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Google Agreed To Pay Millions For California News. Journalists Call It A Bad Deal
SACRAMENTO, CA – Google will soon give California millions of dollars to help pay for local journalism positions in a first-of-its-kind pact, but journalists and other media industry professionals call it a disappointing agreement that mostly favors the tech behemoth.
The pact, reached behind closed doors and unveiled last week, will allocate tens of millions of public and private cash to keep local news organizations afloat. Critics argue that it is a textbook political maneuver by internet titans to dodge a tax under what could have been historic legislation. California lawmakers decided to scrap a bill forcing tech companies to support the news outlets they profit from in exchange for Google’s financial commitment.
According to Victor Pickard, a professor of media policy and political economy at the University of Pennsylvania, by delaying the bill, the state effectively abandoned an avenue that may have obliged Google and social media platforms to provide recurring payments to publishers for linking to news material. He added that California also left behind a significantly larger sum of money that could have been secured under the legislation.
Google Agreed To Pay Millions For California News. Journalists Call It A Bad Deal
“Google got off easy,” Pickard explained.
Google stated that the agreement would benefit both the media and the artificial intelligence sector in California.
“This public-private partnership builds on our long history of working with journalism and the local news ecosystem in our home state, while developing a national centre of excellence on AI policy,” Kent Walker, president of global affairs and chief legal officer at Google’s parent company Alphabet, said in a statement.
State governments around the United States have been working to support faltering news organizations. The newspaper industry in the United States has declined for many years, with traditional economic models crumbling and advertising revenues drying up in the digital age.
As news organizations shift from print to digital, they increasingly rely on Google and Facebook to deliver their material. While publishers’ advertising earnings have plummeted over the previous few decades, Google’s search engine has become the center of a digital advertising empire worth more than $200 billion annually.
According to its owner, the Los Angeles Times was losing up to $40 million a year, which justified laying off more than 100 people earlier this year.
According to a report from Northwestern University’s Medill School of Journalism, more than 2,500 newspapers have disappeared since 2005, and around 200 counties in the United States lack local news outlets.
California and New Mexico are financing local journalism fellowship programs. This year, New York became the first state to offer a tax credit program to help news outlets attract and retain journalists. Illinois is exploring legislation identical to the one that was lost in California.
Here’s a closer look at the agreement California reached with Google this week:
What does the agreement entail?
The $250 million deal will finance two efforts: journalism projects and a new AI research program. The pact only guaranteed funds for five years.
Google will provide approximately $110 million, with the state budget contributing $70 million, to increase journalism career opportunities. The fund will be overseen by UC Berkeley’s Graduate School of Journalism. According to Assemblymember Buffy Wicks, who arranged the agreement, Google will also contribute $70 million to fund the AI research initiative, which would develop tools to help tackle “real-world problems. ”
The agreement is not a tax, which is a striking contrast to a law Wicks proposed that would have imposed a “link tax” mandating corporations such as Google, Facebook, and Microsoft to pay a proportion of advertising revenue to media organizations in exchange for connecting to their material. The plan was patterned after Canadian legislation requiring Google to pay approximately $74 million annually to fund journalism.
Why are tech corporations agreeing on this now?
Tech companies have spent the previous two years battling Wicks’ measure, mounting costly opposition campaigns and airing advertisements criticizing the law. In April, Google threatened to temporarily restrict news websites from some California consumers’ search results. The bill has been moving forward with bipartisan backing until this week.
Wicks told The Associated Press on Thursday that she saw no way forward with her measure and that the funds obtained under the agreement “are better than zero.”
“This represents politics is the art of the possible,” the politician stated.
Google Agreed To Pay Millions For California News. Journalists Call It A Bad Deal
“Google cannot exit from news because they need it,” said Anya Schiffrin, a Columbia University professor who studies global media and co-wrote a working paper on how much Google and Meta owe news publishers. “So what they are doing is using a whole lot of different tactics to kill bills that will require them to compensate publishers fairly.”
She calculates that Google owes California publishers $1.4 billion each year. Google disagrees with Schiffrin’s conclusions. According to a spokeswoman, news queries make up less than 2% of all searches and do not generate revenue for Google.
Why are journalists and labor unions opposing the agreement?
The Media Guild of the West, a union representing journalists in Southern California, Arizona, and Texas, stated that journalists were excluded from the discourse. The union supported Wicks’ bill but was not involved in the negotiations with Google.
“The future of journalism should not be decided in backroom deals,” the union’s letter to lawmakers states. “The Legislature tried unsuccessfully to restrict monopolies. Now we wonder if the state has caused more harm than good.”
According to a letter from the union to Wicks earlier this week, the arrangement results in significantly less cash than Google provides to Canadian newsrooms and contradicts Google’s goal of rebalancing its control over local news organizations.
Others questioned why the agreement contained funds to develop new AI tools. They view it as another opportunity for tech corporations to eventually replace them. Wicks’ original bill did not include AI provisions.
Some news organizations, including the California News Publishers Association, Local Independent Online News Publishers, and California Black Media, have supported the pact.
What happens next?
The pact is set to take effect next year, with $100 million to jumpstart the efforts.
Wicks stated that the terms of the arrangement are still being worked out. According to Wicks, California Gov. Gavin Newsom has committed to including journalistic financing in his January budget, but reservations from other Democratic leaders may jeopardise the proposal.
SOURCE | AP
