The Trump administration’s freeze on USAID foreign assistance funding has put a hold on $268 million in grants for independent media and information in over 30 countries, putting the non-profit watchdog sector in crisis and potentially leading to unpaid projects.
Trump bemoaned payments to the “FAKE NEWS MEDIA” for producing positive stories about Democrats on his Truth Social platform.
White House Press Secretary Karoline Leavitt announced that Elon Musk’s government efficiency team is “working on cancelling those payments” after the government spent over $8 million on Politico subscriptions. That immediately sparked a social media frenzy and an online detective quest for additional proof of taxpayer funding.
With these events spiralling-out, it might be the appropriate time to explore the debate over Government-Funded Media. It was only natural for a scandal to break-out in 2023 when Twitter labelled the primary BBC account as “Government Funded Media”, perhaps because Musk had tapped a raw nerve. Musk, the owner of X (formerly Twitter), and the BBC got into a heated spat over the tag of “Government-Funded Media”.
The reason for the action against numerous media houses which made their credibility questionable at that time could be understood through what X help centre guidelines read on the particular matter. It said “Government funded media is defined as an outlet where the government provides some or all of the outlets funding and may have varying degrees of government involvement over the editorial content”. Although the tags were later removed after a few months.
In 2021, a report in the New York Times claimed that NewsClick, an Indian digital news outlet, was part of a Chinese propaganda network. The NYT piece sparked a political and media scandal within India.
Due to claims of money laundering involving foreign cash in the form of Foreign Direct Investment (FDI) that greatly inflated the value of the company’s shares, the Enforcement Directorate, India’s domestic law enforcement agency, conducted raids at the NewsClick office and the home of its founder, Purkayastha, in 2023. The NewsClick was covering the farmer’s movement extensively at the time.
In its report, The New York Times claimed that US Millionaire Neville Roy Singham had donated money to NewsClick, to “sprinkle its coverage with Chinese government talking points”. The report accused Singham of working closely with Beijing and of financing its propaganda internationally. This was especially controversial due to the long-running border dispute between New Delhi and Beijing.
The International Consortium of Investigative Journalists (ICIJ), a non-profit organization, is known for its cross-border investigative reporting, including the “Panama Papers”, which exposed the offshore finance sector’s shadowy underbelly.
Organizations like ProPublica and ICIJ rely on other channels to reach their desired audience, such as Policy Advocacy and Public Opinion. They offer their work for free, but the scale and resources required for investigative journalism are currently lacking.
Upon upending of USAID, Drew Sullivan of OCCRP (Organized Crime and Corruption Reporting Project), a global network of investigative journalists, emphasized the value of USAID support to his organization’s network. “This funding enabled young investigative reporters to uncover misconduct in addition to funding innovative, award-winning collaborative journalism. Its funds protected journalists from online and physical threats and helped those living abroad who persisted in covering corrupt officials and autocrats in their native nations,” he said.
Some of the gravest immediate threats are being faced by exiled outlets and independent media in places such as Ukraine, Cameroon, and throughout Central America.
Syrian Journalists have been the largest global exile since the 2011 Civil War. They have fled to neighbouring countries like Jordan, Lebanon, and Türkiye, where they face legal and operational challenges. In Jordan, they lack legal recognition and face travel restrictions. In Lebanon, they face legal controls and threats of violence. Some Syrian journalists have managed to travel to Europe, mainly Germany or France, where assistance programs have helped them.
State Aid for News Media: Principles and Challenges in the Digital Age by Murschetz and Karmasin (2013) is a study consisting of sample size of few Western Countries about the aforesaid issue, where Free Speech and Democratic Values are practiced extensively. It consists of critical insights about the role of Government-Funded Media.
High fixed and Sunk Costs (i.e. expense that cannot be recouped after it has already been incurred. The materials and time are gone, and no amount of wishing can restore them; it’s like attempting to unbake a cake), Growing Returns to Scale (Example: A news website makes significant investments in its digital distribution, content management system, and online platform. The cost of distributing each new article or video drops dramatically as they grow), and Economies of Scope (Example: A media company that produces both newspapers and online news can share journalists, editors, and content across both platforms. This reduces costs per unit and creates an economy of scope by utilizing the same resources for multiple products) are variables that present serious challenges for the media industry.
In order to make up for a lack of market revenue, the government can offer both direct (grants, tax breaks) and indirect (exemptions from payroll taxes) assistance, particularly for public interest media.
Government Subsidies alone, however, are insufficient to properly address the increasing competition and revenue decreases brought forth by the digital age. To ensure that government assistance fosters independence, quality, and innovation without causing unforeseen effects, it must be carefully evaluated.
In the age of digital revolution, the objective is to maintain high-quality journalism while striking a balance between democratic, ethical, and economic values.
The UK government established the Cairncross Commission (2017) to address the media industry’s decline. Its main suggestion can be summed up simply as follows: The government ought to concentrate on providing the media sector with the assistance it needs to become more independent.
For instance, this can entail establishing regulations or rewards that assist media firms in adjusting to issues like digitization or diminishing earnings. Only news that serves the public interest, like investigative journalism or local news coverage, should receive direct financial support if it is required.
Even though producing such news is not viable for commercial organizations, this investment should guarantee that there is at least a basic level of it available.
Scavenging through the past data of DAVP, we picked fiscal year 2008 to 2013 and found, beginning in fiscal year 2008, the DAVP distributed advertisements to around 5,300 magazines for a total of Rs 1,960 crore during the next six years.
Spending trends over time show a connection to the nation’s election schedule. The 12-month period ending on March 31, 2009, right before the nation’s general elections, saw the largest increase in spending growth during these six years. The spending before elections in states like Andhra Pradesh, Haryana, Assam, Kerala, and others in April 2009 and 2011 peaked, indicating that the central government may use the DAVP budget as a political tool, despite its intended public interest.
According to Google’s Political Ad Transparency Data and The BusinessLine Report, in the 2024 Lok Sabha polls, all political parties had increased their digital advertising spending on Google, with the ruling Bharatiya Janata Party (BJP) leading the way.
The government’s Central Bureau of Communication (formerly the Directorate of Advertising and Visual Publicity) was the biggest spender at that time, but on March 15, in accordance with the EC’s announcement of the poll dates, the agency ceased advertising.
The money spent in the aforementioned ways could be funnelled to cauterize talent loss and capital drain in a way which promotes objectivity and public interest in news reporting in an already struggling Industry, especially post Covid-19.
