Opinion: Businesses need newspapers for coronavirus recovery

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Combination of AB 5 and COVID-19 advertising decline has created a ‘perfect storm’ for the state’s news outlets

Local newspapers across California play a vital and indispensable role during the COVID-19 pandemic, providing invaluable information about the virus and its many impacts on our communities, economy, and public healthcare system, and highlighting the myriad efforts to halt its spread.

Through poignant and often painful stories, they put a human face on the tragedy and highlight the courage and bravery of our frontline healthcare and other workers. And they hold accountable the public officials and institutions responsible for leading the COVID response.

Ensuring that our newspaper industry — one of the pillars of our democratic system — survives must be a top priority. As California moves forward on economic recovery plans, Gov. Gavin Newsom and the state Legislature can act on three policies to help sustain community news outlets and, in turn, support business recovery.

First, the Legislature can support economic recovery policies that — like the adage says — lift all boats. The business community needs a resilient foundation that allows companies to thrive, so in the short-term, they need access to state stimulus grants and no- or low-cost loans. This, in turn, will increase their ability to advertise in local newspapers.

Second, the Legislature can ensure that community news outlets are prioritized for the placement of taxpayer-funded public service ad campaigns. Annually, the state spends hundreds of millions of dollars in public outreach and awareness campaigns designed to protect public health, promote social equity, and encourage civic participation.Guaranteeing a large portion of that advertising revenue to community papers would help shore up unstable news operations at a time when businesses need to stay in touch with customers.

Finally, the Legislature needs to amend Assembly Bill 5, the seriously flawed legislation passed last year that has decimated California’s burgeoning gig economy. Millions of freelancers and contract workers, including newspaper carriers, were told they could no longer operate independently. The misguided law has robbed them of the ability to run their own businesses and heaped massive costs on the companies that have been forced under AB 5 to hire them as full-time employees.

AB 5 was suffocating both startups and well-established companies even before the pandemic. Now the economic crisis brought about by COVID is exacerbating the problem.

The combination of AB 5 and COVID-19 has created a “perfect storm” of financial stressors for the state’s news outlets, including an unprecedented decline in advertising revenue, according to an analysis by the California Newspaper Publishers Association. The analysis concluded with an ominous warning of a future with “fewer local journalists, more stress on an already stressed industry leading to more business disruption, and more newspaper layoffs and closures.”

Newspapers were granted a one-year exemption to the “independent contractor” test for newspaper carriers, an appropriate exception for an industry that plays such a unique and powerful role in society. But the extension expires at the end of this year.

Delivery is the highest single functional cost at local newspapers, and newspapers face an average increase of up to 85 percent in distribution costs if the Legislature does not extend its exemption. It’s time to make the exemption permanent for newspapers and re-examine its negative impact on other industries, especially while they are reeling from COVID-19.

As our businesses regain their footing, we need newspapers to continue to serve as the “first informer,” helping us serve our customers and the public in the new post-pandemic normal.

 

 

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