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GAO Report Considers Ways to Maintain Local News

S.J. Steinhardt
Published Date:
Jan 6, 2023

Noting the decline in local news media, the Government Accountability Office (GAO) released a report that suggested policies to help news outlets adapt to digitization and to preserve public interest journalism.

The GAO undertook this study in response to changes in the digital landscape for local news media in the past two decades.

“More than 2,000 local newspapers have closed since the early 2000s. Many more have substantially cut their operations,” the report states. “While broadcast and digital media have partially filled the gap, the overall decline in local news, and public interest journalism in particular, concerns many policymakers and others. Public interest journalism covers key issues of public significance, such as education and public safety, and can help keep citizens engaged and hold government officials accountable.”

The report considered a number of options for government and others to consider. They included tax incentives to support nonprofit news organizations, direct government funding for public broadcasting, and other direct funding. Other options presented in the report as current models used to adapt to the current environment included diversification of revenue sources, such as by offering membership or receiving donations; converting from private firms to cooperatives or community-based organizations or nonprofit organizations; or taking advantage of existing tax incentives.

“The nonprofit model, financed by a combination of federal funding and philanthropy, could be a viable strategy for targeting low-income communities that find paid access to news restrictive,” the report read. “Further, media outlets are engaging in strategic partnerships to facilitate growth or to share resources.”

Some organizations have already implemented various models in which a nonprofit and for-profit are blended, Accounting Today reported. Two examples are the nonprofit Lenfest Institute’s ownership of the Philadelphia Inquirer and the Poynter Institute’s ownership of the Times Publishing Company, publisher of the Tampa Bay Times. In an example of another model, the Chicago public radio station WBEZ merged with the nonprofit Chicago Sun-Times newspaper.

The proposed Saving Local News Act of 2021 would include the publication of written news articles, electronic or otherwise, as tax exempt under the Internal Revenue Code. Most nonprofit newspapers are currently tax-exempt as educational or religious organizations, Accounting Today reported.

In preparing the report, the GAO conducted a literature review and interviewed agency officials, academics, representatives of media and technology companies, industry groups, and a think tank, as well as other stakeholders. It also convened a two-day workshop in February 2022 with 40 participants from a variety of backgrounds and expertise.