‘Interest Groups’ and the News Media

From the Pew Research Center/Project for Excellence in Journalism comes the welcome report that newspaper editors and TV news directors are not eager to be, or to be seen as being, wards of the state.  This wholesome sentiment will not come as a surprise to most people, but it has to be disconcerting to the “media reform” crowd, which has been clamoring for direct government subsidies or tax breaks for the news media.

According to the study, 75 percent of the respondents, drawn from the ranks of members of ASNE and RTDNA, had “serious reservations” about direct subsidies from the government, and approximately half had such concerns about tax credits for news organizations.  (Note: These figures do not indicate how many of the respondents had “reservations,” only those who had “serious reservations.”)

It’s in the matter of non-governmental support, of the sort that issues from “interest groups” or nonprofit organizations, that the picture becomes a little murky.  According to the report, a whopping 78 percent of the respondents had serious concerns about accepting donations from “interest groups that engage in advocacy of some kind,” while a little over half expressed either serious or “some” reservations about funds issuing from nonprofit foundations.

Buts what about those groups, like the investigative news organization ProPublica, that are funded and led by people with extensive, and clearly defined, political profiles?  Is ProPublica an advocacy group or just a nonprofit news group?  The question takes on a practical significance in light of the Pulitzer recently awarded to ProPublica and The New York Times for their collaboration on a piece published in the New York Times Magazine.

As reported here, the founder, chairman, and principal financial backer of ProPublica is billionaire Herbert Sandler.  Since selling his interest in the bank (Golden West Financial) through which he made his fortune, Herbert and his wife, Marion, have become big-time philanthropists, with substantial sums going to “progressive” organizations like the Center for American Progress and Acorn.

Along the way the Sandlers acquired an interest in bankrolling a news organization that would create “journalism in the public interest,” as ProPublica calls itself, and hired Paul Steiger, then the managing editor of the Wall Street Journal, to act as editor-in-chief.

As reported in The New York Times, Steiger, who was then nearing the WSJ’s mandatory retirement age, didn’t know the Sandlers well but regarded them as “civic-minded people who were kind of partial to lefty or progressive causes.”

From its inception in 2008, ProPublica has proclaimed its independence and impartiality — a claim that is undermined by its avowed goal of producing journalism that “shines a light on exploitation of the weak by the strong,” and by the looming presence of Mr. Sandler who, rather than donate his money as a lump sum and walk away, installed himself as chairman and is parceling out his contributions over time.

At a recent conference of the American Bar Association, the general manager of ProPublica who, like Mr. Steiger, was formerly with the Wall Street Journal, defended the organization against criticism of Mr. Sandler’s role by suggesting that ProPublica, like the WSJ, is capable of producing journalism that is independent of the political views of management.  Unfortunately, this is an inapt analogy.  In fact it’s worse than that — it positively undermines the argument it’s meant to buttress.

This, of course, because the reason that the Wall Street Journal, or any commercial news organization, can produce news stories that are not a reflection of the political views of management is because they, like all for-profit organizations, operate on the principle of maximizing returns to the shareholders, rather than as a forum for the expression of management’s political or ideological views.

But contrast this dynamic with the very different operating principle of ProPublica, or any nonprofit enterprise.  As Slate’s Jack Shafer asked at ProPublica’s launch, “What do the Sandlers want for their millions? … How happy will they be if ProPublica gores their sacred Democratic cows?  Or takes the ‘wrong’ position on their pet projects: health, the environment, and civil liberties?”

In fairness, most of the reports produced by ProPublica to date do not suggest an organization that is marching in lockstep with the progressive agenda.  For the most part they are ideologically value free.  But that’s only half the story.  The real issue with a group like ProPublica is not the kind of issues it does cover but the kind it doesn’t.  As Jack Shafer asked, what kind of investigative pieces will ProPublica do — not counting the rare expose that proves the rule — that discomfit progressives?  That will be the true test of its independence from its benefactor, and of its suitability as a partnering organization with mainstream news organizations.

In the meantime, close your eyes and try to imagine the kind of reception that would have come to Paul Steiger and ProPublica if, instead of Mr. Sandler, the group’s founder, chairman, and bankroller had been someone who, politically, was Mr. Sandler’s polar opposite — someone who had supported conservative or libertarian causes and organizations.  How do you think that would have gone down with the J-schools, journalism reviews, and grant-giving foundations?

More on Newspapers and Aggregators

If newspapers ultimately survive, they might owe a debt of gratitude not only to Rupert Murdoch (as Patrick Maines suggested here recently), but also to two brothers who have combined their expertise in economics and the law to analyze the problem and come up with a potential solution.

As I wrote here earlier this month, online aggregators quite possibly could kill off newspapers by pirating the papers’ original news content.   Among the industry watchers who have studied this phenomenon are Daniel Marburger, Ph.D., a professor of economics at Arkansas State University, and his brother David Marburger, Esq., a partner at the Baker Hostetler law firm in Cleveland.   

The brothers have conducted an extensive analysis of both the economic and legal frameworks of the newspaper industry (print and online), and how these frameworks intertwine in the digital age.  In a number of papers and articles, the Marburgers have gone beyond the usual observations in two important ways: (1) They draw a distinction between “pure aggregators” and “parasitic aggregators”; and (2) they suggest a way of closing a loophole in copyright law that would seriously curtail the so-called parasites.

“Pure aggregators,” they say, use only a headline and maybe a sentence from the original news source, and then link back to that source (i.e., a newspaper website).  Pure aggregators are economically good for papers on balance because they drive readers to the newspapers’ websites.

