Eagle Times publisher defends state backing
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By HOLLY RAMER The Associated Press - Published: November 12, 2009
CONCORD, N.H. — New Hampshire's decision to guarantee a line of credit to a struggling newspaper in the state is raising questions about independent coverage, but it probably won't be the last such effort.
News industry analysts said Wednesday that a few other states have been exploring similar deals as newspapers across the country face an unprecedented decline in the advertising revenue that fund the bulk of their operations.
No other state, however, has gone through with it, said Rick Edmonds of the Poynter Institute, a journalism think tank in St. Petersburg, Fla.
New Hampshire's Executive Council, which reviews and approves state contracts, agreed without debate last week to guarantee 75 percent of a $250,000 line of credit to the Eagle Times of Claremont. The paper reopened under new ownership last month after declaring bankruptcy in July and closing for three months.
Harry Hartman, publisher of the Eagle Times, said the newspaper has yet to touch the line of credit, given that it has brought in more money than expected since its bank approached the state's Business Finance Authority for a guarantee. He said the newspaper now expects to turn a profit in its first month of operation.
"It has nothing to do with us getting any type of bailout from the state to start this newspaper up," he said. "We came back and revived it with all our own money. The line of credit is just that — a line of credit just in case."
Hartman said the credit guarantee has been blown out of proportion by competitors who "aren't happy we're back in the market," and said any concerns readers have about the newspaper's independence would be ended when it publishes an article Thursday explaining the finances. Hartman outlined the main points in an interview Wednesday.
"I'm hoping that readers understand that we're not beholden to anybody," he said. "No one gets deferential treatment in our newsroom."
Gov. John Lynch, who wasn't available for comment Wednesday, has said the credit guarantee was the right thing to do for economic development. The paper had 66 full-time workers when it closed and about 25 workers now.
In Pennsylvania, Gov. Ed Rendell arranged a meeting in 2008 between the publisher of Philadelphia's two large daily newspapers and the state's largest employee pension funds in hopes of helping the company reduce its debt, but nothing came of it.
In Connecticut, lawmakers, state officials and others tried for weeks to attract potential buyers for two daily newspapers that came close to closing earlier this year, and the state's Department of Economic and Community Development was prepared to offer funding assistance or loan guarantees.
John Sturm, president of the Newspaper Association of America, has said his industry does not want a government handout or subsidy. He told a joint committee of Congress in September that direct financial assistance wouldn't be appropriate, but said newspapers should be allowed to recoup taxes they paid on profits earlier this decade.
There has also been talk of federal subsidies for media outlets, but Edmonds said there has been very little consensus. As a result, he believes states are likely to get more involved.
Stephen Farnsworth, professor of communication at George Mason University in Fairfax, Va., said similar deals are also likely elsewhere because "politicians want to stay in the good graces of the people who cover them."
But he called the New Hampshire guarantee a bad precedent and questioned whether newspapers could cover state government effectively if their very existence depended on the state officials they write about.
"Even if the paper covers government officials critically, readers may still have their doubts about whether they are getting the full story," Farnsworth said.
Beyond ethics, communications professor Len Shyles of Villanova University in Pennsylvania doesn't believe such financing deals address the core problem newspapers face: how to survive when readers get their news online for free.
"I think they will try to seek help wherever they can find it, but right now, we're facing a tremendous amount of layoffs, and that's making news quality suffer," Shyles said. "It's a Band-Aid solution to ask the government for a bailout because ultimately they're going to have to determine a way to generate revenue from digital."
Nonetheless, some subsidies may help newspapers make the transition from paper to Internet, said Jack Lule, a journalism professor at Lehigh University in Bethlehem, Pa. He said the printing and delivery of America's first newspapers were heavily subsidized at the state and federal levels.
"The idea of subsidizing newspapers even though the words come off the tongue almost hesitantly is actually very well accepted in American historical tradition," he said. "We're at a point in our history now where it seems foreign to us but actually we can find a lot of examples of that, and I do believe it's part of our future."
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