The U.S. financial and auto industries received bailouts. Now, the newspaper industry seems to be in such sad shape that politicians are looking to help. To stop the bleeding and salvage what's left of the industry, a Democratic senator introduced his remedy for the sector -- the Newspaper Revitalization Act -- Tuesday allowing newspaper companies to restructure as nonprofits with a variety of tax breaks.
Senator Benjamin Cardin of Maryland says the intention of the proposed legislation is to save local and community newspapers, not media conglomerates such as the New York Times Co. (NYSE:NYT). So far he hasn't received any co-sponsors to his bill.
What would the Newspaper Revitalization Act provide for? The Act would allow advertising and subscription to be tax exempt, and contributions to support the news operation could be tax deductible. Newspapers would also be allowed to operate as nonprofits for educational purposes under the U.S. tax code, like public broadcasting companies.
The legislation seems enticing, especially with the moribund state of the newspapers. Layoffs and newspaper shutdowns have become just as common as breaking stories. For instance, the Houston Chronicle said Tuesday it was laying off 12% of its staff, with 90 in the newsroom; and the hobbling Los Angeles Times is making another round of cuts, this time laying off 50. - Gerald Magpily
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