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The Nonprofit Newspaper?


Bill would allow companies to restructure, receive tax breaks.

US Senator Benjamin L. Cardin has a wicked sense of humor - and he's pushing a bad idea that would gut the First Amendment.

The Maryland Democrat is sponsoring a bill that would allow newspaper companies to restructure as nonprofits.

That's a laugh, given the declining fortunes of major publishers such as McClatchy (MNI) and Gannett (GCI). E.W. Scripps (SSP) closed the Rocky Mountain News. Hearst's Seattle Post-Intelligencer cut its print edition and now exists as a website. Hearst may close the San Francisco Chronicle if workers don't agree to drastic cuts. The Tribune Co., publisher of major papers such as the Chicago Tribune and Los Angeles Times, has filed for bankruptcy.

In the current environment, this passes for good news: Platinum Equity bought The San Diego Union-Tribune for an undisclosed sum. But the private equity firm may want the real estate more than the newspaper.

So give Cardin credit for a sense of the macabre.

His bill would allow newspaper companies to be run as nonprofits for educational purposes, giving them tax breaks and allowing them to operate much like public radio and TV.

Here's the kicker: Cardin's bill would graciously allow newspapers to cover the news, but would prohibit them from making political endorsements.

But who needs the First Amendment when you've got tax breaks? Those annoying editorial pages that routinely snipe at politicians would be silenced. Cardin has apparently failed to notice that newspaper endorsements don't carry much weight with voters - but never mind.

Cardin's bill would be a big step toward industrial policy, enabling the government -- not the market -- to determine winners and losers. That would value political connections over little things like a business plan and, ohhhh - public need.

Cardin's proposed deal might be sweet enough to entice some publishers because advertising and subscription revenue would be exempt from taxes, and any "contributions" to support news-gathering activities would be tax deductible. So much for newspapers being the guardian of truth, the public watchdog and all that blather, eh?

Another laugh: Cardin notes that Uncle Sam's tax revenue wouldn't take much of a hit because newspaper profits have plunged. File this under: You can't squeeze blood from a turnip.

Cardin says the bill is intended to save local newspapers, not their big-city brethren, owned by conglomerates that also operate radio and TV stations. Well, that's a relief.

But if the idea is to preserve a diversity of editorial voices, Cardin's bill has it exactly backward; the Cowflop Gazette and other local poopsheets aren't read outside their small circulation area. It's the major papers that break news and keep an eye on, well, government. Can anyone imagine Watergate without The Washington Post (WPO)?

Cardin's bill hasn't attracted any co-sponsors, and with luck, it will go nowhere. But it won't be for lack of effort from Cardin.

"We are losing our newspaper industry," he told Reuters.

Sad, but true.

But where was Cardin when the buggy-whip industry needed him?
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