Bill introduced to help ailing newspaper industry

A US senator has introduced legislation aimed at helping ailing US newspapers by giving them tax breaks as non-profit organizations.

"We are losing our newspaper industry," Senator Benjamin Cardin, a Democrat from Maryland, said in introducing the Newspaper Revitalization Act.

"The economy has caused an immediate problem, but the business model for newspapers, based on circulation and advertising revenue, is broken, and that is a real tragedy for communities across the nation and for our democracy.

"It is in the interest of our nation and good governance that we ensure they survive," Cardin said in a statement on Tuesday.

The senator cited the recent closures of two newspapers, Denver's Rocky Mountain News and the Seattle Post-Intelligencer, in introducing the bill and noted that many other publications were threatened.

Cardin said the act would grant newspapers tax-free status as non-profits, an arrangement similar to that enjoyed by public broadcasting outlets, which survive on tax-deductible contributions from listeners.

"Under this arrangement, newspapers would not be allowed to make political endorsements, but would be allowed to freely report on all issues, including political campaigns," he said.

"Advertising and subscription revenue would be tax exempt and contributions to support coverage or operations could be tax deductible," he said.

Cardin's statement said "the measure is targeted to preserve local newspapers serving communities and not large newspaper conglomerates."

"This may not be the optimal choice for some major newspapers or corporate media chains, but it should be an option for many newspapers that are struggling to stay afloat," he said.

Cardin's legislation drew immediate fire from influential media critic Jeff Jarvis who called it "another well-meaning but ultimately dangerous attempt to provide a government rescue for newspapers.

"It's doubtful that taxpayers will want to help bail out newspapers, too," Jarvis wrote on his blog, BuzzMachine.com.

US newspapers have been grappling with a steep drop in print advertising revenue, steadily declining circulation and the migration of readers to free news online.

One of the largest newspaper chains, the Tribune Co., filed for bankruptcy last year and the editors of its flagship Chicago Tribune and Los Angeles Times announced plans on Tuesday to combine their foreign reporting operations.