JCPA: All the News That’s Fit to Buy

In the spring of 2020, most Americans were focused on how to stop the spread of coronavirus, how to stay in business and how to take care of their families. While most of the country was preoccupied with surviving lockdown, one hedge fund was obsessed with a campaign to make more money off journalism.

Heath Freeman is the managing director of vulture hedge fund Alden Global Capital and owner of Digital First Media – the second largest owner of U.S. newspapers, including the Denver Post, Chicago Tribune, St. Paul Pioneer Press, San Jose Mercury News and hundreds of other dailies and weeklies. As the world worried about getting COVID-19, Freeman began laying the groundwork for a coalition of big media companies to extract revenues from tech platforms. He sent an April 2020 letter to other newspaper owners proposing a campaign “to work together” for “properly remunerating the original producers of content.” 

In the letter Freeman laid out the plan to target tech platforms and demand revenues. He even suggested asking Congress to revisit “fair use” and other intellectual property implications. The rationale for targeting tech platforms? Because they have billions of dollars.

Ironically, those “original producers of content” (aka the reporters, photographers, editors, and other news staff) are exactly the people Alden Global has laid off; more than 1,000 jobs at more than 100 newspapers. The hedge fund is infamous for buying up small papers, stripping assets, laying off journalists and reducing coverage and circulation to maximize profits instead of supporting journalism.

Obviously Freeman left out how these predatory practices have driven the decline of local journalism, while big media companies still earn seven-figure salaries and support multimillion dollar stock buybacks. Alden saw an opportunity for a money grab, and they wanted other owners to join with them.

The result of this collaboration and carefully coordinated campaign is the media corporation-backed push to pass Journalism Competition and Preservation Act (JCPA). The JCPA purports to protect local journalism, but its true beneficiaries are hedge funds and big media corporations like Alden Global and Gannett. In reality, the legislation will establish a new, unconstitutional “access right” to news content, accelerate consolidation in the media industry, disincentivize journalist hiring and exacerbate online misinformation.

But the publishing companies’ control of media coverage – and tremendous sway over politicians conscientious of their press coverage – has distorted true discussion and debate of this government handout. For months, newspapers reported on an updated version of the legislation, but the text remained a secret. The revised legislation wasn’t unveiled until days before a Senate markup. 

The publishers’ control of press coverage has also obscured the crass lobbying tactics behind the effort to pass the bill. 

The News Media Alliance is the primary lobbying power behind the bill, but it is funded by the corporations and hedge funds in the business of news. This is not about protecting journalists, but about funding the mega corporations who view publications as assets for profit, not valuable sources of information for local communities. News outlets directed their editorial boards to issue positive coverage and ran JCPA endorsements ads for free. Newspapers owned by the same company have been re-publishing a handful of op-eds to maintain the illusion of wide support. Few outlets have included balanced coverage of the legislation.

Meanwhile, the News Guild, Free Press and other journalist organizations have raised many objections. Chief amongst them are the valid concern that none of the tech payouts will actually go to supporting journalists. Gannett just laid off 400 journalists, cut hundreds of open jobs, mandated unpaid leave and stopped contributing to retirement benefits. After thousands of reporters have been laid off in recent years, publishing companies have already proved they don’t care about journalist jobs. Why should they receive even more money?

Even organizations who have supported tech antitrust efforts oppose the JCPA, including Public Knowledge, Fight for the Future and the Electronic Frontier Foundation. These consumer advocates protest the bill’s impact on access to knowledge, dismantling of the open internet, violations of the First Amendment and entrenched power for the biggest media players.

Local journalism is essential for America’s future. But the JCPA is not the answer; it is merely the product of a concerted campaign backed by hedge funds and big media companies. Unfortunately the media companies won’t admit to the significant problems with the bill and the lobbying that has brought it this far. So it’s critical that policymakers view the JCPA with clear eyes. The Senate and Congress must not move forward on this legislation.