Public Policy and Funding the News

A Project of the USC Annenberg Center on Communication Leadership & Policy

Public Notices

balancesLike postal subsidies, paid public notices trace their American origins to colonial days. And like postal subsidies, public notices mandated by the government have been a critical component of economic stability for newspapers. Yet they are almost certain to shrink drastically as a source of high-margin revenue for the commercial media. Governments at all levels are beginning to switch their public notices to the Web, a move that at best means sharply reduced billings for publishers, and at worst means they could lose the business altogether.

Public notices are government-required announcements that give citizens information about important activities. In most cases government mandates these notices of itself or of subordinate governments; in other cases they establish publication requirements for private-sector concerns. Typical public-notice laws apply to public budgets, public hearings, government contracts open for bidding, unclaimed property, and court actions such as probating wills and notification of unknown creditors. Public agencies have required paid publication of this kind of information for decades as a way to ensure that citizens are informed of critical actions.

Historically, these fine-print notices have been a lucrative business for newspaper publishers, and have touched off heated bidding wars for government contracts. Legal notices have been especially important to weekly and other community newspapers. Their trade association, the National Newspaper Association, estimated in 2000 that public notices accounted for 5 percent to 10 percent of all community newspaper revenue.

While other forms of advertising have plummeted, public notices have been a bright spot for publishers. Although small newspapers are the chief beneficiaries of public notices, nearly all newspapers benefit to some extent. The Wall Street Journal, for example, has a contract with the government to print seized-property notices. In a four-week study, we discovered that the government was a top purchaser, by column inches, of ad space in the Journal. It’s a business the newspaper would like to expand. In 2009 it was battling with Virginia-area papers to get its regional edition certified to print local legal notices.

But the era of big money in public notices will almost certainly fade away. Proposals have been introduced in 40 states to allow local and state agencies to shift publication to the Web, in some cases to the government’s own Web sites. Responding to The Wall Street Journal’s efforts to get a share of the public-notice revenue in Virginia, a circuit court judge in Norfolk said it “may be an opportune time for the General Assembly to revisit the issue of notice by publication in light of the variety of electronic means of mass communication available.” The media industry has beaten down many of these initiatives so far, but in a clear indication of future trends, the shift is beginning to happen. The Obama administration’s Justice Department announced in 2009 that it would move federal asset forfeiture notices to the Web, saving $6.7 million over five years.