Chaffetz against a newspaper bailout

Rep. Jason Chaffetz, R-Utah, said Tuesday that the sinking newspaper industry needs to fix itself and not look to Congress for any major help to stay afloat.

"Newspapers will only be profitable when they adjust to an ever-changing marketplace," Chaffetz said during a House Judiciary subcommittee hearing about whether the newspaper industry will survive the recession amid competition from the Internet and other media.

Many newspapers nationally — from Denver's Rocky Mountain News to the Seattle Post-Intelligencer and the Christian Science Monitor — have folded or converted into online-only news outlets only as circulation and advertising revenues have dropped. The Deseret News last year eliminated a fifth of its staff amid losses of advertising.

"Like the banks, the newspaper industry is in dire straits. Unlike the banks, the newspaper industry is not seeking a government bailout. I hope this continues to be the case, as I could not support it," Chaffetz said. He added that any such bailout would have constitutional problems related to freedom of the press.

"The newspapers' plight is largely the result of the newspapers' failure to adjust to changes in the marketplace," he said. "The biggest change has been the advent of the Internet," he said, and "news" forms including blogs, streaming video, online versions of newspapers and Twitter.

"Print newspapers must compete with this multitude of online sources for their readers' attention at the very moment that their main revenue source, advertising, is drying up," Chaffetz said. "Why is the advertising drying up? It is moving to more focused media, including cable television and, yes, the Internet."

Chaffetz added, "The loss of this revenue threatens the ability of newspapers to use their strongest weapon, namely, robust news departments full of eager reporters to compete against other, cheaper forms of news gathering."

He noted that House Speaker Nancy Pelosi, D-Calif., had asked the Justice Department to consider changes in the industry, including advertising, that related to whether to allow antitrust exemptions if San Francisco area newspapers seek to merge or pool any operations to survive.

But Chaffetz said Congress "should be wary of granting any new antitrust exemptions." He said the Newspaper Preservation Act already has allowed newspapers for decades to combine operations to save money without fear of antitrust sanctions. The Deseret News and Salt Lake Tribune have used that to merge such operations as ad sales, printing and circulation, while maintaining separate news-gathering operations.