Last year, the California Journalism Preservation Act (CJPA), legislation that recognized the important role played by the state’s local news outlets, passed the California Assembly by 55-6. It also cleared the Senate Judiciary Committee and the Senate Appropriations Committee, but never came to a floor vote.
Unfortunately, Big Tech, which would have had to pay publishers for the news content they source and monetize, stood opposed. Their lobbying kept the bill by Assemblymember Buffy Wicks (D-Oakland) from making it to the governor’s desk.
It’s reassuring to know that California’s legislature correctly identified the state’s newspapers as a priority. A new bill, AB-611, has been introduced by Assemblymember Alex Lee (D-Fremont, Newark). The “Keep News Independent Act,” is intended to help publications remain free from ownership by big publicly-traded companies and hedge fund-owned groups that have bought up and shrunk newsrooms throughout the United States.
Lee, who returned our call Monday to discuss AB-611, says it would simply “require disclosure when a paper wants to sell.” A 120-day notice would be given to employees and subscribers. Lee says the law would not apply to sales transactions to a private individual, “so long as they are not a publicly traded company or an investment fund,” and would provide “a modicum of transparency” to communities.
Discouraging what Lee describes as “corporate conglomerates eating up local news” is a very worthy goal, however the legislation could have unintended consequences. Reducing the pool of potential buyers can reduce the equity value of companies. That, in turn, can impact a publisher’s ability to obtain financing from private investors or lenders.
Keeping publications close to communities is a subject close to our hearts. The Tri-City Voice was acquired by the Weeklys Media Group, an owner-operated organization committed to independent journalism, when the former owner needed to retire for health reasons. In the past several years, Weeklys has rescued publications facing certain shutdowns, including The Healdsburg Tribune and the East Bay Express.
Certain provisions of the bill, as currently drafted, would even prohibit purchase by a subsidiary. That would, for example, have doomed the Healdsburg Tribune, which has been published since 1865. The transaction to revive a closed publication was negotiated and executed in less than a week. A pause in publishing would have compromised its status as a legally adjudicated newspaper and made it unsustainable.
Creating a sustainable future for community-based publishers should be a legislative priority. Making media properties less attractive investments overall by complicating exits is not necessarily the best route to that goal.
In this fragile media landscape, testing economic theories in real time could have unanticipated results. While we commend his good intentions, we cannot support Assemblymember Lee’s bill.
We encourage legislators to continue to seek solutions to promoting journalistic sustainability. Independent coverage of government, community groups and business is essential to good governance and an informed citizenry, and it’s worth the time to get this right.
