How to restore trust in the media: Abernathy’s testimony to the Knight Commission

photo of panel
Left to right: Penelope Abernathy, Jim Brown, Michael Cormack, Jr., and Dana Coester (Photo by Nancy Watzman)

How can we revive and restore trust in the media? University of North Carolina Knight Chair in Journalism and Digital Media Economics Penelope Muse Abernathy outlined how to help save local news operations in her testimony to the Knight Commission on Trust, Media and Democracy in Nashville, Tennessee on April 27.
Over the course of a decade, Abernathy has worked with local news organizations to document the rise of news deserts across vast swaths of this country and pinpoint solutions. The Knight Commission, which is co-sponsored by the Aspen Institute Communications and Society Program and the John S. and James L. Knight Foundation, is examining the drivers and implications of a collapse in trust in democratic institutions, specifically related to media and journalism. Abernathy’s testimony is below; for more information about the event, please visit the project’s homepage.

Reviving and restoring trust in media starts at the local level.  My research at UNC over the past decade has focused on two overlapping areas: documenting areas of this country at risk of becoming news deserts, and researching sustainable business strategies for local news organizations so they can continue to provide us with news that educates and informs as citizens in a democracy.

There’s been much focus in recent years on the economic challenges confronting our national and regional papers, and justifiably so – even though residents of urban areas often have several news options.  But if you are a resident in one of the thousands of small and mid-sized communities that dot this vast country, the local newspaper is still the prime, if not sole, source of credible and comprehensive news and information that affects the quality of your daily life.

What is a news desert? In our initial report in 2016, we defined a news desert as a community without a newspaper.  As our report noted, there are many fewer newspapers, readers and owners than we had just a little over a decade ago.  Since 2004, we’ve lost almost 2,000 newspapers – 60 some dailies and more than 1,800 weeklies. This leaves only 7,000 papers, the vast majority under 15,000 circulation and located in small and mid-sized communities. Many of the communities that have lost newspapers are rural and struggling economically.  However, increasingly, affluent and well-educated communities are losing their papers. For example, last year, Chapel Hill, home of UNC, lost its storied 100-year-old paper, whose editor had been immortalized in the cartoon “Shoe.”

Complicating matters, since 2010, large investment entities, such as hedge funds and private equity firms, have swooped in to purchase hundreds of the remaining 7,000 dailies and weeklies at rock bottom prices.  They then employ a standard formula for managing their newspapers – aggressive cost cutting and financial restructuring, including bankruptcy – that erodes the quality and quantity of local news. Many of these papers have become ghosts of their former selves, both in terms of the quality and quantity of their editorial content and the reach of their readership in the print and digital realms. Therefore, in our latest report, which will be published next month, we’re defining a news desert as “a community, either rural or urban, with limited access to the sort of credible and comprehensive news and information that feeds democracy at the grassroots level.”

The fate of communities and local news organizations are intrinsically linked, journalistically and economically.  From our very beginnings as a nation, newspapers have played a vital role in both educating us and building community.  We need to make sure that whatever replaces the 20th century version of local newspapers serves the same educational and community-building functions.  Researchers in disciplines such as political science, sociology and economics have identified three ways newspapers historically built a sense of community and trust in grassroots democracy. Each is under economic assault.

Newspapers have helped set the agenda for debate of important public policy issues, and, as a result, influenced the course of history.

They accomplished this journalistically through the stories they published, the extended coverage they provided certain topics, and their editorials that recommended specific actions. Today, there are 40 to 50 percent fewer newspaper journalists than in 2008, resulting in a decrease in quality and quantity of public service journalism.  Often, no reporter shows up at routine town council meetings, nor do the gainfully employed journalists at many newspapers receive the time or encouragement to produce long analytical pieces that illuminate and inform.  As a result, Facebook becomes the default medium for sharing “local news.”

Strong local newspapers have built community by encouraging regional economic growth and development.

Through advertising, newspapers have helped local businesses connect with local consumers.  However, print newspaper advertising, which has historically furnished 75 to 90 percent of total revenue, is at an all-time low, and continues to decline.  Making matters worse, as much as 80 percent of the digital dollars in even the smallest markets goes into the pockets of Facebook and Google, leaving all other media outlets (radio, television, online and print) to fight over the remaining 20 percent.

Strong community newspapers have encouraged social cohesion and political activism.

Just as all politics is local, all news that matters is ultimately local. Readers of local newspapers are residents not only of a county, but also of a region, a state and a nation.  Strong news organizations put into local context issues that may seem to be national or regional ones, such as healthcare, gun control, or the opioid crisis. In his recent book, Democracy’s Detectives, Stanford economist Jay Hamilton attached a price tag to the lives saved and environmental disasters averted through investigative journalism produced by news organizations large and small.  But that sort of journalism requires the financial wherewithal to withstand the legal challenges that arise when a local news organization has to sue to obtain public records, for example.  As profit margins have declined from double to single digits, many publishers now think twice before giving the go-ahead on potentially controversial and time-consuming investigations.

Trust and credibility suffer as local news media are lost or diminished. If we can figure out how to craft and implement sustainable news business models in our smallest, poorest markets, we can then empower journalistic entrepreneurs to revive and restore trust in media from the grassroots level up, in whatever form – print, broadcast or digital.

Briefly, here are four lessons we’ve learned from a decade of studying and advising dozens of local news operations:

  • Successful business models will be directly tied to the needs of each individual community. Our research at UNC has found that strong local newspapers typically enjoy significant loyalty from both current readers and advertisers – at rates as much as twice that of our national and regional papers.  But, advertisers follow audiences, so news organizations need to follow the technology and follow their customers if they are going to follow the money.
  • Instead of one business model that works for most news organizations, as has historically been the case, we will have many. Business models that work for large national and regional news organizations may not work in small and mid-sized markets.
  • Smaller news organizations have less room for error. With profit margins in the single digits, a bad quarter can force a sale or bankruptcy. Therefore, small news outlets must be very disciplined about prioritizing cost cutting, as well as investment.  Our latest research focuses on how local news organizations can identify and fully utilize their human, as well as their financial, capital.
  • Finally, news organizations that succeed are forward-looking and invest for the long-term. Both start-up and legacy news operations need to have a strategy in place for transforming at least a third of their business model every five years. They need to develop five-year financial goals (for costs, revenue, and profitability) and then work backwards to build a business plan – identifying and prioritizing endeavors most likely to lead to long-term profitability and sustainability. For the most part, local news outlets that have pursued integrated business plans and disciplined strategies based on the specific needs of their communities have begun to reap the fruits of their digital investments.

But there are many forces that remain beyond the control of individual publishers, editors and founders of local news organizations – especially those in communities that are struggling economically, where the loss of a major employer or advertiser, for example, can tip the balance. This is where I would encourage the Knight Commission to focus its efforts.

In the final section of our 2016 report, we teed up a range of potential solutions – including encouraging partnerships among and between news organizations and institutions, funding civic engagement and journalistic coverage of the “flyover regions” of the country that are in danger of becoming news deserts, and updating government policies and regulations to reflect digital realities and encourage news competition.

Through their journalism, strong local news organizations have the ability to not only educate us as citizens, but also show us how we’re related to people we may not know we’re related to. In an age of economic and technological disruption, the fate of thousands of communities in this country is at stake. We need a collaborative effort – journalists, local activists and residents, educators, business leaders, media owners, nonprofit groups, regulators and legal experts—to face the many challenges. It will take, literally, a community of individuals and institutions working together to nurture the sort of strong local journalism that revives trust in our local media, engenders strong attachment to our communities, and feeds our democracy at the grassroots level.