Nearly three-quarters of U.S. senators are encouraging the Trump administration to boost advertising at local newspapers and broadcast stations as a way of bolstering struggling news outlets.
In Arkansas, to paraphrase Meat Loaf, one out of two ain’t bad.
The state’s senior senator, John Boozman, signed the letter to Russell T. Vought, acting director of the federal Office of Management & Budget. Boozman’s colleague, Sen. Tom Cotton, a political ally of the press-hating Donald J. Trump, didn’t add his name, though the bipartisan letter got support from everyone from Vermont’s Bernie Sanders to South Carolina’s Lindsey Graham.
“Local newspapers and broadcasters have been particularly hit hard financially due to decreased revenue typically derived from advertising sales,” the letter says in a monumental understatement.
The recession after the financial crisis more than a decade ago pushed the nation’s newspapers into deep job cuts, and those jobs didn’t return as the rest of the nation recovered. That pattern is being repeated in the age of COVID-19.
From 2008 to 2018, the newspaper industry lost nearly half of its employees, coinciding with a 68% decline in advertising revenue, according to an analysis by the Brookings Institution.
The financial damage from the pandemic is amplified because ad spending tends to decrease faster than overall business spending in a recession, and job losses from COVID are unprecedented. Local broadcasters benefited from an ad blitz while Michael Bloomberg was in the presidential campaign, but newspapers had no such silver lining. Several Arkansas publications are scrambling for new ideas to weather the storm.
The Arkansas Democrat-Gazette, which switched to Sunday-only print delivery last year as a cost-cutting measure, offered employees voluntary furloughs two weeks ago, saying the Wehco Inc. flagship had to further cut costs as ads vanish. Management had predicted that enhanced unemployment benefits might tempt workers, who could reapply for jobs when the economy improves.
Last week, Democrat-Gazette President Lynn Hamilton wasn’t ready to say how many employees had taken the furloughs, or whether it had approached its cost-cutting goals. “We’re still reviewing our situation and aren’t ready just yet to talk about furloughs or other staffing-related issues,” he told Arkansas Business.
The Log Cabin Democrat in Conway, acquired last year by Paxton Media Group of Paducah, Kentucky, announced a program offering $250,000 worth of matching grants to advertisers.
In effect, businesses are promised twice the bang for their advertising dollar as the Log Cabin’s “grants” double the space for advertisers in the paper’s print edition and special products sections.
The minimum grant will be $200 a month; the maximum $5,000.
“For example, if a business is awarded a grant and spends $200 in advertising, the Log Cabin Democrat will match that with a grant of $200 for a total of $400 in advertising dollars,” the paper said in an article about the program.
Frank Leto, the group publisher who took over the Log Cabin and several nearby Paxton papers last year, said that the grants are “a Paxton Media initiative that all our daily and 3x weeklies in Arkansas are participating in.”
He predicted that newspapers will survive the pandemic, and that “programs like this one that build relationships” will help support the community and preserve local journalism.
As the president has often said, “We’ll see what happens.”
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