Google, a news industry trade group and key California lawmakers announced a first-in-the-nation agreement on Wednesday aimed at shoring up newsrooms in the state with as much as $250 million.
Through a mix of funding from Google, taxpayers and potentially other private sources, the five-year deal would let Google avert a proposed state bill that could force tech companies to pay news organizations when advertising appeared alongside articles on the tech company’s platform.
The announcement was packed with praise for the effort to stabilize the news industry, which has faced layoffs and shuttered newsrooms as readership has shifted online.
“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,” Gov. Gavin Newsom said in a statement.
The trade group, the California News Publishers Association, called the agreement “a first step toward what we hope will become a comprehensive program to sustain local news in the long term.” The author of the bill, Assemblymember Buffy Wicks, praised it for being a “cross-sector commitment” and called it “just the beginning.”
A union representing journalists, however, denounced the deal as a “shakedown,” and lawmakers who had been working for months on more comprehensive proposals criticized its scope. Also, the president pro tempore of the State Senate, Mike McGuire, questioned legislative support for the state’s share of the deal, which would require approval as part of the annual budget process.
“We have concerns that this proposal lacks sufficient funding for newspapers and local media, and doesn’t fully address the inequities facing the industry,” said Senator McGuire, a Democrat. He added that “the Senate was pursuing a global solution that would hold all of these companies accountable.”
The deal would establish a News Transformation Fund administered by the Graduate School of Journalism at the University of California, Berkeley, to preserve and expand California-based journalism. Twelve percent of the funding for the News Transformation Fund would be reserved for locally focused publications and those aimed at underrepresented groups.
Under the agreement, California taxpayers would provide the new fund $30 million in the program’s first year and $10 million in each of the next four years, to be allocated by the Legislature in budget bills. Google would contribute $15 million to the fund in the first year and at least $10 million in each of the following years, according to a summary provided by Ms. Wicks’s office.
Google would also provide $62.5 million over five years to create a National A.I. Innovation Accelerator, which would provide “organizations across industries and communities” with funding and other support to experiment with artificial intelligence “to assist them in their work,” according to the announcement. And the company would maintain $10 million a year in existing programs it has to support journalism.
For two years, Google had resisted the bill, saying it would create “uncapped financial exposure” and “a level of business uncertainty that no company could accept.”
Kent Walker, chief legal officer for Google’s parent company, Alphabet, called the agreement “a collaborative framework to accelerate A.I. innovation and support local and national businesses and nonprofit organizations.”
The Media Guild of the West, a local of the NewsGuild union, denounced the deal as “vague” and “opaque.”
“Not a single organization representing journalists and news workers agreed to this undemocratic and secretive deal with one of the businesses destroying our industry,” it said.
And Senator Steve Glazer, a Democrat who has sought to give news outlets a tax credit to employ local journalists, paid for with a fee on major tech platforms, said the deal gave Google a bargain; overlooked similar incursions on local news funding by other tech titans, such as Amazon and Meta; and “seriously undercuts our work toward a long-term solution to rescue independent journalism.”
“Despite the good intentions of the parties involved, this proposal does not provide sufficient resources to bring independent news gathering in California out of its death spiral,” he said.
Google has regularly said it is “one of the world’s biggest financial supporters of journalism.” Publishers get traffic from its ubiquitous search engine, it has said, and can monetize their businesses with Google technology that lets them find advertisers.
But the company has usually drawn the line at government regulations that have tried to force it to compensate publishers. Google fought bills in Australia and Canada that would have compelled such payments, arguing that paying for clicks went against the spirit of the open web. In 2021, the company threatened to leave Australia if it went ahead with its news media bargaining code.
Eventually, the company found a compromise. It rolled out News Showcase in Australia, a program in which it selects publishers to team up with and pay on its own terms. Google said it now had more than 180 publications on board in the country.
