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3 J. Legal Analysis 1 (2011)

handle is hein.journals/jlegan3 and id is 1 raw text is: SUBSIDI7ING THE PRESS
David M. Schizerl
Through beat reporting and investigative journalism, reporters monitor the foun-
dational institutions of our society. This reporting has value even to those who
never buy a newspaper or read a website. For example, subscribers and nonsub-
scribers alike benefit when government officials respond to a critical news story
by eliminating an abusive practice. Yet unfortunately, the professional press is
experiencing a severe economic crisis. Layoffs are pervasive, and news organiza-
tions across the nation are on the brink of insolvency. As a result, a number of
commentators have proposed government subsidies for the press. Yet if the
press becomes financially dependent on the government, would they be deterred
from monitoring and criticizing the government? If so, the subsidy would undercut
some of the social benefits it is meant to preserve.
In response to this conundrum, this Article proposes a three-part analytical frame-
work for evaluating press subsidies. The first step is to assess how effectively the
subsidy safeguards press independence. The second criterion, which this Article
calls focus, gauges how effectively a subsidy channels resources to externality-
generating activities, as opposed to other uses. For example, a subsidy that induces
press organizations to hire more reporters is superior to one that can be used,
instead, to fund pay raises for the advertising staff. The third criterion is political fea-
sibility. How likely is a subsidy to attract political support? And how much political
support does it need? One that can be implemented under current law, for example,
requires less political support than one that depends on broad new legislation.
Based on this framework, the principal recommendation of this Article is for news
organizations to make greater use of the nonprofit form. By providing a subsidy
through the charitable deduction, we would not empower the government to
choose how much funding to allocate to each news organization. Instead, the
charitable deduction allows the government to piggyback on the judgments of pri-
vate donors about which nonprofits to support. In addition, this subsidy is feasible
politically since it already can be used, to a significant extent, under current law.
1  Dean and the Lucy G. Moses Professor of Law, Columbia Law School. Copyright David M.
Schizer. 2011. All Rights Reserved. I am grateful for comments received from Joe Bankman,
Lynn Beller, Vincent Blasi, Erin Dickerson, Michael Graetz, Nicholas Lemann, Thomas Mer-
rill, Henry Monaghan, Alex Raskonikov, Robert Sack, David Stone, Eva Subotnik, and Tim-
othy Wu, as well as from workshop participants at Columbia Law School, Harvard Law
School, the Tax Club, the Jewish Theological Seminary and the New York Inns of Court.

Spring 2011: Volume 3, Number 1 - Journal of Legal Analysis - 1

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