Google's $250M California Journalism Deal: A Controversial Agreement

Google just made a $250M deal with California to support journalism -- here's what it means | TechCrunch

This week, Google joined a $250 million deal with the state of California to support California newsrooms. While the deal offers a much-needed cash infusion for an industry that's seen crippling layoffs this year, the deal's been criticized by some as a half-measure -- and a cop-out. By agreeing to this deal, Google averts bills that would have forced it and other tech companies to pay news providers when they run ads alongside news content on their platforms. The Media Guild of the West (MGW), the local chapter of the journalism labor union the NewsGuild-CWA, denounced the deal in a post on X, calling it a shakedown. "After two years of advocacy for strong anti-monopoly action to start turning around the decline of local newsrooms, we are left almost without words," MGW said in a statement. "The publishers who claim to represent our industry are celebrating ... minimum financial commitments to Google to return the wealth this monopoly has stolen from our newsrooms." But what would the Google agreement actually accomplish, should it be approved by California's policymakers? And are there any reasons to be optimistic? Last year, California Assemblymember Buffy Wicks introduced a bill, AB 886, that would've mandated certain platforms pay publishers a percentage of their ad revenues in exchange for linking to those publishers' articles. Senator Steve Glazer introduced a second bill, SB 1327, that would've levied a 7.25% tax on ad revenue to create a tax credit for newsrooms. The $250 million Google deal leaves both proposals dead in the water. Instead of imposing a fee structure, the deal will draw on funding from Google, taxpayers, and potentially other private sources to establish two programs: the News Transformation Fund and the National AI Innovation Accelerator. Administered by UC Berkeley's Graduate School of Journalism, the News Transformation Fund will support newsrooms (excluding broadcasters) based in California. Taxpayers' contributions amount to $70 million while Google is pledging to give at least $55 million for a grand total of ~$125 million, with the funds to be doled out to news organizations based on how many reporters they employ. Funds will be distributed over a five-year period. Twelve percent or more of the News Transformation Fund's pool will go toward "locally focused" publishers and publications aimed at underrepresented groups, reports The New York Times. Google will pay $15 million into the News Transformation Fund in the first year and "at least" $10 million in each of the following years; California taxpayers will provide $30 million in the first year and $10 million in each of the next four years. The National AI Innovation Accelerator has a different, more tech-driven mission. With $62.5 million from Google over five years, it'll provide "organizations across industries and communities" with funding to experiment with AI to "assist them in their work," according to a press release. The funds "will be administered in collaboration with a private nonprofit," the release reads, "and will provide organizations from journalism, to the environment, to racial equity and beyond with financial resources and other support." You'll notice that Google's financial commitments come to $117.5 million -- short of the $250 million figure quoted in the release. That's because the remainder ($132.5 million) is in the form of replenishments to the company's existing programs to support journalism, the Google News Initiative and partnerships through Google News Showcase, Google says. The initiatives, slated to go live sometime in 2025, drew praise from California governor Gavin Newsom and the California News Publishers Association (CNPA), a nonprofit trade association representing California newspapers. "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," Newsom said in a statement. CNPA called the agreement "a first step toward what we hope will become a comprehensive program to sustain local news in the long term." Others were skeptical it's a slam dunk. Senate president pro tempore Mike McGuire questioned legislative support for California's share of the deal. And Senator Glazer called it "completely inadequate," noting that Google is the sole tech company participating. (OpenAI is contributing technology, but not any money.) "There is a stark absence in this announcement of any support for journalism from Meta and Amazon," Glazer said in a release. "These platforms have captured the 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." Glazer also suggests Google is paying less than its fair share -- and at least one study supports his argument. Researchers at Columbia, the University of Houston, and consulting firm the Brattle Group estimate that Google owes U.S. publishers 50% of the value added to their platforms by news, which they peg at between $10 billion and $12 billion in revenue sharing annually. The past six months have been brutal for the news sector. The industry could be on track to shed 10,000 jobs this year, per Fast Company. That'd be an improvement from last year, which saw over 21,400 journalism jobs eliminated -- but it's hardly a sunshiney outlook. California has had a particularly rough go of it. According to a 2023 Northwestern Medill School of Journalism report, the state has lost one-third of its publishers and 68% of its journalists since 2005. The Los Angeles Times, the largest metro daily newspaper in California (and the U.S.), cut more than 20% of its newsroom in January -- one of the largest cuts in the paper's 142-year history. What's causing the decline? Many factors, from slow-growing ad budgets to inflation (which has harmed subscription growth). The struggle to find a sustainable business model hasn't been helped by Big Tech, either, whose search and feed algorithm changes -- and AI-generated overviews -- have reduced publisher traffic. Pundits argue that tech has also trained people to expect free content -- close to half of Americans get their news from social media (despite frequent inaccuracies) -- and captured an increasing share of ad dollars at the expense of publishers. Approximately 60% of global ad spend is now funneled toward Big Tech companies, including Google and Meta; one study found that broadcasters lose nearly $2 billion in ad revenue annually to Google's and Meta's platforms. Tech companies have historically played hardball when faced with efforts to fund journalism through fees levied on their platforms. In opposition to Wicks' bill, Google said it was considering temporarily blocking news websites from some California users' search results. Abroad, the company fought bills in Australia and Canada that would've forced it to compensate publishers -- in 2021 threatening to leave Australia if the government's proposed legislation went through. After France implemented an EU law to grant publishers the right to charge for aggregation of their content, Google said that it would remove snippets from Google Search. And in Spain, which passed a similar law in 2014, Google shut down Google News altogether. Google has since made arrangements with publishers in those countries through the aforementioned Google News Showcase, its program launched in 2020 that pays selected outlets on Google's own terms. At last count, Google had around 180 publications in the program; the company claims it's committed over $1 billion to journalism since 2020.

