California's Closed-Door Deal & the Fight for Local Journalism
Under the terms of this deal, Google’s contributions to local journalism fall well short of what once seemed possible.
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Since 2023, California has been on the frontlines of a policy debate taking place across the country: How can lawmakers help stem the relentless downward spiral of local journalism?
In the California legislative session that ended on Aug. 31, 2024, a series of committee hearings on two major bills came to naught. Then in late August, the nearly two-year saga ended with a thud: Lawmakers announced they had cut a deal with Google, hammered out behind closed doors, that sold both California’s communities and journalists short.
The complete details of the agreement have yet to be released, but reports indicate that Google and the state of California will both contribute to a newly created fund to support local journalism. Google will commit a minimum of $55 million over the next five years to the fund, and the state will contribute a minimum of $70 million during the same time period. The deal also commits Google to contributing to an as-yet-undefined “AI accelerator” program. In exchange, lawmakers have pledged to shelve the two local-news bills under consideration, AB 886 and SB 1327.
Some newsrooms will benefit from this deal in the short term. But as Free Press Action and many others have noted, this is far from a viable long-term solution. As other states look to California as a model, it’s difficult to view this deal as anything less than a major disappointment. The funding provided is too low, the commitment to localism and diversity is too inadequate, and it seems unlikely that this will help plug the critical information gaps multiplying across the state. And those gaps are dire: Since 2004, the state has lost 25 percent of its newspapers, total-news circulation has plummeted more than 50 percent, and many ethnic-media outlets and nonprofit newsrooms have struggled to survive.
A broad range of stakeholders across California’s media landscape have slammed the ill-conceived deal, with journalists, union leaders, community publishers, academics, advocacy organizations and even some state lawmakers expressing frustration or outright opposition.
How did California get here — and what lessons can local-news advocates take from this disappointment?
The legislative push to support local journalism: AB 886 and SB 1327
In early 2023, Assemblymember Buffy Wicks introduced AB 886, also known as the California Journalism Preservation Act. The bill was partially modeled off the Journalism Competition and Preservation Act, a deeply flawed bill before Congress that would entrench the biggest commercial players without addressing the community-information crisis before us. The core idea at the heart of both bills is that platforms like Google and Meta should compensate news publishers for sharing and accessing their content.
This approach has troubling roots: In Australia, Rupert Murdoch’s News Corp. joined two of its largest competitors in 2021 to push for the passage of a law that forced platforms to negotiate with news outlets if they wanted to share links to their stories. Canada followed suit with similar legislation, and in both countries, early results indicate that corporate media giants were the prime beneficiaries while smaller community publishers were further sidelined.
AB 886 moved quickly out of the gate in 2023, flying through the Assembly with the backing of the state’s largest commercial media players. But over the summer a coalition of community publishers, open-internet groups and local media leaders highlighted fundamental issues with the bill’s approach and succeeded in slowing the legislation’s momentum. In November 2023, Free Press Action released Crumbs for California, research that showed how wealthy broadcasters, corporate chains and hedge funds would reap the lion’s share of the bill’s benefits — leaving smaller community newsrooms with the scraps.
The bill’s sponsors took heed of this opposition and scheduled an additional hearing to solicit further input on the legislation.
That brings us to 2024. Two things happened to shift the debate in the legislature: First, AB 886 was amended to better target its benefits toward local journalists and remove measures that would have incentivized clickbait — an improvement, though the biggest winners would still have been the largest commercial media entities.
Second, Sen. Steve Glazer introduced a local-news bill of his own: SB 1327. This legislation would have imposed a fee on major tech platforms’ advertising revenue to help support the production of local news. The revenue generated — estimated to be $500 million annually — would have provided outlets with an employment tax credit to cover a portion of employees’ wages and would have supported UC Berkeley’s California Local News Fellowship program, which Glazer drove to create in 2022.
