California lawmakers advance bill benefiting newspapers

A bill that would bolster the economic outlook for California newspapers passed a state Senate committee Tuesday offering potential relief from an imminent financial blow publishers say could curtail local news coverage and delivery.

The measure by Assemblywoman Blanca Rubio, D-Baldwin Park, and co-authored by state Sens. Mike McGuire, D-Healdsburg, Bill Dodd, D-Napa, and others would allow newspapers to continue using independent contractors as carriers until Jan. 1, 2023.

Currently, newspapers must end that practice on Jan. 1, a little over four months away, under a law passed last year aimed at curbing the so-called gig economy.

The new bill, AB 323, approved on a unanimous vote by the Senate labor committee, is “intended to save local journalism,” said Jim Ewert, general counsel for the California Newspaper Publishers Association, which represents more than 400 daily and weekly newspapers.

Converting carriers from independent contractors to employees could increase newspapers’ costs up to 85%, prompting many newspapers to cut the number of days they publish, reduce home delivery and lay off staff, he said.

Steve Falk, publisher of The Press Democrat, said the paper, if forced to employ carriers seven days a week, would likely eliminate one or two days a week of print publication and end home delivery in outlying areas, including Mendocino and Lake counties and parts of west Sonoma County.

The threat of delivery cost increases of 60% to 80% could also prompt staff reductions that would impact news coverage, he said.

A two-year extension “buys some time,” Falk said, for continued growth in digital subscriptions, currently almost one-third of The Press Democrat’s reader base, to half or more of the newspaper’s distribution.

In that same time, internet access will likely expand in rural areas, he said. Reducing print delivery in 2023 “wouldn’t be as much of a shock as it would be today,” Falk said.

Many newspapers are “facing dire financial times,” Dodd said in a news release, noting that advertising revenue nationwide has “declined by more than half over the past seven years, dropping from $25 billion in 2012 to $11 billion in 2019.”

Economists expect the coronavirus pandemic will prompt an additional 25% decrease in 2021, he said.

Newspapers are “our eyes and ears, and we cannot afford to lose them,” Dodd said.

Seventeen Calfornia news publications have ceased print operations this year “and many more are on the brink,” McGuire said in an email.

“California’s newspapers help hold our government accountable, tell the unique stories of our communities and inform the people of important events that shape our state and nation,” he said. “AB 323 is critical to the future of this industry, its proud employees and the communities we all love to call home.”

Assemblywoman Lorena Gonzalez, D-San Diego, exempted doctors, lawyers and other occupations from AB 5, her 2019 measure that restricted the use of independent contractors. An accompanying bill, AB 170, provided a one-year exemption for newspaper carriers. Gonzalez is now proposing exemptions for musicians, recording industry workers, youth sports coaches and freelance writers and photographers — but holding firm on newspaper carriers.

In an interview, Dodd said he would like to see a permanent solution to the newspaper carrier issue, but a two-year exemption from the full employment mandate “is the best that can be done now.”

AB 323 could get a vote by the full Senate this week and only needs a floor vote in the Assembly, he said.

You can reach Staff Writer Guy Kovner at 707-521-5457 or guy.kovner@pressdemocrat.com. On Twitter @guykovner.

EDITOR’S NOTE: A previous version of this story misidentified a bill that would allow newspapers to continue using independent contractors as carriers until Jan. 1, 2023. The bill is AB 323.