Google's agreement to pay millions for California news called a bad deal by journalists

Google will soon give California millions of dollars to help pay for local journalism jobs in a first-in-the-nation deal, but journalists and other media industry experts are calling it a disappointing agreement that mostly benefits the tech giant. The agreement, which was hashed out behind closed doors and announced this week, will direct tens of millions of public and private dollars to keep local news organizations afloat. Critics say it's a textbook political maneuver by tech giants to avoid a fee under what could have been groundbreaking legislation. California lawmakers agreed to kill a bill requiring tech to support news outlets they profit from in exchange for Google's financial commitment. By shelving the bill, the state effectively gave up on an avenue that could have required Google and social media platforms to make ongoing payments to publishers for linking news content, said Victor Pickard, professor of media policy and political economy at the University of Pennsylvania. California also left behind a much bigger amount of funding that could have been secured under the legislation, he said. "Google got off easy," Pickard said. Google said the deal will help both journalism and the artificial intelligence sector in California. "This public-private partnership builds on our long history of working with journalism and the local news ecosystem in our home state, while developing a national center of excellence on AI policy," Kent Walker, president of global affairs and chief legal officer for Google's parent company Alphabet, said in a statement. State governments across the U.S. have been working to help boost struggling news organizations. The U.S. newspaper industry has been in a long decline, with traditional business models collapsing and advertising revenues drying up in the digital era. As news organizations move from primarily print to mostly digital, they have increasingly relied on Google and Facebook to distribute its content. While publishers saw their advertising revenues nosedive significantly in the last few decades, Google's search engine has become the hub of a digital advertisement empire that generates more than $200 billion annually. The Los Angeles Times was losing up to $40 million a year, the newspaper's owner said in justifying a layoff of more than 100 people earlier this year. More than 2,500 newspapers have closed since 2005, and about 200 counties across the U.S. do not have any local news outlets, according to a report from Northwestern University's Medill School of Journalism. California and New Mexico are funding local news fellowship programs. New York this year became the first state to offer a tax credit program for news outlets to hire and retain journalists. Illinois is considering a bill similar to the one that died in California. Here's a closer look into the deal California made with Google this week: The deal, totaling $250 million, will provide money to two efforts: funding for journalism initiatives and a new AI research program. The agreement only guarantees funding for a period of five years. Roughly $110 million will come from Google and $70 million from the state budget to boost journalism jobs. The fund will be managed by UC Berkeley's Graduate School of Journalism. Google will also kick in $70 million to fund the AI research program, which would build tools to help solve "real world problems," said Assemblymember Buffy Wicks, who brokered the deal. The deal is not a tax, which is a stark departure from a bill Wicks authored that would have imposed a "link tax" requiring companies like Google, Facebook and Microsoft to pay a certain percentage of advertising revenue to media companies for linking to their content. The bill was modelled after a policy passed in Canada that requires Google to pay roughly $74 million per year to fund journalism. Tech companies spent the last two years fighting Wicks' bill, launching expensive opposition campaigns and running ads attacking the legislation. Google threatened in April to temporarily block news websites from some California users' search results. The bill had continued to advance with bipartisan support -- until this week. Wicks told The Associated Press on Thursday that she saw no path forward for her bill and that the funding secured through the deal "is better than zero." "This represents politics is the art of the possible," she said. Industry experts see the deal as a playbook move Google has used across the world to avoid regulations. "Google cannot exit from news because they need it," said Anya Schiffrin, a Columbia University professor who studies global media and co-authors a working paper on how much Google and Meta owes to news publishers. "So what they are doing is using a whole lot of different tactics to kill bills that will require them to compensate publishers fairly." She estimates that Google owes $1.4 billion per year to California publishers. Google disagrees with Schiffrin's findings. A spokesperson said news queries account for under 2% of all searches and that Google doesn't make money on them. The Media Guild of the West, a union representing journalists in Southern California, Arizona and Texas, said journalists were locked out of the conversation. The union was a champion of Wicks' bill but wasn't included in the negotiations with Google. "The future of journalism should not be decided in backroom deals," a letter by the union sent to lawmakers reads. "The Legislature embarked on an effort to regulate monopolies and failed terribly. Now we question whether the state has done more harm than good." The agreement results in a much smaller amount of funding compared to what Google gives to newsrooms in Canada and goes against the goal to rebalance Google's dominance over local news organizations, according to a letter from the union to Wicks earlier this week. Others also questioned why the deal included funding to build new AI tools. They see it as another way for tech companies to eventual replace them. Wicks' original bill doesn't include AI provisions. The deal has the support of some journalism groups, including California News Publishers Association, Local Independent Online News Publishers and California Black Media. The agreement is scheduled to take effect next year, starting with $100 million to kickstart the efforts. Wicks said details of the agreement are still being ironed out. California Gov. Gavin Newsom has promised to include the journalism funding in his January budget, Wicks said, but concerns from other Democratic leaders could throw a wrench in the plan. ___ This story has been updated to correct that, as well as Southern California and Texas, the Media Guild of the West represents journalists in Arizona, not Nevada.

