Google To Pay About $250 Million To Support Local Journalism In California

Google has struck a deal with Californian lawmakers to fund the local newsrooms over the next 5 years. Learn more about the reason for and reactions to this deal.

August 23, 2024

  • Google has agreed to pay about $250 million to support local newsrooms in California.
  • The move results from a tussle between California lawmakers and Big Tech regarding local journalism being impacted by tech companies and increasing online readership, which has led to declining advertising.

The search engine giant Google has brokered a deal with California lawmakers. According to the agreement, the company will direct almost $250 million to local newsrooms over the next five years. The deal comes as part of the lawmakers’ efforts to require tech companies to support the journalism that helps them and Google’s efforts to avoid a bigger bill.

What Led to the Deal?

In April, California lawmakers proposed the California Journalism Preservation Act, emulating strategies other countries like Canada and Australia have used. The regulation would require Google and other tech giants to pay local newsrooms a fee for linking the state’s residents to news articles. The state tabled the bill to support local journalism as an increased shift toward online readership and tech giants like Google have impacted the journalism industry and advertising.

Studies estimate that Google and Meta received a much larger cut of advertising than publishers. A report by the Electronic Frontier Foundation found that half of every ad dollar went to fees, while subscriptions were subject to app store taxes. Another 2023 study estimated that Google and Meta would owe US publishers about $13.9 billion annually if a national bill were enacted.

Supporters of the bill said that it would give publishers the leverage to make profit-sharing more equitable. However, Google alleged that it already drove traffic to publishers, and the law would favor media conglomerates at the risk of further hollowing out local news outlets. The company had also threatened to remove links to California news websites. Further, it ran tests to remove links to Californian news sites, saying the bill may lead to significant changes in its product experience if passed.

However, the tech giant seems to have changed its tune now.

More About the Deal

Google’s payment will be split between two initiatives managed by the News Transformation Fund at UC Berkeley’s Graduate School of Journalism. According to Politico, $180 million will be distributed to Californian news outlets, excluding broadcasters. Another $70 million will be set aside for AI resources to help “strengthen the workforce.” The initiatives may go live sometime next year.

In a statement, California Governor Gavin Newsom saidOpens a new window , “The deal not only provides funding to support hundreds of new journalists but helps rebuild a robust and dynamic California press corps for years to come, reinforcing the vital role of journalism in our democracy.” The California News Publishers Association also called it “a first step toward what we hope will become a comprehensive program to sustain local news in the long term.”

See more: Google Releases Chrome Beta Updates for Android, iOS

Deal Attracts Criticism

The deal has, however, attracted criticism from a few quarters. For example, Senate President Pro Tempore Mike McGuire raised funding concerns. In a statement, he said that the deal didn’t completely address the industry’s inequities. He said, “We have concerns that this proposal lacks sufficient funding for newspapers and local media and doesn’t fully address the inequities facing the industry.” McGuire said the Senate pursued a global solution that would hold all big tech companies accountable.

Senator Steve Glazer, who authored a parallel bill, also said that Google’s contribution was inadequate and warned that the compromise undercut their efforts toward a long-term solution. He further questioned the absence of other tech giants in the deal. He said, “There is a stark absence in this announcement of any support for journalism from Meta and Amazon. These platforms have captured intimate data from Californians without paying for it. Their use of that data in advertising is the harm to news outlets that this agreement should mitigate.”

The Media Guild of the West also criticized the deal, saying, “The publishers who claim to represent our industry are celebrating an opaque deal involving taxpayer funds, a vague AI accelerator project that could very well destroy journalism jobs, and minimal financial commitments from Google to return the wealth this monopoly has stolen from our newsrooms.”

“Not a single organization representing journalists and news workers agreed to this undemocratic and secretive deal with one of the businesses destroying our industry,” the guild said.

Takeaway

While the deal has attracted both support and criticism, the state financing component still needs legislative approval as part of California’s annual budget. Further, with criticisms about the various elements of the deal and a parallel bill being tabled, it is yet to be seen how Google’s deal will move forward.

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Karthik Kashyap
Karthik comes from a diverse educational and work background. With an engineering degree and a Masters in Supply Chain and Operations Management from Nottingham University, United Kingdom, he has experience of close to 15 years having worked across different industries out of which, he has worked as a content marketing professional for a significant part of his career. Currently, as an assistant editor at Spiceworks Ziff Davis, he covers a broad range of topics across HR Tech and Martech, from talent acquisition to workforce management and from marketing strategy to innovation. Besides being a content professional, Karthik is an avid blogger, traveler, history buff, and fitness enthusiast. To share quotes or inputs for news pieces, please get in touch on [email protected]
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