Public subsidy and charitable endowments are on agenda as papers face toughest battle

Roy Greenslade
4 Feb 2009

It was in 1991 that I first raised in public the possibility that newspapers were likely to lose their audiences. I was editor of the Daily Mirror at the time, and when my views were reported in trade magazine Press Gazette my boss, Robert Maxwell, was outraged. It was a contributory factor in my departure from the paper soon afterwards.

But in the 18 years since then I have been proved correct, though I am unable to say “I told you so” to the late and unlamented Maxwell. Now the gradual decline of newspapers has reached crisis proportions, exacerbated by the rise in internet popularity and intensified by the current economic downturn, a new debate is under way about how to save them.

It starts with two key assumptions. First, that newspapers are so valuable to a democratic society they deserve special treatment to preserve them. Second, that they will die because the current business model is not only broken but also irreparable. Both of these are themselves debatable, of course, and I am not entirely convinced by either contention.

For the sake of exploring the alternatives, however, let's assume that each is correct. One idea to save regional and local papers as a public-service resource is to subsidise them from public funds. In other words, adopt some sort of BBC-style licence fee arrangement. This was floated a couple of months ago by The Guardian's editor, Alan Rusbridger, but it has not won much favour with regional publishers.

Trinity Mirror's chief executive, Sly Bailey, went on the record to reject the proposal. “We don't believe direct subsidies are a safe or sensible way forward,” she said. Despite the difficulties they are facing, companies still retain enough faith in the market, and in their own innovative responses to the crisis, to believe they can pull through.

They are also less than enamoured by the notion of creating another tier of journalism that might adopt the approach of the BBC, which many of them regard as far too liberal in general and too antipathetic to business in particular. There would be many journalists wary of public subsidy too because, whatever arrangements were made to keep it at arm's length from government interference, to give Parliament the power over funding would smack of state involvement.

This argument draws on the popular, if misguided, belief that privately owned newspapers single-handedly won the 200-year battle with the state to secure press freedom in the 19th century. But it is undeniably the case that publishers, in facing up to the prospect of fast-falling profits, are closing local weekly titles and instituting all manner of cuts at regional dailies, including the reduction of publishing frequency or narrowing the range of geographical distribution.

Meanwhile, the BBC is champing at the bit to fill the vacuum, spooking publishers and alarming many journalists who worry about the corporation being the sole provider of local or regional news.

Though the public subsidy proposal has yet to take root, another notion is being floated in the United States, the idea of turning papers into charitable bodies funded by donations from wealthy individuals, foundations and institutions. Papers would therefore be expected to survive on endowments, rather like some American colleges and universities. As quasi-charities, however, papers would have to refrain from all political activity. This would be a no-no for every national title and for a minority of regionals and locals too.

The rest, by sticking to the political neutrality they already adopt, would probably be able to toe that line. Even so, I suspect it would prove problematic, with marginalised political parties and pressure groups contesting the papers' supposed impartiality at every turn.

Anyway, what incentive would there be for “sugar daddies” to fund papers? Could we be certain they would not be tempted to influence editorial content? Incidentally, the only experiment I can recall in which a British paper was funded by public donations was the former Communist Party title, the Morning Star, and that was anything but successful.

So what ideas emerge from publishers themselves? Unsurprisingly, they remain wedded to the capitalist paradigm, and argue for the lifting of restrictions that inhibit further consolidation and cross-media ownership. Meanwhile, as they lobby the Government to relax the rules, they are engaged in all sorts of measures to make such changes into a fait accompli. They are getting together to print each other's papers, form distribution agreements and avoid geographical clashes. An industry previously noted for its competitive spirit is co-operating as never before.

Publishers are also trying to achieve more sensible economies of scale by centralising editorial production. To that end, Trinity Mirror has created a giant multimedia centre in Birmingham to produce three dailies, a Sunday title and some 40 weeklies. Johnston Press has announced plans to centralise the sub-editing and picture desk operations of its five Lancashire divisions in Preston. The company has already set in train a similar move for its titles in the Midlands.

These cost-saving initiatives, combined with investment, are designed to see publishers through this period of economic unrest, and thereby safeguard a business model that proved so profitable throughout the last century. But will they work? If they do not stop the spate of closures, there will be continuing pressure for a new funding model. Despite their obvious defects, we may not have heard the last of subsidies and endowments.