let the papers close, as more than 2,000 did over the last 15 years, local owners saw needs and opportunity.

“I have a long time before I have these properties paid off, so I’m really hoping and betting on the future of local eyeballs,” said Christopher Hall, a third-generation publisher in Charles City, Iowa.

Hall’s family this month bought a group of Iowa papers from Rust Communications, a Missouri media company divesting assets in several states.

This could be a harbinger. I’m predicting a wave of investment will revive local papers, especially in small towns, if Congress agrees on the JCPA and another measure to help save the industry.

The Local Journalism Sustainability Act would provide temporary tax credits to news outlets hiring and retaining journalists. Households could also get credits for news subscriptions, as would small businesses advertising locally. The idea is to provide immediate, short-term support to prevent further job losses.

Longer-term, sustained support would come from the JCPA. It would give local outlets a better chance to compete in an online marketplace skewed by what state and federal regulators say are unfair business practices by Google and Facebook.

The JCPA would allow news outlets to collectively negotiate with digital platforms that profit from local news content without fairly compensating publishers. The largest newspapers have leverage to make such deals. Smaller ones don’t and need to work together, like farm co-ops, to negotiate.

A similar policy in Australia helped an association of small, rural newspapers negotiate recurring payments. That’s believed to be worth around 30% of their newsroom costs.

This is only fair. It would also provide security local publishers need to invest in depleted newsrooms and in technology needed to evolve and survive.

The Iowa deals hint at other benefits, if platforms start paying for what’s in effect their overdue subscription to local news content. That would incent new local owners starting or saving local news outlets, especially if content deals make them easier to finance.

“If something like that were to happen it would definitely be a game changer for every newsroom, not only in our markets but in small town USA,” Hall said. “We’re 100% behind a paywall and have been for a long time but that doesn’t stop other media from taking a lot of our content.”

The Halls’ acquisitions were a multipart deal helped by outside support.

After acquiring the Rust papers, the Halls sold two to the family publishing The Storm Lake Times, the feisty paper helmed by Pulitzer Prize-winning editor Art Cullen and profiled in a documentary last year.

John Tu, a billionaire immigrant in California who co-founded Kingston Technology and deeply believes in democracy and the American dream, was moved by the film. He made a large donation to sustain the paper, the amount of which wasn’t disclosed.

Tu’s gift and others go to a foundation, which in turn makes grants to the for-profit newspaper. This was modeled on an approach developed by The Seattle Times and The Philadelphia Inquirer.

That lifeline gave the Cullens security to buy their local competitor, the Pilot-Tribune. They’ll be merged into the twice-weekly Storm Lake Times Pilot, with the Cullens offering all staffers jobs at the same or better pay and pledging “a stronger news report with more advertising and pages.”

On their own, both Storm Lake papers were on the verge of failure.

“We had 3,000 paid (subscribers), and they had 720 so they were nearly dead and we were hemorrhaging badly,” Art Cullen told me. “There could have been a news desert here within a year. We were about to go down during the pandemic were it not for these donations. It’s clear for me now the Pilot-Tribune wouldn’t have lasted another year.”

The Cullens also acquired the twice-weekly Cherokee Chronicle Times, 22 miles away, through the deal.

“Our real goal is to return Cherokee somehow to local ownership,” Art Cullen said. “These communities need to take stock in themselves … everywhere you look where there’s a successful incumbent paper, it’s locally owned, or independently owned I should say.”

A recent surge of philanthropic support is giving Cullen some hope, but otherwise it’s tough going.

“I think all newspapers are having tremendous cash-flow problems, most community and regional newspapers are just in a tailspin,” he said.

Yet Cullen still needs convincing that JCPA would help papers like The Storm Lake Times Pilot.

Influential Iowa Sen. Chuck Grassley, who made a cameo appearance in the “Storm Lake” film, may also need convincing.

Grassley hasn’t yet joined fellow Republicans, including Sens. John Kennedy and Lindsey Graham, in co-sponsoring the bill. But spokesman Taylor Foy told me that doesn’t necessarily mean he’s opposed.

Recent investments in Iowa papers show what’s possible with a little help.

That needs to happen across the heartland and the nation, and it will if Congress gives America’s local newspapers a fighting chance.