Correcting Senator Klobuchar’s JCPA Myths with the Facts

Myth: The JCPA will benefit small and medium news publishers. “It’s also focused on small and medium news organization. It excludes news organizations owned by foreign governments and publications. With more than 1500 full time employees, which would include the New York Times, the Wall Street Journal and The Washington Post. They are excluded as well as the major national television networks.” – Senator Klobuchar

Fact: The legislation will only benefit Big Media corporations. The JCPA’s primary lobbyists are the biggest media conglomerates – Gannett, Alden Global Capital, Sinclair Broadcast Group and others. Because they own hundreds of newspapers and broadcast stations throughout the country, they will have greater negotiating power, and they can hide behind their local news properties to receive funds. But the Big Media corporations will ultimately control those new sources of revenue. Local news outlets and journalists will not see this money; it will go straight back to Big Media’s coffers.

Myth: Newspapers are suffering because of Big Tech.
“As noted, local news is facing a crisis in the US since 2005. 2,200 local newspapers across America have closed. Local news outlets aren’t closing or reducing their coverage because of a lack of talent or passion for their work for lack, it’s of revenue. Ad revenue for US newspapers plummeted from over 37 billion in 2008 to less than 9 billion in 2020. A recent study by Northwestern University predicted that 1/3 of US newspapers that existed roughly two decades ago will be gone by 2025.” – Senator Klobuchar

Fact: Big Media companies are buying newspapers, minestripping their resources and then shuttering them. Big Media companies view newspapers as financial assets – not as critical sources of information for local communities. Mega corporations like Gannett, Lee Enterprises and Alden Global Capital own a third of all U.S. newspapers. In fact, just 10 of America’s 100 largest daily newspapers are independently owned. Once they acquire local newspapers, Big Media conglomerates layoff staff and institute aggressive cost-cutting measures. Fewer reporters means less coverage, often resulting in falling circulation in local communities. In California, Alden cut the staff of 16 regional papers from 1,000 employees to 150. In Denver, they laid off 75% of the reporters. Newspapers that are no longer profitable are shut down. 

Myth: Local journalists support this legislation, which will benefit them.
“This framework will help to ensure that small and local news publishers and broadcasters will be treated fairly in the marketplace, which in turn will help sustain the work of local journalists. That is why it has the support of 1000s of local papers from around the country. The news media Alliance, the National Association of Broadcasters, National Newspaper Association and the Authors Guild and national nonprofit association of more than 12,000 professional writers including over 3000 journalists.” – Senator Klobuchar

Fact: Big Media companies and other publishers support this legislation, but journalists are concerned that they will never see this money. Newspaper support is distinct from journalist support. The News Guild and 15 NewsGuild local leaders from around the country, representing more than 25,000 journalists, raised grave concerns with the JCPA. Local reporters have criticized the JCPA for giving money to Big Media publishers without any guarantee the funds will go to existing or new journalists, pointing to existing practices at mega chains like Alden Global Capital and Gannett where thousands of jobs have been cut, coverage has decreased and newspapers have been shut down. Instead of investing in journalists and bolstering circulation, media conglomerates have spent money on mergers, stock buybacks, millionaire executives and lobbying for a bailout from tech.

Myth: Newspapers don’t have a seat at the table with the tech industry.
Last February on our Subcommittee we had a hearing on this issue and heard from small newspapers and radio stations who testified about the challenges that their outlets are facing. They testified that they can’t even get the platforms to come to the table to negotiate on price. And that they have been told that they will be punished if they use any other advertising tool.” Senator Klobuchar

Fact: Tech platforms help consumers get more access to information and the news. Many platforms invest in journalism because they understand how important it is for consumers to have access to accurate, high-quality information. Yet ultimately, links to access this content from publishers are a basic, inviolable component of how the internet works. Links cannot be copyrighted, so legally speaking, there is nothing to negotiate for under U.S. law.

Myth: Australia’s bargaining code is funneling revenues to local journalism.
“As you all know, this is not just a problem in the US, but other countries as well. At least one country Australia took similar steps, different structure, different laws to bring Google and Facebook to the negotiating table. It is working. I will note that Google and Facebook did not go under in the land down under the internet did not break. They are still making money, big money. At the same time.” – Senator Klobuchar

Fact: The biggest media companies in Australia are cutting licensing deals with tech platforms, but small publishers continue to struggle. Google and Facebook aren’t actually subject to the bargaining code in Australia, and they have instead chosen to license content from some of the biggest news publishers. Some critics have noted that the largest and most powerful publishers have been well-rewarded by the government in power, raising serious questions about government influence over Australia’s local news. Furthermore, Australian reporters criticized the bargaining code for failing to specify that revenues go toward actually producing journalism.

Myth: The JCPA is a “small” fix that will just help publishers get a seat at the negotiation table.
“[All] we are truly doing is allowing them [news outlets] a seat at the negotiating table that they don’t have. We’re not giving them money. We’re not appropriating. Otherwise, Senator Leahy’s Committee would be involved. We’re simply allowing news organizations to be able to negotiate with the biggest companies the world has ever known.” – Senator Klobuchar

Fact: This is a government-mandated handout to Big Media companies. The must-pay, must-carry requirements will force tech platforms to pay publishers for their content. In a process known as “baseball-style arbitration,” if the sides don’t come to a negotiated agreement on their own, publishers can initiate “final offer” arbitration and an arbitrator will settle the negotiation. In other words, Big Media companies will be able to set the terms of the negotiation and then force tech to pay those terms – all with government sanction.