Google agreed to pay millions for California news. Journalists call it a bad deal

Google will provide millions to fund California journalism jobs in a landmark deal while also supporting an AI research program. This comes after lawmakers dropped a bill requiring tech firms to pay publishers for linking to their content. Critics argued the deal largely benefits Google and offers less funding than anticipated.Google will soon give California millions of dollars to help pay for local journalism jobs in a first-in-the-nation deal, but journalists and other media industry experts are calling it a disappointing agreement that mostly benefits the tech giant. The agreement, which was hashed out behind closed doors and announced this week, will direct tens of millions of public and private dollars to keep local news organisations afloat. Critics say it's a textbook political maneuver by tech giants to avoid a fee under what could have been groundbreaking legislation. California lawmakers agreed to kill a bill requiring tech to support news outlets they profit from in exchange for Google's financial commitment. By shelving the bill, the state effectively gave up on an avenue that could have required Google and social media platforms to make ongoing payments to publishers for linking news content, said Victor Pickard, professor of media policy and political economy at the University of Pennsylvania. California also left behind a much bigger amount of funding that could have been secured under the legislation, he said. "Google got off easy," Pickard said. Google said the deal will help both journalism and the artificial intelligence sector in California. "This public-private partnership builds on our long history of working with journalism and the local news ecosystem in our home state, while developing a national centre of excellence on AI policy," Kent Walker, president of global affairs and chief legal officer for Google's parent company Alphabet, said in a statement. State governments across the US have been working to help boost struggling news organisations. The US newspaper industry has been in a long decline, with traditional business models collapsing and advertising revenues drying up in the digital era. As news organisations move from primarily print to mostly digital, they have increasingly relied on Google and Facebook to distribute its content. While publishers saw their advertising revenues nosedive significantly in the last few decades, Google's search engine has become the hub of a digital advertisement empire that generates more than USD 200 billion annually. The Los Angeles Times was losing up to USD 40 million a year, the newspaper's owner said in justifying a layoff of more than 100 people earlier this year. More than 2,500 newspapers have closed since 2005, and about 200 counties across the US do not have any local news outlets, according to a report from Northwestern University's Medill School of Journalism. California and New Mexico are funding local news fellowship programmes. New York this year became the first state to offer a tax credit program for news outlets to hire and retain journalists. Illinois is considering a bill similar to the one that died in California. Here's a closer look into the deal California made with Google this week: What does the deal entail? The deal, totalling USD 250 million, will provide money to two efforts: funding for journalism initiatives and a new AI research programme. The agreement only guarantees funding for a period of five years. Roughly USD 110 million will come from Google and USD 70 million from the state budget to boost journalism jobs. The fund will be managed by UC Berkeley's Graduate School of Journalism. Google will also kick in USD 70 million to fund the AI research program, which would build tools to help solve "real world problems", said Assemblymember Buffy Wicks, who brokered the deal. The deal is not a tax, which is a stark departure from a bill Wicks authored that would have imposed a "link tax" requiring companies like Google, Facebook and Microsoft to pay a certain percentage of advertising revenue to media companies for linking to their content. The bill was modelled after a policy passed in Canada that requires Google to pay roughly USD 74 million per year to fund journalism. Why are tech companies agreeing to this now? Tech companies spent the last two years fighting Wicks' bill, launching expensive opposition campaigns and running ads attacking the legislation. Google threatened in April to temporarily block news websites from some California users' search results. The bill had continued to advance with bipartisan support - until this week. Wicks told The Associated Press on Thursday that she saw no path forward for her bill and that the funding secured through the deal "is better than zero". "This represents politics is the art of the possible," she said. Industry experts see the deal as a playbook move Google has used across the world to avoid regulations. "Google cannot exit from news because they need it," said Anya Schiffrin, a Columbia University professor who studies global media and co-authors a working paper on how much Google and Meta owes to news publishers. "So what they are doing is using a whole lot of different tactics to kill bills that will require them to compensate publishers fairly." She estimates that Google owes USD 1.4 billion per year to California publishers. Google disagrees with Schiffrin's findings. A spokesperson said news queries account for under 2 per cent of all searches and that Google doesn't make money on them. Why do journalists and labour unions oppose the agreement? The Media Guild of the West, a union representing journalists in Southern California, Arizona and Texas, said journalists were locked out of the conversation. The union was a champion of Wicks' bill but wasn't included in the negotiations with Google. "The future of journalism should not be decided in backroom deals," a letter by the union sent to lawmakers reads. "The Legislature embarked on an effort to regulate monopolies and failed terribly. Now we question whether the state has done more harm than good." The agreement results in a much smaller amount of funding compared to what Google gives to newsrooms in Canada and goes against the goal to rebalance Google's dominance over local news organisations, according to a letter from the union to Wicks earlier this week. Others also questioned why the deal included funding to build new AI tools. They see it as another way for tech companies to eventual replace them. Wicks' original bill doesn't include AI provisions. The deal has the support of some journalism groups, including California News Publishers Association, Local Independent Online News Publishers and California Black Media. What's next? The agreement is scheduled to take effect next year, starting with USD 100 million to kickstart the efforts. Wicks said details of the agreement are still being ironed out. California Gov. Gavin Newsom has promised to include the journalism funding in his January budget, Wicks said, but concerns from other Democratic leaders could throw a wrench in the plan. (AP) PY PY

