Google’s $125 million deal with California for local news already shrinking

A Google figures center in Iowa File photo courtesy Google A controversial million deal California struck with Google last year to prop up the state s struggling journalism industry is already on track to shrink before any of the money has been delivered to news outlets The deal stated last August committed California and Google to each put tens of millions of dollars into a fund to be distributed to local news outlets over five years In exchange lawmakers scrapped two ambitious proposals that sought to force the search engine behemoth and its tech counterparts to pay outlets for using their published content But Gov Gavin Newsom on Wednesday proposed to slash the state s initial commitment to the journalism fund by two-thirds Department of Finance spokesperson H D Palmer wrote in an email that the administration is seeking to reduce the state s first-year payment of million to million solely because of fewer support than projected in the January budget The cut is part of Newsom s May budget proposal in which he s seeking to close an estimated billion shortfall for the - fiscal year that begins in July The proposal to reduce the state s share of the funding outraged local news advocates and proponents of requiring tech platforms to pay journalism outlets for their content who already called last year s deal insufficient It raises questions about Google s commitment to paying its share of the matching funds and the overall status of the agreement which was informed in August but appears to have made little progress toward becoming reality There were no signed term sheets in Google s handshake deal with the state and with lawmakers last year only general promises It s extremely disappointing mentioned Steven Waldman president of the journalism advocacy group Rebuild Local News It was already too small and they ve walked in the wrong direction from it at a time when the collapse of society news in California continues Pink slime and rumor and misinformation is flooding into the vacuum so time is of the essence to try to turn this around Instead the effort is shrinking A draft of the deal issued last year suggested UC Berkeley would administer the funding scheme the university has since declined to do so and the state has not reported a new administrator As a outcome Google also does not appear to have made its first-year payment of million toward the fund Waldman announced The deal did not include strict timelines but proponents explained they aimed to front-load much of the money in the first year which they considered could garner more private contributions along the way Deal struck after millions in lobbying from Google Neither Newsom s office nor Google responded to inquiries The Computer and Communications Industry Association a lobbying group that last year was largely bankrolled by Google to oppose the news bills declined to comment Google s payments to influence state lawmakers surged to almost million from July through September last year when the bills were under consideration times more than it has ever spent on lobbying in California over the same period of time A spokesperson for Assemblymember Buffy Wicks who negotiated the deal last year in exchange for abandoning her bill that would have required platforms such as Google and Meta to either pay a fee or negotiate with news outlets for using their news content commented there would be more information to share on this in the coming days Wicks in a message did not address the proposal to cut state funding Instead the Oakland Democrat thanked Newsom for for making an essential masses commitment that strengthens journalism and described the funding as a down payment combined with those of private and philanthropic partners After the first-year payments Google and the state both were to put million a year into the fund for four more years The company also agreed to continue paying million a year in existing grants to newsrooms money it had threatened to withhold if the regulation passed And it planned to put million into an unspecified artificial intelligence plan that had given specific journalists and their union representatives anxiety over job losses Now Waldman is worried the state s reduction in funding could prompt the company to do the same As part of the deal Google specified it would only pay into the journalism fund as a match to state dollars disclosed former Sen Steve Glazer the author of the other bill that was scrapped They did not want a precedent to be set in California that could be easily replicated in other states so they insisted upon a state match he stated The fact that the governor is proposing to renege on part of the deal is a cherry on top for Google and it allows them to reduce their contribution if they desire Glazer s bill would have imposed a fee on major tech platforms to provide news outlets a tax credit to employ local journalists The measure legislative staff estimated would have raised million a year Wick s bill requiring the platforms to negotiate payments to news outlets was modeled on similar programs in Canada and Australia but the political headwinds were tough in the tech companies home state Lawmakers pursued both proposals to try to stem the decline of the news industry in California Following a nationwide trend media companies have hemorrhaged jobs over the past two decades as advertisers fled print media for the internet and technological advancements reshaped how readers consume news The state has lost one-third of its newspapers since in a trend experts say worsens civic engagement polarization and misinformation To try to keep their readers publications increasingly rely on social media and online search Google controls the lion s share of search in a way the U S Justice Department and one federal judge have explained violates antitrust law CalMatters is a residents interest journalism venture committed to explaining how California s state Capitol works and why it matters CalMatters CEO Neil Chase was involved in the 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