Kevin Leininger: Study suggests the cost of government goes up when the number of newspapers goes down
When The News-Sentinel went mostly digital last October, it became just the latest statistic in a trend that recorded 296 newspaper “exits” between 1996 and 2015 alone. But with The News-Sentinel still available online and the internet awash in news from an ever-expanding number of other sources, does it really matter?
Yes, according to a new study that insists the cost of local government goes up when newspaper watchdogs are on the endangered species list.
“A local newspaper closure . . . could affect public borrowing costs because potential lenders have greater difficulty evaluating the quality of public projects and government officials in charge of those projects,” write Pengjie Gao of the University of Notre Dame and Chang Lee and Dermot Murphy of the University of Illinois-Chicago, who conclude that the cost of government borrowing through the issuance of bonds bonds can rise by as much as 11 basis points (one point equals one hundredth of 1 percent) in the three years following a newspaper closure. Nor, they add, can those added costs be attributed to other factors, such as economic conditions.
“A local newspaper provides an ideal monitoring agent for these revenue-generating projects, as mismanaged projects can be exposed by investigative reporters employed by the local newspaper. When a newspaper closes, this monitoring system also ceases to exist, leading to a greater risk that cash flows generated by these projects will be mismanaged,” the authors concluded.
According to Allen County Auditor Nick Jordan, the county had debt of $63.76 million as of the end of 2017 and its bonds are rated Aa2 or Aa3. In fact, Moody’s upgraded the county’s rating for any future property tax-supported bonds in 2016. The city, meanwhile, had outstanding bond debt of nearly $387 million at the end of 2016, an increase of about $100 million that year. Its bond ratings, which affect the amount of interest paid on debt, were similar to the county’s.
People can and do disagree about the wisdom, morality and necessity of public debt, but I haven’t uncovered any outright financial mismanagement lately by Fort Wayne or Allen County officials. Maybe I’m just a bad reporter; maybe they’re simply doing their jobs honorably and well. Either way, Greater Fort Wayne Inc.’s “confidential and deliberative” study suggesting the community could afford to borrow up to $350 million for various economic development projects such as the downtown arena and Electric Works may never have been made public if I hadn’t reported it in early 2016.
But if the link between media oversight and bond expense is open to debate, the value of newspapers and the challenges they face are not.
According to the Pew Research Center, local newspaper circulation dropped 27 percent between 2003 and 2014, in large part because of competition from the Internet. Newspapers, Pew reports, are cited by adults as the most relied-upon source for news about government and many other issues, and the study by Gao and the others concludes that, “as a consequence, the closure of a local paper creates a local information vacuum . . . a ‘news desert.’ ”
Americans increasingly rely on social media for their news, but I suspect few stop to think about where the best of that news originates: traditional media in general and newspapers in particular. Newspapers led the way in investigative journalism because of tradition and space available but also because they could afford staffs large and experienced enough to ferret out stories the powerful preferred to keep hidden. Today, as shrinking circulations impose a similar fate on the number of newspapers and the size of their staffs, journalism has become less investigative and more reactive. But rewriting press releases, attending news conferences and covering meetings is not journalism; it is stenography.
With newspapers’ traditional subscriptions-plus-ads economic model under duress, the ability to devote increasingly scarce resources to time-consuming, may-or-may-not-pay-off investigative journalism is also eroding. Perhaps, one day, the Internet will develop a financial structure that can support the kind of journalism newspapers once epitomized, but that day is not here yet.
And even if it does finally arrive, technology will have changed journalism in ways my professors at Ball State could never have imagined when they talked about a reporter’s duty to fulfill the public’s “need to know.” With the Internet making it possible to know exactly how many people look at each story and for how long, pressure is inevitably building simply to give the public more of what it wants to know, regardless of importance.
Stories about public finance and bond costs probably wouldn’t get too many clicks, which means there will be fewer of them written even if there are any watchdogs left by then. That may be good business, but the hidden costs of losing newspapers can’t be measured in dollars alone.
This column is the commentary of the writer and does not necessarily reflect the views or opinions of The News-Sentinel. Email Kevin Leininger at firstname.lastname@example.org or call him at 461-8355.