Bailout for Newspapers? Not So Fast

Industry Lobby Group Takes Issue With Senate Bill, Proposes Additional Remedies for Ailing Business

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NEW YORK (AdAge.com) -- President Barack Obama seemed to offer newspapers a trace of hope recently when he said he would be "happy to look at" proposals in Congress designed to help the beleaguered industry. But those proposals, such as the Newspaper Revitalization Act, don't seem to be at the top of the industry priorities in Washington.

"The discussion of it is well-intentioned because there is recognition that newspapers serve our democracy," said Paul Boyle, senior VP-public policy at the Newspaper Association of America. "But we are not asking for a specific handout, bailout, financial assistance, what have you."

The Newspaper Revitalization Act, introduced by Sen. Ben Cardin (D-Md.) last March, would allow newspapers to operate as nonprofits and enjoy the tax benefits that come along with that status. Some newspaper publishers and editors dislike the act because papers that accepted the tax breaks for nonprofits would be barred from making political endorsements.

"While understandably applicable to most nonprofits, such restrictions would be the death of the opinion pages of newspapers and very possibly the death of newspapers themselves," the Cape Cod Times argued.

The act wouldn't undo the industry's troubles in any case, according to the newspaper association. "We generally support the concept but feel that it has limited application," Mr. Boyle said. "It would apply to a handful of markets where a newspaper might be for sale and there might be folks within the community who might want to buy it and try to get foundations and civic support around the newspaper. But for the most part newspapers are for-profit businesses."

So the Newspaper Association of America is pursuing efforts that would benefit all kinds of for-profit businesses -- including newspapers. One big goal, for example, is legislation that would let big businesses apply their net operating losses to their taxable income going back five years instead of the current two years. Businesses with revenue under $15 million got that break in the economic stimulus package, but the newspaper association and many others want the provision extended and expanded to larger businesses.

Another big issue, particularly next year, is pension relief. The stock market's decline means companies may need to use cash reserves to meet federal funding minimums for their pension funds, the association said, instead of protecting jobs or investing in business activities.

The newspaper association said members of its board will be on Capitol Hill on Tuesday to talk about both of those issues.

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