Newspapers could get nonprofit status
NEW YORK - US Senator Ben Cardin introduced a bill to allow newspapers to operate as nonprofit organizations, following four bankruptcies in the industry in as many months.
Under the proposed bill, advertising and circulation revenue could be claimed as tax exempt, Cardin, a Maryland Democrat, said yesterday in a statement. Newspapers would be barred from making political endorsements.
Los Angeles Times owner Tribune Co., the owner of the Philadelphia Inquirer, and two other publishers have sought bankruptcy protection since December. Hearst Corp. last week halted the print edition of the Seattle Post-Intelligencer after ad revenue plunged.
"The economy has caused an immediate problem, but the business model for newspapers, based on circulation and advertising revenue, is broken," Cardin said in the statement.
The Newspaper Revitalization Act would grant newspapers so-called 501(c)(3) tax status typically reserved for educational entities.
"This is really aimed at community newspapers," or newspapers that may be bought and turned into nonprofits, said Susan Sullam, a spokeswoman for Cardin.
The proposal doesn't apply to radio or other media, she said. The bill was submitted to the Senate Finance Committee and doesn't yet have a hearing date.