The Most Dangerous Bailout of All?
We have seen the government aid given to financial institutions come with a lot of excess baggage and political influence (recall Citi’s controversial change of heart regarding their support of mortgage cramdowns). Government interaction in the marketplace has already begun to alter the natural flow and structure of things. But the latest bailout idea may be the most dangerous of all.
A idea being floated in Pennsylvania is to use state funding to prop up two failing newspapers. Philadelphia Media Holdings — the company which owns the Philadelphia Inquirer and the Philadelphia Daily News — is in default on its loans. Reports say their owner went “hat in hand” to PA Governor Ed Rendell looking for help:
Mr. Rendell’s spokesman, Chuck Ardo, plays down the possibility of the state government holding an equity share in the newspaper, but says direct state investment “is possible.”
After PMH owner Brian Tierney sought Gov. Rendell on the availability of economic-development funds from the state, Rendell set up a meeting last fall between Mr. Tierney and the pension funds. According to Tierney, nothing has resulted from their conversations:
The governor said it “never occurred to me that my willingness to help would in any way influence the editorial policy of the papers.”
Critics of such support fear government funding could lead to the media becoming a mouthpiece for the government:
But newspapers aren’t the lifeblood of anything if they are merely an adjunct of the state. Independent journalism is valuable, but only if it is truly independent. A newspaper that is bankrolled by the state, even if it’s only a loan, is going to have a strong interest in not criticizing the state.
Which issue concerns you more: a Philadelphia institution laying off hundreds of employees, or the possibility of compromising an independent media source’s responsibility for questioning and reporting the actions and decisions of the state?
If the state does find a way to support the struggling papers, that would mean taxpayers in Pittsburgh would be forced to support a newspaper from Philadelphia. Is that right?
On the other side of the coin, Columnist Tom Ferrick defends the solution saying “Keep in mind, though, that the nation’s public radio and television stations (e.g. WHYY) do rely on a portion of government funding and private donations to help cover operations.”
Should states consider financially supporting newspapers?
