SACRAMENTO, California — Google will soon give California millions of dollars to help pay for local journalism jobs in a first in the nationbut journalists and other media industry experts are calling it a disappointing deal that largely benefits the tech giant.
The deal, worked out behind closed doors and announced this week, will free up tens of millions of public and private dollars to keep local news organizations afloat. Critics say it’s a textbook example of a political maneuver by tech giants to avoid paying compensation under what could have been landmark legislation. California lawmakers voted to scrap a bill technology needed to support news channels from which they benefit in exchange for Google’s financial contribution.
By shelving the bill, the state essentially gave up a provision that could have required Google and social media platforms to make ongoing payments to publishers for linking to news content, said Victor Pickard, a professor of media policy and political economy at the University of Pennsylvania. California also left behind a much larger amount of funding that could have been secured under the legislation, he said.
“Google got off easy,” Pickard said.
According to Google, the deal will benefit both the journalism and artificial intelligence sectors 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 in AI policy,” said Kent Walker, president of Global Affairs and chief legal officer for Google’s parent company Alphabet, in a statement.
Governments in the US have been working to help struggling news organizations. The US newspaper industry has long been in decline, with traditional business models collapsing and advertising revenues drying up in the digital age.
As news organizations move from primarily print to primarily digital, they have become increasingly dependent on Google and Facebook to distribute their content. While publishers have seen their advertising revenues decline significantly over the past few decades, Google’s search engine has become the centerpiece of a digital advertising empire that generates more than $200 billion annually.
The Los Angeles Times lost to $40 million per yearthe newspaper’s owner said in justifying the layoff of more than 100 people earlier this year.
According to a report from Northwestern University’s Medill School of Journalism, more than 2,500 newspapers have closed since 2005 and about 200 counties in the U.S. have no local news organizations.
California and New Mexico fund local news fair programs. New York became the first state to offer a tax credit program for news organizations to hire and retain journalists. Illinois is considering a bill similar to the one that died in California.
Below is a closer look at the deal California struck with Google this week:
The deal, which totals $250 million, will provide money for two endeavors: funding for journalism initiatives and a new AI research program. The agreement only guarantees funding for a five-year period.
About $110 million will come from Google and $70 million from the state budget to boost journalism jobs. The fund will be administered by UC Berkeley’s Graduate School of Journalism. Google will also contribute $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, a marked departure from a bill Wicks drafted that would have imposed a tax “link tax” companies like Google, Facebook and Microsoft to pay a certain percentage of advertising revenue to media companies for linking to their content. The bill is modeled after a policy adopted in Canada for which Google has to pay about $74 million a year to fund journalism.
Tech companies have fought Wicks’ bill for the past two years, launching expensive opposition campaigns and running ads attacking the legislation. Google threatened to sue in April temporarily block news websites of some users’ search results in California. The bill moved forward with bipartisan support — until this week.
Wicks told The Associated Press on Thursday that she saw no way out of her bill and that the funding secured through the deal is “better than zero.”
“This represents politics as the art of the possible,” she said.
Industry experts see the deal as a strategy Google has used globally to circumvent regulations.
“Google can’t get out of news because they need it,” said Anya Schiffrin, a professor at Columbia University who studies global media and co-authored a working paper on how much Google and Meta owe news publishers. “So what they’re doing is using a bunch of different tactics to try to stop legislation that would require them to compensate publishers fairly.”
She estimates that Google owes $1.4 billion a year to publishers in California.
The Media Guild of the West, a union representing journalists in Southern California, Nevada and Texas, said journalists were being left out of the conversation. The union was a champion of Wicks’ bill but was not included in the negotiations with Google.
“The future of journalism should not be decided in backroom deals,” the union said in a letter to lawmakers. “The Legislature began by attempting to regulate monopolies and failed miserably. Now we are left wondering 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 runs counter to the goal of restoring Google’s dominance over local news organizations, according to a letter the union wrote 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 eventually replace them. Wicks’ original bill did not include any AI provisions.
The deal is supported by a number of journalism groups, including California News Publishers Association, Local Independent Online News Publishers and California Black Media.
The agreement is set to take effect next year and will provide $100 million in seed funding to kick-start work.
Wicks said the details of the agreement are still being worked out. California Gov. Gavin Newsom has promised to include journalism funding in his January budget, Wicks said, but concerns from other Democratic leaders could derail that plan.