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.