Controversial Bill to Require Legacy Media Give 120-Day Notice of Sale

A bill to require legacy media outlets to give at least 120 days advance warning through an intent to sell notice before a sale of a local news company  continued to be heard in the Assembly this week.

Assembly Bill 611, authored by Assemblyman Alex Lee (D-San Jose), would specifically require a legacy local news organization, at least 120 days before the final execution of any transaction agreement, to provide a notice of intent to sell. AB 611 would require written notice to be provided, among other things, directly to each employee of the legacy local news organization and would require the notice to include prescribed information, including the name of the proposed buyer. The bill, also known as the Keep News Independent Act, would specify that its provisions do not apply to a legacy local news organization that would be independently owned after a transaction.

Assemblyman Lee wrote the bill to delay sales of new outlets to large owners, like corporations or billionaires, to give other local outlets time to prepare or to give time for locals or non-profits to come up with alternative outlets. In addition, Lee noted that only 10 companies own over half of all daily newspapers in the U.S., and that ownership can lead to reduction of journalistic standards and not covering stories that otherwise would have been reported on.

“AB 611 will require local media outlets to provide advance notice to employees and subscribers before selling,” said Lee of his bill. “The notice will give newsroom staff and local communities the opportunity and time to approach the owners with alternatives to keep the outlet independently owned.

“Only 10 companies own over half of all daily newspapers in the U.S., and the consolidation of local news hurts our local communities. It’s crucial that we keep local news local, so voters are informed about community issues that matter most to them.

“It would simply require disclosure when a paper wants to sell. The law would not apply to sales transactions to a private individual so long as they are not a publicly traded company or an investment fund and would provide a modicum of transparency to communities. This is not good for democracy.”

“AB 611 will give newsroom staff and local communities the opportunity and time to approach the owners with alternatives to keep the outlet independently owned,” added Lee in a recent statement. “It’s a common-sense policy that prioritizes high-quality, independent news. As AB 611 moves through the legislative process, I look forward to continuing working with my colleagues and other stakeholders to preserve community journalism, and keep our newspapers locally owned and operated.”

However, AB 611 has been fervently challenged by many outlet organizations, including the California News Publishers Association (CNPA). They noted that the four-month delay in sale, during which time the sale could either be possibly stopped or suddenly have an alternate competitor in the area, could cause the sale to go through. This could possibly mean layoffs or even the shut down of the outlet as a result.

“We agree that journalism is critical to the future of democracy in this country,” said the CNPA in a statement. “However, the proponents have no evidence that government-compelled notice of a sale of a local news organization will arrest the decline of local journalism in California.”

With such a large amount of opposition, AB 611 has proven to be a divisive bill in the Legislature. While it did pass the Assembly Judiciary Committee late last month, it was only by a 7-3 with 2 abstentions vote, with some Democrats even joining Republicans opposing the bill. Total Assembly passage is likely for the bill, but AB 611 could see increased resistance in the Senate, as bills are generally harder to pass there.

AB 611 is expected to have another Assembly vote soon.