Bailout plan for newspaper industry

Thursday, October 2, 2008

By: Callie McBroom

Many journalists are now expressing concern about how the banking crisis will affect the already-struggling newspaper industry.

As Inksniffer puts it, this is a time when "a highly leveraged company with high debts secured against an asset that is small and/or diminishing in value and which is paying steep interest rates on loans, has no prospect of getting out of them because they can't refinance." This situation describes the state of many newspapers in the country even before the crisis hit.
Which, then, brings up an interesting point. If the government has an interest in saving banks for the greater good of its citizens, shouldn't it also be interested in saving the newspapers in the country? Should there be a plan to bailout the newspaper industry?

Newspapers could soon be going out of business at a much higher rate than banks have been recently. Not to mention that a very small number of newspaper companies have and continue to buy out numerous smaller operations.

Just like banks recently, healthy companies have been able to buy newspapers at an increasing rate because it's easy to buy a company that has financial problems. Consolidation over the last 25 years or so has led to falling numbers of independent dailies. Slate says these numbers fell from 1,300 to 700. This is alarming to many people for many different reasons.

I realize that many people would prefer to not have the government involved in the process of newsgathering. However, that may be the lesser of two evils if it means keeping newspapers around to gather news in the first place. Just something to think about.


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