Google is currently in negotiations with the California government to potentially invest $110 million to support the struggling news industry in the state. However, there’s a catch: taxpayers would need to contribute $70 million to make this happen.
Buffy Wicks, a Democratic Assembly member from Oakland who is involved in these discussions, reached out to Governor Gavin Newsom’s office to seek his support for this taxpayer contribution, even as California grapples with a significant budget deficit. Reports indicate that an agreement was reached verbally between Google, the governor, and Wicks at the end of August, but while there is a written framework in place weeks later, several key terms are still under negotiation.
Wicks underscored that this framework represents the most impactful agreement possible under the current political climate. “This is just the beginning, and we hope it supports California’s workforce in journalism,” she said.
However, despite the excitement surrounding this announcement in August, it wasn’t clear at the time that Google’s commitment hinged on receiving government funding. Google’s insistence that taxpayers contribute to the initiative may set a precedent for negotiations in other states aiming for similar agreements. Additionally, there have been surprises regarding the potential management of the news fund, specifically concerning Berkeley and USC’s discussions about taking on this role.
While Wicks, Google, and the governor have been actively promoting this agreement, many California journalists are criticizing the deal for failing to secure more funding from the tech giant. Some perceive this cash injection as the best outcome possible while negotiating with one of the world’s most valuable companies.
Neil Chase, the CEO of the California nonprofit news organization CalMatters, remarked that he doesn’t believe technology companies are creating better technologies; rather, they are endangering the viability of newspaper advertising.
The U.S. newspaper industry has faced a persistent downturn over the past few decades, as traditional advertising has shifted to digital platforms. Meanwhile, companies like Google and Facebook provide news for free while selling advertising. A report from Northwestern University’s journalism school indicates that since 2005, over 2,900 newspapers—mostly local weeklies—have been shuttered due to falling revenues.
Legislators and nonprofits have been working diligently to find ways to support the local news industry, emphasizing its importance to a thriving democratic society. However, there’s significant disagreement on the best path forward.
In California, two legislative bills have been introduced aimed at raising funds from Google and other tech companies to sustain the state’s news industry. Senator Steve Glazer has proposed a ‘link tax’ on companies like Amazon, Meta Platforms Inc., and Alphabet, Google’s parent company. The funds generated would be used for a $500 million tax credit distributed to news media that employ California journalists. Similarly, Wicks has drafted legislation to charge companies like Google and Meta for producing news and selling advertising in California.