Why journalists oppose Google's funding of California newsrooms

Google will soon give California millions of dollars to help pay for local journalism jobs in a first-in-the-nation deal, but journalists and other media industry experts are calling it a disappointing agreement that mostly benefits the tech giant. The agreement, which was hashed out behind closed doors and announced this week, will direct tens of millions of public and private dollars to keep local news organizations afloat. Critics say it's a textbook political maneuver by tech giants to avoid a fee under what could have been groundbreaking legislation. California lawmakers agreed to kill a bill requiring tech to support news outlets they profit from in exchange for Google's financial commitment. By shelving the bill, the state effectively gave up on an avenue that could have required Google and social media platforms to make ongoing payments to publishers for linking news content, said Victor Pickard, professor of media policy and political economy at the University of Pennsylvania. California also left behind a much bigger amount of funding that could have been secured under the legislation, he said. "Google got off easy," Pickard said. Google said the deal will help both journalism and the artificial intelligence sector in California. "This public-private partnership builds on our long history of working with journalism and the local news ecosystem in our home state, while developing a national center of excellence on AI policy," Kent Walker, president of global affairs and chief legal officer for Google's parent company Alphabet, said in a statement. State governments across the U.S. have been working to help boost struggling news organizations. The U.S. newspaper industry has been in a long decline, with traditional business models collapsing and advertising revenues drying up in the digital era. As news organizations move from primarily print to mostly digital, they have increasingly relied on Google and Facebook to distribute its content. While publishers saw their advertising revenues nosedive significantly in the last few decades, Google's search engine has become the hub of a digital advertisement empire that generates more than $200 billion annually. The Los Angeles Times was losing up to $40 million a year, the newspaper's owner said in justifying a layoff of more than 100 people earlier this year. More than 2,500 newspapers have closed since 2005, and about 200 counties across the U.S. do not have any local news outlets, according to a report from Northwestern University's Medill School of Journalism. California and New Mexico are funding local news fellowship programs. New York this year became the first state to offer a tax credit program for news outlets to hire and retain journalists. Illinois is considering a bill similar to the one that died in California. Here's a closer look into the deal California made with Google this week: