Judith Davidoff
Weekly newspapers
Several weekly papers cover the largely rural district of Rep. Todd Novak (R-Dodgeville). “The newspapers are very important out here," he says. "They have a big reach.”
Todd Novak became a journalist pretty much by accident.
After doing accounting work at Lands’ End for about five years, Novak, now a Republican state representative, took a job in the printing department at the Dodgeville Chronicle. About two months later, Pat Reilly, the editor and co-publisher, asked Novak if he would cover the Iowa County Board meeting for him. Take good notes, he told Novak, and he would write the story from them. After a few months of Novak taking good notes, Reilly one day told him: “You write it, I’ll help you.” And that, says Novak, is “kind of how I got started.”
Novak would go on to become the paper’s government and assistant editor from 1990 until 2014, when he left to run for the Assembly (Novak has also been mayor of Dodgeville since 2012).
He is now co-author of a proposal, slated for introduction in a week or two, to help local media around the state survive these financially challenging times. Under the bill, small businesses that purchase advertising in local media outlets would be eligible for a 50 percent tax credit; the credit would be capped at $5,000 and expire after five years. Businesses with fewer than 100 full-time employees and less than $10 million in revenue would qualify. The ads would have to be placed with Wisconsin-based newspapers, radio and television stations, and digital news sites.
In an email to legislators seeking co-sponsors, Novak and co-author Sen. Roger Roth (R-Appleton) wrote that local media outlets, like other businesses, have been negatively affected by the COVID-19 pandemic and subsequent workforce challenges. “Community focused family-run businesses, including newspapers and radio stations, are in the same perilous position as many retail, hospitality, and small manufacturers.” The lawmakers called the advertising incentive a “win-win scenario for small businesses that want to advertise, customers and workers, and for local media.”
Novak says things were challenging for media outlets when he was in the business and he can see the impacts of cutbacks in the weeklies that cover his district. “You used to be able to pick up any paper and read about the county board meeting and city council meeting [in detail]. Now you sometimes get a synopsis of the meeting versus [a story on] the meeting itself. When you don’t have the advertising you can’t run those long stories.”
Beth Bennett, executive director of the Wisconsin Newspaper Association, which represents 30 daily newspapers and more than 160 weeklies around the state, is a driving force behind the bill.
“This bill is all about local business and local media,” says Bennett. “The best way for local business to reach its intended audience is through local media. The tax credit created by this legislation will potentially make additional advertising dollars available to enhance that audience messaging. Local advertising, in turn, plays a vital role in sustaining essential local journalism.”
The measure has bipartisan support, with 13 more representatives signing on as co-sponsors, including Sue Conley (D-Janesville), Rep. Travis Tranel (R-Cuba City) and Ron Tusler (R-Harrison), and two more senators, Brad Pffaf (D-Onalaska) and Patrick Testin (R-Stevens Point). Groups supporting the legislation include the Tavern League of Wisconsin, Wisconsin Broadcasters Association, Wisconsin Independent Businesses and Wisconsin Restaurant Association.
The positive response has surprised Novak. “It did gain a lot more support than I thought it would,” he says. “A lot of the people who signed on have a big media presence in the district so I think it shows.”
Novak says that eight weekly newspapers and two dailies cover his district. “I’m very fortunate,” he says. Novak’s district in southwest Wisconsin is largely rural, one of the most “ag-dependent districts in the state.” “The newspapers are very important out here. They have a big reach.” Many of his constituents are older as well. “Older people like to read the paper,” he says. “They don’t like to get their news from the internet. I firmly believe that.”
Novak says the bill still needs to be assessed for its fiscal impact and get assigned to a committee. He hopes for a hearing in January and passage by the spring.
Bennett and Novak say they were waiting to see what would happen to a similar proposal at the federal level — the Local Journalism Sustainability Act — before moving forward with a state tax credit for local media advertisers. That all became clear over the last month or so, when just one of the tax credits included in the Act was tucked into President Biden’s $1.75 trillion Build Back Better social spending package, and it wasn’t the advertising tax credit.
What was included, however, is a substantial payroll tax credit that could provide some serious help — about $1.7 billion — for local media outlets nationwide. Under the bill, local publications would receive a refundable payroll tax credit up to $25,000 for each journalist on staff. After the first year, publications could receive up to $15,000 per local journalist.
Wisconsin Sen. Tammy Baldwin and Rep. Mark Pocan, both Democrats, are supporters.
“As a journalism major, I understand the importance of local newspapers,” Pocan writes in a statement. “There’s no better way to hold power to account than local news.”
Biden’s social spending bill passed the House of Representatives Nov. 19 and is now before the Senate.
Now for some bad news: Alden Global Capital, a hedge fund firm that in recent years has gobbled up and then gutted newsrooms across the country, has set its sights on Lee Enterprises, which owns the Wisconsin State Journal. Because Lee and the Cap Times jointly own Capital Newspapers — which owns several other newspapers in south central Wisconsin — the purchase has the potential to dramatically alter the local media landscape.
Alden announced its interest to purchase Lee for about $141 million in a Nov. 22 letter. “Our interest in Lee is a reaffirmation of our substantial commitment to the newspaper industry and our desire to support local newspapers over the long term,” Alden wrote in the letter.
Those words are largely hollow to anyone who has followed the trajectory of papers purchased in the past by Alden, which has a history of cutting staff and resources in the name of profits. One headline sums up the news about Lee and Alden succinctly: “The vulture is hungry again: Alden Global Capital wants to buy a few hundred more newspapers.” Joshua Benton writes in NiemanLab that Alden is “known far and wide as the news industry’s ever-more-engorged leech, a cost-cutting omnivore that makes every newsroom it touches worse, King Midas in reverse.”
Lee was silent for a few days on Alden’s move, but on Nov. 24 issued a statement that suggested it was not interested in the buyout offer. It said that Lee’s board of directors had “unanimously adopted a limited-duration shareholder rights plan,” effective immediately, “to ensure their shareholders receive fair treatment, full transparency and protection in connection with Alden’s unsolicited proposal to acquire Lee.”
Steve Waldman, co-founder of Report for America, a journalism service program that has advocated for the Local Journalism Sustainability Act, says hedge fund takeovers of local news are neither inevitable nor unstoppable. What’s needed, he writes in Washington Monthly, is stronger antitrust enforcement in the area of media, the adoption of federal tax and regulatory changes to encourage the transfer of chain-owned newspapers to community-ownership, and the strengthening of the business model of newspapers that are struggling to make it on their own. A good first step? Passage of the pending payroll tax credit that would help newsrooms hire and retain journalists. “This will strengthen local news organizations of all shapes and sizes, making them less vulnerable to vultures,” he writes. “The legislation could be a powerful antidote to the sickness spreading within local communities.”
