In late August, Google secured a deal with California Gov. Gavin Newsom (D) and Assemblywoman Buffy Wicks to support the state’s struggling journalism industry. Under the agreement, Google will spend $110 million over five years on local journalism in California, but demanded that the state contribute an additional $70 million to the fund, even as it faced a challenging budget deficit. The deal fell far short of more aggressive legislation proposed earlier by Wicks and another lawmaker, which would have charged Google hundreds of millions annually to support journalism in the state.
The agreement helped Google avoid a costly outcome that could have set a precedent for other states considering what Silicon Valley owes struggling news outlets. The University of California, Berkeley was initially named as a potential administrator of the new journalism fund, but later USC came under consideration for that role instead.
Many in California’s journalism industry criticized the state for not pushing Google for more money, arguing it was a missed opportunity to sustainably fund local news. Others maintained that the cash influx was the best outcome possible against one of the world’s most valuable companies, which had threatened to cut off news access for 40 million Californians if a deal wasn’t reached.
Google’s demand for taxpayer money aimed to establish a model it could point to in potential negotiations with other states seeking similar journalism deals. The company believes including public funds will dissuade other states from pursuing the more aggressive measures proposed in California.
The deal’s impact was limited by the lack of transparency and inclusion in the negotiation process. Few California news publishers, unions or interest groups were consulted, and some of those involved had ties to Google. The company is a major backer of several journalism organizations involved in the talks.
Read more at Bloomberg here.