Follow the money: NBI payment scheme

Australian media companies are universally affected by digital platforms acting as gatekeepers for the public to access news, and the Government’s planned News Bargaining Incentive (NBI) aims to address this. But its recent consultation on how to distribute funds raised by the NBI reveals how divided the Australian media can be when it comes to sharing the money between them.  

If digital platforms choose to pay NBI tax rather than claim an offset by doing deals with Australian media, Government will distribute that revenue through a Statutory Payment Scheme (SPS). The proposed formula is based an organisation’s employed Full Time Equivalent (FTE) journalists, as a percentage of total FTE journalists employed by media companies registered for the scheme. Proposed “weightings” proportionately increase the share of small to medium publishers and those servicing underrepresented communities, such as regional and multicultural.  

Of the 46 submissions, 35 were from media companies and their representatives, with the balance from other stakeholder groups, academics and individuals. None were from digital platforms, which have more interest in contesting the NBI legislation, rather than where the money ends up. 

This article outlines the fascinating battle of ideas in the positions of different media companies, how Minister for Communications Anika Wells responded last week, and a late change, and what lies ahead for the SPS. 

Who’s eligible? 
A significant number of media - mostly smaller, regional and community - call for reduction or removal of the $150,000 revenue threshold (carried over from the NMBC). Others, like Country Press Association and SBS want it retained and indexed. The Minister last week announced a separate grants program for companies under $150,000, which suggests the threshold is here to stay.

Double-dipping 
Many argue that media organisations which do deals with platforms should not be eligible, or the deal amount should be deducted from their share. It’s not clear if that will be in the legislation. In a late announcement, it also appears 5% of the distribution fund will be earmarked for Australian Associated Press.

The FTE formula, and alternatives
One of the most vigorously contested topics is whether the FTE journalist formula is the right way to divide the fund. Some media strongly support it, while advocating for adjustments. Opponents, like Guardian Australia, say the proposed formula is simplistic and rewards headcount over productivity. Free TV and Schwartz Media propose an alternative, based on an organisation’s investment in producing news and current affairs content, as a percentage of total investment by eligible Australian media. Southern Cross Media suggests modelling it on the film-financing Producer Offset. Others, including smaller and digital publishers, argue the FTE formula entrenches large legacy media models and excludes newer organisations which rely on freelancers or volunteers.

The Minister’s announcement suggests freelancers will be included, and FTE journalists will be still the central measure.

Journalist definitions
The “journalist” definition is also highly contested; a majority argue it is too narrow.  One concern is that it undervalues innovative and digital-first media, with Solstice Media describing contemporary news production as “impossible” without “collaborative multidisciplinary teams”. Most suggest adding a wider range of roles such as narrators, presenters, fact checkers, producers, camera operators, social media, podcast and video producers. NewsCorp argues for the inclusion of cadets. Some, like digital publisher Man of Many, suggest it should extend to data analysts and technology and operations staff including product engineers who build and maintain publishing infrastructure, content management systems, distribution interfaces, paywalls, subscription technology and AI adaptation. Others, like RUSSH Media, say hybrid management/journalism roles in smaller organisations should be counted.

Several argue for the formula’s “journalist” base to be renamed, for example as “eligible news content makers” (ABC), “news creators and distributors” (Southern Cross Media), “eligible news producers” (SBS) or “news staff” (Pulse Tasmania). 

The Minister’s announcement says other “essential roles” will be added, but we’ll have to wait for the legislation to see how far this goes.

Weightings for smaller, regional and diverse media
The majority of media submissions support weightings for smaller, regional and diverse media, most proposing diverse types of increases to strengthen the weightings. Free TV opposes weightings as unnecessary under its proposed investment cost formula, while Guardian Australia describes the proposed size/location weighting categories as a “crude metric” and suggests a “public interest weighting” for investigative reporters and editors. NewsCorp argues for weighting for cadets. The Minister indicated the existing proposed weightings will be doubled.

Payment conditions
A criticism of the NMBC was that it was impossible to know whether deal money was actually spent on news production. The consultation proposes organisations retain journalist numbers for the year they receive funds. While some, like Brunswick Voice, support this, others raise practical issues with retaining and recruiting staff, particularly in regional and remote areas (Country Press Association) or for bilingual staff (IMMA), and propose percentage-based “tolerance” thresholds.  Free TV, Guardian Australia, Nine and Southern Cross Media say funding should be based on historical employment data rather than committing organisations to specific numbers for the year ahead. 

There are similarly diverse views about what funds should be spent on. For example, SBS says there should be “maximum flexibility”, like there is under the NMBC, while Man of Many supports grant-style “use of funds” attestations for larger distributions.

Transparency
Most media companies argue only aggregated data should appear in public reports. Some university and stakeholder groups argued for more transparency, measurement and evaluation to inform future media policy.  

What next?
Collectively, the submissions tell a fascinating story of divided views across different media, and the divergent pressures they face. There are already winners and losers from the Minister’s announcement. For now, it appears the Government has done a deal with the Opposition to get the scheme passed, and the details will emerge as the legislation is introduced.

At the time of writing, Treasury still hasn’t published submissions to the NBI legislation consultation, and may never, so we may only be able to speculate on the full range of positions in that process. But for the Statutory Payment Scheme we certainly know that a lot of people had a lot to say about this, and not all will be pleased with the outcome. 

For the CMT’s position, see our Submission to the NBI Statutory Payment Scheme consultation.