‘The most ambitious package of local journalism policy’ would require Google, Facebook to compensate Illinois news organizations

The ailing local news industry in Illinois would receive compensation from Big Tech companies and benefit from state tax incentives and a new journalism scholarship program under sweeping legislation introduced in the General Assembly this month.

“It is the most ambitious package of local journalism policy that I’ve seen,” Anna Brugmann, policy director for the nonprofit Rebuild Local News, said of two bills introduced by State Sen. Steve Stadelman, a Democrat who chaired the bipartisan Illinois Local Journalism Task Force.

“Employment in newsrooms has drastically declined,” Stadelman said. “A third of the newspapers in Illinois have closed over the years. Clearly there is a crisis in local journalism.”

The Journalism Preservation Act would require Big Tech companies such as Google and Facebook to compensate news organizations for the content that they share, display or link to on their platforms. The Strengthening Community Media Act offers a broad array of incentives, tax breaks and scholarships intended to repopulate local newsrooms. Included in that bill is a provision that calls for 120 days’ written notice before a local news organization may be sold to an out-of-state company.

Stadelman said the suggested remedies were brainstormed by members of the state’s Local Journalism Task Force, which Illinois Gov. J.B. Pritzker signed into existence in August 2021. (Tim Franklin, director of the Medill Local News Initiative and the John M. Mutz Chair in Local News at Northwestern University, was a task force member.)

Alex Gough, Pritzker’s press secretary, said late last week that it’s too early in this year’s legislative session for the governor to weigh in on the bills.

Illinois is now one of the more than a dozen states that has either passed or is considering legislation to help the local news industry, data from Rebuild Local News shows. At least three cities and the District of Columbia also have taken steps to assist local news. Legislation has been introduced in Congress as well.

According to Medill research, there are now 203 counties in the U.S. that are news deserts with no source of local news, and residents in more than half of the nation’s counties either have no, or very limited, access to reliable local news. The nation is losing an average of more than two newspapers per week.

Stadelman, who spent more than 20 years as a television reporter and anchor in Rockford before being elected to the Senate in 2012, said the lack of reporters attending local meetings and serving as watchdogs presents a problem for democracy.

“When you don’t have a spotlight shining on local government, bad things could happen,” Stadelman said. “I thought state government should look at what could be done to help the bottom line of newsrooms.”

Included in the Strengthening Community Media Act are provisions that:

• Call for state agencies to “direct at least 50% of its total spending on advertising to local news organization publications.”
• Offer news employers a credit against the Personal Property Tax Replacement Income Tax for each qualified journalist hired.
• Offer news employers “a credit against taxes in an amount equal to 50% of the wages paid for up to 150 qualified journalists.”
• Offer eligible small businesses a tax credit “equal to the amount paid by the eligible small business to local newspapers or broadcasters for advertising in the State.”
• Create the Journalism Student Scholarship Program to “award scholarships to students who will work at a local news organization in the State for a period of not less than 2 years.”

“The goal here is to directly target these efforts to incentivize the hiring of journalists at the local level,” Stadelman said. “We want to incentivize companies to put more reporters on the streets, more reporters in the newsrooms.”

Brugmann, whose Rebuild Local News nonprofit advocates for public-policy solutions, praised the proposed legislation for identifying pressing problems, such as the loss of journalists especially in the suburbs and downstate, and taking specific actions to remedy them.

“You’ve got the employee retention/payroll tax credit that looks at how do we incentivize folks to hire local journalists,” she said. “You’ve got what I think is probably one of the most creative pipeline policies that I’ve ever seen, which is offering scholarships to journalism students who commit to serving in a particular area after graduation.”

That last point, she noted, is especially important because “we have a few jobs that a lot of people want, and we have a lot of jobs that no one wants, and a lot of those jobs that no one wants, they tend to be rural, they tend to be at smaller publications. So we need to both support these news outlets and help local journalists maybe not have the student loan debt barrier to going places that need local journalists the most.”

Brugmann also appreciated the requirement that a newspaper give 120 days’ notice before it is sold to an out-of-state company. “When a newspaper might be up for sale, usually we find out after Alden (Global Capital, the hedge-fund owner of many newspapers) already has bought it,” Brugmann said. “So there are lots of really creative policies in this package.”

To Brugmann the proposals of the Strengthening Community Media Act are a higher priority than the efforts to extract money from Big Tech in the Journalism Preservation Act.

But News Media Alliance President and CEO Danielle Coffey, whose organization represents 2,000 news and magazine outlets worldwide, stressed the importance of the Journalism Preservation Act and similar bills in other states and countries that require Google, Facebook and other Big Tech companies to compensate news organizations for their news reporting.

“This is incredibly promising, but more importantly it’s transformative for our industry, and it’s revenue that we’re owed,” Coffey said. “It’s not a subsidy. It demonstrates that our content has value.”

Illinois now joins two other large states, California and New York, in seeking to require Big Tech to compensate local news organizations for their content.

In November, three weeks before Canada’s Online News Act was scheduled to take effect, Google reached an agreement with the Canadian federal government to pay about $100 million per year to news companies in exchange for the right to continue sharing their content online. Meta responded to the Online News Act, which mandated Big Tech payments to news organizations, by pulling news content from Facebook and Instagram.

Coffey noted that Illinois’s news industry is larger than Canada’s.

In 2022, Google signed a deal with six European Union countries, including Germany and France, to pay news publishers for content. Australia subsequently enacted a law, the News Media Bargaining Code, that required Big Tech to compensate newsrooms, with a reported $200 million collected over its first year from Google and Meta. Google’s press office did not respond to an email request for comment.

“These [measures] are going to benefit the geography of the state that passes them,” Coffey said. “It’s admirable that Sen. Stadelman is insuring that Illinois publications are benefiting like other states are across the country and also countries around the world….We need to receive the value of our content. That’s a fundamental cornerstone of our business.”

Stadelman noted that Illinois’s budget talks won’t get serious until April or May, at which point he will get a better sense of his bills’ viability. “Do I expect everything I’ve introduced to pass? Probably not,” the state senator said. “If I can get a couple things that will help the bottom line of newsrooms, I will be satisfied.”