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Recent legislation threatens newspapers’ public notice revenue

As a new public notice law in Florida takes effect allowing government and contractors to place legal advertisements online, newspaper publishers are concerned similar legislation may threaten revenue nationwide.

(CN) — Want to post a notice of a public meeting, announce a public bid or a project or inform the public of some other government proceeding? Do you need to publish updated voter rolls, notices of election or notify non respondents to subpoenas of legal proceedings or court actions? Are you a contractor who has finished a publicly funded project and you need to inform the taxpayers of its completion?

Until this year, you were legally obligated, in most instances, to pick up the phone and call your nearest newspaper. Historically, newspapers in all 50 states have been the means to disseminate the public notice of certain operations of the government, certain business activities and certain civil legal proceedings. But in May, Governor Ron DeSantis signed the first law in the nation threatening to strip that responsibility — and its related revenue — away from independent publishers. 

Florida’s new law, which takes effect Jan. 1, allows local governments to continue to post public notices in local newspapers, but also carved out new provisions to allow such notices to be posted exclusively on specific government controlled websites or alternatively, in free newspapers or print publications that have not historically met the requirements to publish public notices.

“Public notice goes back a long way,” said Richard Karpel, executive director of the Public Notice Resource Center (PNRC), a national nonprofit that partners with state press associations. “It used to be someone on the courthouse steps yelling ‘hear ye, hear ye,' but newspapers are still, by far, the best way to get public notice out. The idea itself is a really neat idea, which is, the government passes laws that require it to inform citizens in a nonpartisan way about the activities it is undertaking. And it's different from other types of information in that there are statutes or laws requiring [the government] to present that information to the public in a specific way.”

PNRC considers public notices to be one of three legs supporting a proverbial stool of government transparency. The other two legs are open meetings and the Freedom of Information Act. PNRC believes notices should remain in the realm of newspapers because newspapers are more accessible, independent, verifiable and archivable than government websites.

“This is not an argument about print versus the internet,” Karpel said. “This is an argument about newspapers and newspaper websites versus government websites. Most newspaper websites have a lot more traffic than government websites and they are more user friendly, so the idea that you're going to move public notices to government websites and not lose lots of transparency is ludicrous.”

Just a year ago, the Florida Legislature passed a compromise bill with the support of newspaper publishers that would have kept all public notices in their domain. But Karpel said DeSantis viewed newspapers as a political target. 

“They have a governor who wants to run for president, basically,” he said. “And so he picks fights with institutions that you can paint as enemies. And that's a big part of why the bill got introduced and passed in Florida.”

Among the publications that expressed opposition to the bill was the Tallahassee Democrat, the Miami Herald and the Tampa Bay Times. During committee meetings when the proposal was discussed, it was suggested newspapers earn millions of dollars per year by publishing the ads. As the subscriber base and traditional ad revenue have plummeted for many newspapers in the past 10-15 years, some evidence suggests the revenue from publishing public notices is actually keeping some smaller newspapers afloat. 

But Karpel said the revenue should not be considered a government handout to independent publishers. 

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“It’s not a subsidy, it's payment for a service,” he said. “Very often the government pays private businesses to perform services they are not equipped to perform and newspapers are in the business of providing information to the public.”

In 2021, PNRC tracked some 213 pieces of proposed legislation affecting public notices in 46 states, plus the U.S. Congress, but Florida is the first to strip the authority away from newspapers. At least 12 other states have tried. 

For the past four years, Andrew Sorrell, one of the youngest members of the Alabama Legislature, attempted to pass a similar bill in Alabama. It never advanced beyond committee, but Sorrell hopes a colleague will continue to pursue it when he leaves the legislature early next year. In May, he won the Republican nomination for state auditor. 

“The bill serves two purposes,” Sorrell said. “Number one it saves taxpayer money because it's free to host it online. Second, it's much more easily accessible online and you can view any county's legal notices online rather than having to go buy a newspaper in every county.”

The Alabama Press Association does in fact curate the state’s legal ads online, but Sorrell said most people aren’t aware the website exists.

“It would make more sense to put them somewhere like the Secretary of State’s website,” he said. “Nobody checks the newspaper to see if they are registered to vote… you call the registrar's office or they send you a card.”

Sorrell said his bill never advanced beyond committee because many legislators did not want to upset their hometown newspapers or they cited elderly constituents who don’t know how to use the internet, or rural areas of the state where internet access is unreliable. 

“I got plenty of calls about it, but all the newspapers are going to be against it because they get millions of dollars from it.”

Indeed, a recent lawsuit filed in Perry County, Alabama hints at the competitive and potentially lucrative nature of public notice advertising among independent publishers. 

On July 29, the publisher of The Perry County Herald sued another local paper, the Marion Times Standard, for causes including slander, libel and tortious interference with business relations. Allegedly, when management for the Times Standard changed hands earlier in 2022, representatives began contacting members of the local government and legal community to express their belief that the Herald was ineligible or unfit to publish public notices. The Herald was founded in 2005. The Times Standard dates back to 1839.

The lawsuit claims those representations were false and caused damage to the Herald’s reputation and finances. The Herald is seeking more than $9 million in damages. 

“The revenue realized from the publication of legal notices is what keeps the majority of local newspapers in business,” the complaint states, noting Perry County newspapers likely generate revenue in excess of $100,000 per year by publishing public notices. Representatives for both publications declined or did not respond to requests for comment. 

But Rob Holbert, co-publisher of Lagniappe, the largest weekly newspaper in Mobile County, fought a similar battle years ago when his 20-year-old publication sought eligibility to publish public notices. In Alabama, state law requires newspapers to possess a publications class postal permit, and one of the requirements of obtaining the permit is that the publication have a subscriber or requester base greater than 50 percent of its total circulation. At the time of Lagniappe’s initial inquiry, it was a free newspaper with a fairly small number of subscribers who received the paper by mail. 

“We sought to have a local bill passed in the state legislature that would allow us to take legals without the postal permit — arguing that the USPS had nothing to do with public notice oversight or ensuring publications were meeting other requirements of the law,” Holbert recalled. “Other local publications ran up to Montgomery to try to keep this exemption from passing and it never made it to a vote of the local delegation. Eventually, we were able to find a workaround being used by other free publications in the state and have been running legal advertising since 2017.”

Holbert acknowledged his motivation was primarily financial, but added the decision gave the local community a fourth option with whom to publish public notices, and Lagniappe did so by offering a lower rate than existing publishers. He said the revenue generated from public notices remains just a fraction of what Lagniappe earns from traditional advertisers and subscribers, but “it does help us put out a quality newspaper and helps pay salaries.” 

“For many small Alabama weekly newspapers, legal advertising is vitally important,” he said. “In many cases, I would guess it is the majority of what they bring in annually.”

Still, state law prevents Lagniappe from receiving public notices from neighboring Baldwin County, even though a portion of its newspapers are distributed there. Holbert said the law could use some improvement, but taking public notices out of the realm of newspapers is a setback. 

“Without newspapers handling legals and getting them online, the state will have to create another organization to collect those ads and put them on the web,” he said. “Will that be free? Nope. The money will go somewhere. At least the way it is now helps keep some newspapers from sliding into oblivion. In a roundabout way, legal notices are good government because without them, a lot of poor counties would lose their newspapers.”

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