Gavin Newsom is touting a deal to help California journalism. He killed a better one | Opinion

Media companies like ours have not done a good job of explaining to our readers why years of job reductions, newspaper closures, sales and mergers have resulted from fundamental changes in how we generate revenue and take our journalism to market.

The painful reductions in the size of local newsrooms have not been a consequence of consumer backlash over political ideology or a lack of reader interest in news content. The driving force has been dwindling revenues for media companies on digital platforms controlled by monopolies like Google and Meta.

California had a chance to level the playing field and support local journalism by compelling Big Tech to pay news outlets a fairer share of advertising revenues. But a promising deal to address what ails California journalism was abandoned this week.

For now, Google — with its $237 billion in 2023 ad revenues — will not be forced to fairly compensate news organizations for the content that they produce. In Canada, Google pays news outlets $100 million a year, but under a new deal announced this week and touted by Gov. Gavin Newsom, Google will contribute a fraction of that to local journalism in California. Under the agreement, the state has also pledged to contribute unbudgeted taxpayer dollars to newsrooms.

If you missed the news of this, you are not alone. It was rolled out via press release Wednesday afternoon, virtually drowned out by the Democratic National Convention, which many key California state and legislative leaders were attending in Chicago.

The agreement, which calls for $242.5 million to be distributed to California newsrooms over five years, is better than nothing. The funds will provide a boost to local journalism in the state. But Google’s contribution is a relative pittance and represents only a fraction of the benefit it derives from news outlets’ content.

While Newsom celebrated this half measure, this was hardly a profile in courage for our governor, who showed no inclination to push for a lasting fix in a broken marketplace.

“This agreement, unfortunately, seriously undercuts our work toward a long-term solution to rescue independent journalism,” wrote state Sen. Steve Glazer, D-Contra Costa. “There is a stark absence in this announcement of any support for journalism from Meta and Amazon. These platforms have captured the intimate data from Californians without paying for it. Their use of that data in advertising is the harm to news outlets that this agreement should mitigate.”

In the digital space, companies such as Google control advertising revenues that should flow to news creators like the journalists who work for McClatchy and other news companies large and small. When Assemblymember Buffy Wicks, D-Oakland, began advancing first-of-its-kind legislation that would have forced Google and others to share ad revenues with news outlets, Google responded like the bad actor that it is.

First, Google began removing California news links from some search results. Then, when Wicks signaled that she was not intimidated, we began to see a flurry of television commercials wholly misrepresenting what Wicks was trying to do.

Her bill, AB 886, the California Journalism Preservation Act, would have established a system of revenue-sharing where news creators would be paid for their work through an arbitration process. Glazer’s bill, SB 1327, would have taxed digital advertising revenue to provide newsrooms with funds via a tax credit. Wicks’ legislation was killed by Newsom’s deal, while Glazer has said he is unsure whether his bill will be addressed before the legislature adjourns on Aug. 31.

According to The Bee’s reporting, the deal struck this week “calls for Google to pay $15 million for the journalism fund in 2025 and a minimum of $10 million a year through 2029, for a minimum total of $55 million. The state would pay $30 million in 2025 and then $10 million a year through 2029, for a total of $70 million. Additional funding will go toward ‘existing journalism programs’ for a total of $180 million, according to the agreement. ... Then, $62.5 million, which is exclusively tech money and includes no state funds, will go toward creating a nonprofit to administer an AI accelerator project, for a grand total of $242.5 million.”

What kind of AI accelerator project? We don’t know. Where, exactly, will the state money come from? We don’t know.

In Canada, legislators stood up to Google, and the result was a deal, reached last year, where Google pays $100 million per year to Canadian news outlets.

“In Canada, the Online News Act has provided a lifeline for many news organizations,” wrote Benoit Chartier, a Canadian publisher, in The Bee on Aug. 15. “This financial support is not a handout; it is a recognition of the vital role that journalism plays in a democratic society. It’s also a recognition of the vital role that our news stories play in making Google and Meta two of the largest companies in the world.”

A similar deal in California would have been vital for media outlets operating amid job reductions that result from the digital economics starving the journalism industry. Earlier this year, the Los Angeles Times laid off 20% of its newsroom. The threat of layoffs will hang over all newsrooms, whether for-profit or nonprofit, until we resolve the issue of news creators being paid fairly for their work.

Journalism and a free press are what distinguish our nation from Russia and Iran, but journalists can’t work if they aren’t paid. McClatchy’s California Opinion team supported AB 886, as did McClatchy, the parent company of The Sacramento Bee, The Modesto Bee, The Fresno Bee, Merced Sun-Star and San Luis Obispo Tribune. So did the California News Publishers Association and many news outlets across the state.

Wicks has pledged that the vague deal announced by Newsom this week is only the beginning. We hope she’s right.

Maybe it will take a different governor in California to confront monopolies like Google and Meta. Newsom will be out of office in a little more than two years, which, unfortunately, is plenty of time for more communities to lose their local news outlets and more journalists to lose their jobs.

This editorial represents the views of the editorial boards at The Sacramento Bee, Fresno Bee, Modesto Bee, Merced Sun-Star and The Tribune in San Luis Obispo.

This story was originally published August 24, 2024 at 7:00 AM.