Apr 14, 2020 - Economy

Scoop: Congress' local news bailout push

Illustration: Sarah Grillo/Axios

A bipartisan group of lawmakers is circulating a draft letter to be sent to the White House requesting additional relief targeted specifically at local newsrooms, according to a draft of the letter obtained by Axios.

Why it matters: Local news was already facing dire strains in the U.S., but the coronavirus and a pending recession have pushed the industry into near collapse at a time when people need access to news and information more than ever.

  • The $2 trillion rescue package passed by Congress last month covers small businesses, including some news companies, but advocates argue it's not enough to cover the long-lasting damages coronavirus will have on local news.
  • Newsrooms are officially considered "essential services" by the federal government and many state governments, but some argue they won't be able to survive without additional financial support.
  • Dozens of local and national newsrooms have begun instituting pay cuts, layoffs or have ceased publication altogether in response to the hit the advertising market has taken since the pandemic surged.

Driving the news: Reps. Debbie Dingell (D-Mich.), Bill Flores (R-Texas), Fred Upton (R-Mich.) and Marc Veasey (D-Texas) are seeking support for a letter to President Trump that calls for federal advertising dollars to be prioritized to local outlets.

The letter asks Trump to:

  • Direct Cabinet secretaries to speed up planned advertising campaigns to local media outlets.
  • Direct federal agency advertising dollars for new and existing programs to local media.
  • Incentivize a portion of the coronavirus stimulus funds that are going to businesses be used for advertising on local media.

What they're saying: “We believe that executive branch agencies have a powerful opportunity to support local media and promote public awareness by directing that federal spending on advertising be prioritized for local media outlets," per the letter.

  • “Specifically, we encourage federal agencies to put into action today already funded campaigns to achieve certain public objectives as well as potential promotions of the economic stimulus programs provided for by the CARES Act and other recent legislation.”

The House's efforts follow calls from nearly two dozen senators last week, led by Connecticut Sen. Richard Blumenthal, to provide relief for local newsrooms in any future COVID-19 relief package.

  • All of the letter's 19 Senate signatories were either Democrats and Independents.

Between the lines: None of these efforts fully address the needs and asks of the news industry.

  • On Thursday, some of the biggest media trade groups, representing thousands of publishers and broadcasters, asked Congress to provide extensive relief to local news outlets in its next stimulus bill.
  • Part of their requests included ensuring that local media can seek relief under the Paycheck Protection Program, a federal backstop to help small businesses impacted by the coronavirus. This request has not been mentioned in any of the efforts from Congress.
  • Some TV and radio station groups, like Gray Television, have struggled to take advantage of the existing funding, because their size is being calculated on their larger holding group, not the sizes of struggling newsrooms at the local level.

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