Google follows Newsom in reducing support for California local news

Google will pay $5 million less than it promised to a fund intended to help struggling California news outlets stay afloat, less than a year after committing to pay $15 million.

The company will now pay $10 million into the initiative to fund local news which will be distributed among California news publishers, according to the office of Assemblymember Buffy Wicks, who has been involved in setting up the program.

The announcement Wednesday came a week after Gov. Gavin Newsom proposed cutting the state’s own share of the first-year commitment to $10 million from $30 million, as California faces a $12 billion budget deficit.

The new California Civic Media Fund will be administered by the California State Library, which will set up a board of publisher representatives to determine how to distribute it with the goal of “sustaining and enhancing community news coverage in California,” according to a news release from Wicks’ office. The library will also assess the regional availability of news coverage across California to help divvy up the money.

Library officials will oversee the fund’s public dollars to provide public oversight, while Google’s share of the money will be housed in a separate nonprofit.

“Sustaining local journalism will take all of us — government, philanthropy, and the tech sector — stepping up together,” said Wicks.

Proponents of the new program described the money as “seed funding” and said it would attract other donations from philanthropies interested in funding local journalism — a shift from lawmakers’ initial efforts to fund local news through regulations on the tech sector. Google said it would contribute more money if the state receives private donations.

Jaffer Zaidi, a vice president at Google’s parent company Alphabet said in the release that the company is “committed” to the agreement it made last year.

Google and California both pledged much more

In their original agreement, the state and Google each agreed to pay $10 million into the fund annually for four more years, for a total of $125 million. The funding now pledged amounts to less than half of what was promised for the program’s first year. The amount paid in future years could still change, depending on the state budget.

The tech titan agreed to the deal last August, having spent a record sum to lobby California lawmakers as they considered two bills that would have forced the company to pay to use news outlets’ published content.

Advocates for publishers and local news have honed in on the search engine’s ability to profit from links and snippets of news content as one factor that has diminished the news industry nationwide over the past two decades. California has lost one-third of its newspapers since 2005, in a trend experts say worsens civic engagement, polarization and misinformation.

In exchange for lawmakers killing the bills last year, the company agreed to instead help the state start a fund that would have given $125 million to news outlets across California over five years. Most of that money would have come from state taxpayers, while Google also agreed to continue paying its existing grants to news organizations and to pour tens of millions of dollars into an unspecified new artificial intelligence program.

The company will continue paying those grants, Wicks said Wednesday.

Proponents of the legislation, including news publishers, journalists’ unions and local news advocates, criticized the handshake deal for being too modest. By contrast, one of the bills would have garnered about $500 million a year in fees from Google and other platforms that link to news content, to pay for a tax credit for local journalists.

Wicks, the author of the other bill which would have required Google, Meta and other platforms to negotiate payments directly with news outlets, said the deal was the best possible outcome in the face of stiff tech industry opposition.

When Newsom announced the state would reduce its share of funding for the new program last week, it gave Google the opportunity to do the same: The company had only agreed to put money into the fund as a match to state dollars.

CalMatters CEO Neil Chase was involved in a deal as a board member for Local Independent Online News Publishers. His views do not necessarily reflect those of the organization, newsroom or its staff.

This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.