“Parasitic aggregators,” on the other hand, take content from newspaper sites, rewrite it a bit, and then pass it off on their own sites.  These parasitic aggregators are bad because they retain readers rather than drive them to the newspapers’ sites.

In the Marburgers’ longest paper on the economic viability of newspapers, two section titles sum up the problem and its effect: “The federal copyright act allows parasitic aggregators to ‘free-ride’ on others’ substantial journalistic investments”; and “If the law does not change, newspapers continually will diminish their journalistic resources until they can subsist only by underproducing news or until they go out of business.”

The Marburgers’ solution would allow newspapers to seek redress for unfair competition under state statutory or common-law remedies for unjust enrichment – remedies that federal copyright law has in effect precluded since 1976.  They’re not suggesting a new law – just an amendment to Section 301 of the Copyright Act.

In this short space I am oversimplifying the Marburgers’ excellent analysis and recommendations – but I hope I can help draw attention to a thoughtful paper that is worthy of serious consideration and widespread recognition.   

Truth Is No Longer Absolute Libel Defense

By guest blogger ASHLEY MESSENGER, Editorial Counsel to U.S. News & World Report, L.P., Washington, D.C.

The U.S. Court of Appeals for the First Circuit recently ruled in Noonan v. Staples, Inc. that truth is not necessarily a defense to a libel claim.  This is a troubling holding, as libel is generally defined as a false, defamatory statement.  

But Massachusetts has a law that allows a true statement to be the basis of a libel claim if the statement is made with “actual malice,” which the First Circuit interpreted as “ill will.”  The ruling appears to be predicated on the fact that the plaintiff, Alan Noonan, is a “private person” and the statement was not a “matter of public concern.”

It is undisputed that Alan Noonan was fired from Staples for violating the company’s expense policies.  A vice president sent an e-mail to Staples employees stating that Noonan was fired for failure to comply with expense policies and reminding employees of the importance of compliance.  The court allowed his claim to go forward to let a jury decide whether the statements were made with “ill will.”

But if a private person can sue for libel when a true statement is made with ill will, the courts will be flooded with victims of petty gossip and spiteful ex’s.  A cheating spouse, for example, would now have a libel claim if the aggrieved spouse vents to friends about the betrayal with “ill will.”

In addition, there is the policy matter of permitting a person to recover damages when their reputation is damaged with good cause.  If a spouse cheats and that true fact is disclosed, his or her reputation may be damaged, but justifiably damaged.  Do we truly want to permit people to be compensated for their own bad behavior?

Finally, there is a problem with the increasingly false distinction between matters of “public concern” and “private” things.  The value of hearing truthful information is the same reason reporters use anecdotes in newspaper stories.  It makes a situation more real when you can associate a name and specific event to an issue rather than relying on vague assertions of what might or might not have happened.  

In fact, if a reporter had used Noonan’s story as anecdotal evidence of why it is important to comply with company policies, it should have been deemed a matter of public concern.  The correct result, whether it’s a company or a reporter, is that all speakers should be protected by the First Amendment.

This post is adapted from a Media Institute  Perspectives issue paper by Ashley Messenger on this topic.  View the full paper here.

Ashley Messenger is Editorial Counsel to U.S. News & World Report, L.P., and an adjunct faculty member at American University School of Communication in Washington, D.C.  The opinions expressed herein are those of the author, and not of these institutions.

The Threat to Free Speech Is Just Across the Border

Note to American journalists: Step across the border into Canada and you will give up every vestige of your right to free speech and free press. If you write a piece that someone finds offensive or that merely hurts his feelings, you may end up facing trial before one of Canada’s “human rights” tribunals that collectively boast a conviction rate in the range of 100%.

Hard to believe?   Just ask Mark Steyn, widely regarded as one of Canada’s finest journalists.  He recently went on trial before one of these kangaroo courts in British Columbia because a group called the Canadian Islamic Congress didn’t like a book excerpt of his that appeared as an article in Maclean’s magazine. 

The Islamic group claimed that the excerpt from Steyn’s book America Alone engaged in “spreading hatred against Muslims” – despite praise from other journalists such as Rich Lowry, who calls the piece “a sparkling model of the polemical art” and lauds its “profound social analysis.”

No matter.  Before the national Canadian Human Rights Commission and its provincial counterparts, truth is no defense.  And there is no requirement to prove harm.  All you have to do is disagree with the writer’s point of view.  Forget freedom of speech.  Lowry quotes one of the national commission’s principal investigators as saying: “Freedom of speech is an American concept, so I don’t give it any value.”

It is incomprehensible to think that freedom of speech and press have been so thoroughly brutalized within the borders of our northern neighbor.  Equally unbelievable, however, is the fact that the plight of Mark Steyn has been greeted with such a stunning and nearly universal silence by U.S. media.  With a handful of exceptions like Lowry, American journalists have completely ignored this travesty to the north. 

It’s true that Steyn and Lowry both are conservatives – Lowry is editor of National Review  – but I don’t want to say the deafening silence is driven by ideology.  (One of the few other Americans to break the silence, for example, is New York Times reporter Adam Liptak, writing in the International Herald Tribune.)  I think it’s a matter of journalistic indifference to something that’s not happening here.

Yes, it’s a Canadian matter.  But threats to free speech and free press transcend borders.  Especially when the threat is this serious, and the border this close.  That makes it our matter, too. 

Final note to American journalists:  WAKE UP!!