The state Capitol in Sacramento on Nov. 17, 2022. Photo by Miguel Gutierrez Jr., CalMatters
The state Capitol in Sacramento.
(Miguel Gutierrez Jr. / CalMatters)
Opinion from Community Voices

Why CJPA’s giveaway to chains won’t solve California’s press woes

In a letter to California lawmakers, Lookout CEO and founder Ken Doctor outlines his opposition to Assembly Bill 886 as the the California Journalism Preservation Act heads to a hearing before state Senate Judiciary Committee.

Editor’s note: The California Journalism Preservation Act, Assembly Bill 886, is a bill that the California Assembly has passed and is now due for a hearing in the state Senate Judiciary Committee. Below, Lookout founder and CEO Ken Doctor expresses the reasons for the opposition to the legislation in a letter to Assemblymember Jesse Gabriel, chair of the Committee on Privacy and Consumer Protection, and Santa Cruz County’s representatives in the California Legislature.

First, as a publisher of a thriving new news company serving all of Santa Cruz County, I deeply appreciate the legislature’s support of local journalism throughout California. And as a longtime nationally recognized “business of news” analyst, employed by Harvard’s Nieman Journalism Lab, Politico and others, I’m proud that California is trying to take a leading role in addressing the proliferation of “news deserts” and “ghost newspapers” in our state and throughout the country.

The California Local News Fellowship, which just now is beginning to match publishers and young journalists throughout the state, is a wonderful advance — and a symbol of the kind of direct support of local news that will make a difference.

Here, though, I write about Assembly Bill 886, the California Journalism Preservation Act.

Though seemingly aimed at further propelling the rejuvenation/reimagining of local news, it would actually be a step backward, and I, along with many of my colleagues working hard to create trustworthy local news organizations able to replace flagging dailies, oppose it.

The act’s language is too imprecise and broad, allowing benefits to accrue to publishers while placing much too little obligation on them to actually increase professionally written local news.

The seeming requirement of publishers to create news is so broad as to allow accounting for much non-local news production: “The bill would require an eligible digital journalism provider to spend at least 70% of funds received pursuant to the act on news journalists employed by the eligible digital journalism provider and maintaining or enhancing the production and distribution of news or information that concerns local, regional, national, or international matters of public interest.”

Further, I believe it would not be difficult for chain publishers .. to reduce staff in one place and expand it, through this bill’s funding, in others.

What’s needed: more high-quality, original content created by local staffs on the ground in their communities. Any law that doesn’t make sure that that result will occur is at best a distraction and at worst a subsidy for the worst kind of misinformation and disinformation that plagues us.

Further, the bill’s formula might work on paper, but it’s hard to see how it can work in practice, betraying a false sense of how the internet economy works.

In short, it would further entrench the national chain companies that have done much to diminish local reporting throughout the state, giving them a longer lifeline. The result, I believe, would be the status quo — or worse. We would not much reward those whose vigorous energy is starting to make a big difference in local coverage, but we would enrich financially driven national chains, who are in the extraction — not the news — business.

While there remain numerous smaller newspaper titles serving their communities well, the landscape of daily newspapering in California is bleak. Alden Global Capital, its profiteering and evisceration of local news staffs documented* (see below) well, owns most of the daily press in California’s two largest regions. In Southern California, it owns once-thriving dailies throughout the region, with the Los Angeles Times (and its owned San Diego Union-Tribune) the only exception. In the Bay Area, the Hearst-owned San Francisco Chronicle stands alone among many of the once-strong mastheads, now subsumed under the San Jose Mercury News and East Bay Times. Both of those assemblages, as well as titles like the Santa Cruz Sentinel, Monterey Herald and more, are owned by Alden. We now see the staffing at those publications cut to a fifth to a tenth of what it was 15 years ago — with more cutting planned.

Gannett, the largest news publisher in the country, with seven dailies in California, recently made national news when it was revealed that The Californian, in Salinas, was now publishing — but without any local reporters and with an editor in Visalia. That’s outrageous, but becoming more commonplace.

