MSM trying to solidify and reinvent online footprint via not-for-profit vehicles

Earlier today, I heard what seemed to be an odd announcement on my local NBC TV station. They said that they are looking to partner with an eligible not-for-profit organization in order to enhance their ability to report on items of local interest.

Hmmm; how surprising that the Comcast agenda is being activated sooner than anticipated. I refreshed my memory by looking at their original proposal to the FCC found here:

Then I googled the topic and found the following from 5/23/2011:

When regulators gave the green light to the Comcast-NBC deal earlier this year, the two companies made a commitment to collaborate with local non-profit news organizations. The idea stemmed from KNSD’s relationship with Voice of San Diego, and today NBC announced it’s opening the application process to find at least four more non-profit partners in markets with NBC owned-and-operated stations.

Through the arrangement, local NBC stations gain access to editorial diversity and new sources of content. The non-profits gain exposure, and both organizations cross-promote each other.

You can read the entire article here.

Well, all of the things stated above appear to be true (perhaps - but I'll get to that later) but it occurred to me that for all the altruistic intent being promulgated here, it's awfully convenient that they didn't mention that by using non-profit vehicles as partners (referred to by Comcast as "Online News Partners" under "Cooperative Arrangments" - meaning no common ownership), Comcast/NBC-Universal might be reaping substantial tax benefits due to deductibility of "donations" made to said entities.

Now, I'm not an accountant nor do I profess to understand the intricacies of what is considered an eligible corporate donation but it would appear that a private company can, in fact, provide a donation to an eligible non-profit organization as long as the intent is to contribute toward the non-profit's overall agenda (including administrative expenses, salaries for additional employees, etc.). With this in mind, I was curious as to how the IRS would categorize the deductibility of donations made to media-based non-profit orgs and a quick search of the IRS website led me to the online version of IRS Publication 78, which includes a listing of eligible orgs. I entered the term "news" into the search engine and found that most fall into one of the two following categories:

Deductibility Code

Publication 78 uses a coding system to identify each organization listed by type and limitation on deductibility of charitable contributions to the organization. The code(s) displayed depend(s) on the code for which the organization qualifies. In cases where an organization has multiple deductibility codes, only the definition for each applicable deductibility code is displayed.

Designation "-" (None) = A public charity with a 50% deductibility limitation.
Designation "4" = A private foundation, generally with a 30% deductibility limitation.

As a side note, I searched for all three outlets specifically mentioned in the 5/23/2011 article and found that two of the three, Voice of San Diego and Texas Tribune, were designated in the 50% deductibility bracket. I couldn't find the third, Bay Citizen, listed in the database.

So, even if Comcast/NBC were to donate $1 million to partner or "set up a cooperative arrangement" with various outside non-profit news organizations (an arbitrarily selected number since I have no idea of the operating or expansion expenses involved), they stand to gain a tax benefit of anywhere between $300,000 - $500,000 for each of these Online News Partners. If we estimate five such partnerships during year one (as outlined in the Comcast proposal to the FCC), we're looking at tax deductions of anywhere from $1.5 - $2.5 million. A relatively insignificant amount for a company that realized a net profit of $2.3 billion at year-end 2010 as cited here; however, when you consider that NBC Universal's year-end profits have consistently dropped every year for the last six years, the desperation of the situation becomes apparent. To what can we attribute such a consistent decrease in revenue? There's really only one answer that I can conceive; most or a substantially significant amount of people have, evidently, lost interest and/or trust in the MSM and have simply stopped watching. Less viewership = less advertising revenue = less profit, etc.

I took it a step further and tried to find some data to support this hypothesis and came upon this recent article from the LA Times, which states:

According to a major new study of how Americans use news media by the thoughtful folks over at the Pew Research Center, those newspaper readers have now been surpassed among news consumers.

For the first time in history, a larger percentage of Americans (46%) get their news online than get their news on that paper stuff that leaves their fingers ink-smudged (40%).

Only local television news (50%) still surpasses online as a source of news for Americans. And its lead is shrinking.

So what can be gleaned from all of this? Well, here's my own summation and I invite anyone else to post their thoughts as well:

a) The MSM realizes that there has been and will continue to be a shift to internet based news;

b) they are focusing on establishing web-based strategic partnerships or "cooperatives" in order to maintain their stranglehold on dwindling viewer and readership,

c) although they gush erroneous altruistic intentions at every turn, their financial advisors have found yet another way to reduce their tax burden by setting up these cooperative arrangements with non-profit organizations (although it's been reported that General Electric, *former parent company of NBC-Universal, didn't pay any taxes at all for 2010), and lastly

d) in my personal opinion, all the spewed hyperbole such as "Through the arrangement, local NBC stations gain access to editorial diversity and new sources of content. The non-profits gain exposure, and both organizations cross-promote each other." is just a crock of #### and we will not see the NBC logo prominently highlighted on any of these sites. People have generally stopped trusting the MSM, thus the failure of the local news websites already up and running for years now. It will be interesting to see if/how they try to hide their partnership with these new resources.

On a finally note, a quick perusal of the Voice of San Diego's website shows no logo or hint of affiliation with NBC or the local NBC affiliate; somewhat telltale considering they've had this "cooperative arrangement" for several years now...

Thanks for reading !

Timidgal

NOTE: The Voice of San Diego link doesn't always work. If you can't link automatically, the URL is www.voiceofsandiego.org...

great thread,,, don't be discouraged by lack of replies,,,,,,,, sometimes threads are self explanatory and rerquire no replies, even though many read it


seems to ,,, they will get free stories,,,, free production costs and basically,,, someone else will do all the work and they benefit . a win for them all around

also,, i think they have neither the time or talent to get "local" which they may think will be there saving grace...
large stories/headlines are everywhere and widely available,,,,,,,,,,,,,, getting very local and the "in town" beat or hype may save them and get viewership up

the free talent will give them this and provide it for free i suppose

we had a good local town paper,,,,,,, a conglomerate bought it up closed shop and ran it from their headquarters,, they owned 30 different newspapers and subscriptions/sales nosedived,,,,,,,, as they thru in generic, nonlocal stories,,,,,,,,,, 3 months and they folded
bigger is not always better

If they are funding the stations will they begin to impinge on editorial freedoms, will these stations become ventriloquist's dummies. He who pays the piper calls the tune.


Well thought out and researched post.

reply to post by shortywarn


Thanks for your input, Shortwarn, and lack of response never bothers me. Putting the thread together and doing the research is what I benefit from the most because I learn new things and became more aware of what's going on without the public's understanding "behind the scenes"; sharing it with everyone else here is merely the icing on the cake and I'm glad if even one other person benefits in some way from the info. Take care!

Timidgal

Originally posted by goldentorch
If they are funding the stations will they begin to impinge on editorial freedoms, will these stations become ventriloquist's dummies. He who pays the piper calls the tune.

EXACTLY!!! Hence my feeling that they will try to maintain a level of anonymity in an effort to make us think that we're reading news from an unbiased media source. Who better to hide the puppet master strings behind than a non-profit organization - those two words alone make us think of decent humanitarians, no? Thanks for reading and contributing.

Timidgal