While the bill has been proposed by a group of California publishers, it’s a Hail Mary effort, after the federal Journalism Competition and Preservation Act (JCPA) failed in the previous Congress. That bill received heavy lobbying from both the National Association of Broadcasters and the News Media Alliance — both of which are now captive to national financial players that have consolidated much of the once-local media, often through private equity buyouts.

The intent of such legislation, then, of course, is to bolster those incumbents, as they continue to disinvest.

Importantly, the JCPA legislation, and its child here in CJPA, both borrow heavily from similar laws first adopted in Australia. The net result of the laws there, all agree: Rupert Murdoch’s vast newspaper holdings, which have led the climate change denial movement, are clearly the major beneficiaries. Let’s not repeat that mistake in California.

There are commonsense actions that the Legislature can take, and increasing models to borrow from in other states. These include tax incentives for subscribers supporting local news and for local businesses buying local advertising. Further, the ability of local governments to post public notices in digital-only news businesses — with large reach, where the public would actually see and read the notices — would be a great and civic-minded measure.

Such measures would benefit all — both still large and committed legacy news publishers staying on their game and the startups plowing new ground furiously. I look forward to such bills being considered.

Let me sum up: I judge CJPA, well-intentioned “save the press” legislation, through the twin prisms of my long journalistic and news executive career — and as a local publisher planning to expand the Lookout model in other California cities. In both guises, I believe CJPA, despite its intentions, will generate more negative impact than positive:

  • The definition of what needs to be created to qualify for payment by publishers is way too broad. In defining qualifying news as “news read by a Californian,” it would include any manner of national/global content put out by anyone on the internet.
  • The formula for payment with CJPA is flawed, probably unworkable and will accrue benefit most to legacy publishers who used to create a lot of local content, but no longer do. On the surface, the proposed formula of using “links,” in part to determine payment, provides large credit for stories already published, years ago. The bill shows a fundamental lack of understanding of how search engines work, and the credit they receive for long-standing publishing, even to publishers who have cut well back on what they produce. In addition, the use in the formula of “platform advertising revenue” is probably unworkable.

While this act aims at today’s (and yesterday’s) publishing landscape, consider that artificial intelligence and machine learning are already starting to change the nature of publishing. And in the case here, such tech tools can create essentially infinite links. What we need to value is real local news — not links, as their proxy.

  • The newspaper chain recipients of such funding are in survival, lifeboat mode. Four companies that now control 50% of American daily newspaper circulation are all embarked on the same “squeeze out the last profits, and then turn the lights off” business strategy. Some don’t mind being referred to as vultures; others display prettier public plumage, but importantly employ the same wind-it-down tactics. The major losses recently reported by Gannett, which itself controls 25% of circulation, certifies how quickly the final days of the print chains are coming.
  • New revenue streams that might be gained by these companies won’t make a signal difference in the only metric that matters: how many journalists are working to cover local communities. The amounts estimated will not turn around companies that are losing millions of dollars; they will allow these companies only to better their own finances, without sufficient commitment required to increase the supply of local news. In fact, the chains’ ability to take money that will increase their profits — but not their journalism — will be hard to police post passage.

In conclusion, let’s note the wider landscape here. The history of the platforms’ impact on the press — globally and locally — is unmistakable and nuanced. In my work, I have traced the decline of the American daily newspaper as far back as 1955, when it reached its apex in household penetration.

Yes, the platforms’ transformative business models hurt the press, but so had TV, cable TV, changing demographics — and the stubborn resistance of too many newspaper companies to adapt to emerging business realities and more diverse audiences. Prying money loose from these companies to “support the press” might seem like a good headline, but in fact distorts free markets.

Those markets can — and are beginning to — operate well. In Santa Cruz, in Berkeley, in Oakland and in Long Beach, newer entrants have made a significant impact, providing a new generation of local news. Let’s together build a generation of trustworthy local news, supported by readers, local businesses, and the state, with such programs as the Fellows.

Thank you for your consideration.