In short, Glazer’s bill — with its emphasis on supporting small local outlets across the state — could have spurred the hiring and retention of journalists at a time when newsroom job losses have reached crisis levels. SB 1327 did have its shortcomings: For example, there was no cap on the benefits that wealthy broadcasters and corporate media giants could siphon up, and more could have been done to prioritize ethnic-media outlets and nonprofit newsrooms. But it was undoubtedly the stronger of the two local-news bills and presented a cleaner path to redirect Big Tech revenues into local journalism.
The catch was that the legislation required a hefty two-thirds majority to pass under California law, since it would have created a new tax. But thanks to the efforts of local journalists, community publishers, public-interest groups, labor unions and grassroots advocates, it managed to secure the support it needed to advance out of the state Senate.
With summer drawing to a close, lawmakers now had two major bills before them that aimed to support the state’s local-news landscape.
From legislation to a backroom deal
Of course, neither bill ultimately moved forward. Gov. Gavin Newsom, apparently unwilling to levy a fee on the tech platforms, indicated that he would veto either bill if it made it to his desk. Meanwhile, the platforms had leveled up their attacks on the legislation. They launched robust lobbying and PR campaigns against both bills, threatened to halt existing contributions to local publishers in the state and removed links to California news sites as a warning shot.
In the face of this pressure, Assemblymember Wicks, the governor’s office, Google and the state’s largest news publishers agreed on a deal in negotiations that happened almost entirely behind closed doors, with little opportunity for community publishers, working journalists or community advocates to weigh in.
Given the opportunity, stakeholders would have highlighted the deal’s many flaws. For one, a good chunk of the funding from Google will go to an AI accelerator program that no organization representing journalists has asked for. Whatever the possible benefits for local journalism that AI might theoretically provide, it should not be a core piece of a deal meant to support California’s journalists and communities — especially when there’s such a startling lack of transparency surrounding its introduction into this framework.
More broadly, Google’s overall contributions fall well short of what seemed possible. The closest comparison can be found in Canada, where lawmakers struck a deal of their own with Google to support local news. Up north, the tech giant agreed to contribute $75 million a year to a local-news fund, a significantly higher figure than what California agreed to.
Lessons learned in the fight to save local journalism
California is a legislative proving ground. What happens in Sacramento often sets a precedent that other state lawmakers (and even federal ones) follow.
That means that it’s doubly important to figure out what lessons to draw from this disappointing saga. How did this end with almost no one satisfied, save maybe Google? How did such strong enthusiasm from a majority of lawmakers fizzle out so quickly? And how can future efforts to bolster local news avoid the same pitfalls?
Far more community engagement is needed — especially from the communities our media system fails to serve.
Lawmakers said many of the right things when describing the need to support local news. They emphasized how essential a robust local-media system is to our civic and democratic health, and highlighted how communities suffer when trusted information sources disappear.
But lawmakers did very little to actually engage communities. This was particularly true of the communities suffering the most under our failing local-media system: communities of color, non-English-speaking communities, low-income communities and rural communities.
The decline of local news is a community crisis, not just an industry crisis. Effective policy interventions must be backed up by extensive community-listening sessions and earnest efforts to figure out local-news consumers’ needs. This can help lawmakers build a fuller understanding of where help is most needed and open the door to broader and more powerful coalitions.
In the case of AB 886 in particular, which had the longer runway of the two local-news bills, this community engagement was largely absent. The core drivers from the beginning were large commercial publishers, and these same large publishers seemed to represent the journalism industry as a whole in the closed-door negotiations that led to the agreement with Newsom and Google. In many ways, it’s no surprise that the deal has left a significant number of journalism workers, small community publishers and community members unsatisfied — from the beginning, their perspectives were given short shrift.
Only a united front can overcome the influence of Big Tech and Big Media.
The past two years have made it abundantly clear that policy debates about the future of local news will increasingly hinge on Big Tech. Amazon, Google and Meta dominate the digital advertising market, stripping away a significant source of revenue for the media industry. Furthermore, these platforms dictate a significant portion of what people read and see in the news.
These tech platforms are, to state the obvious, a formidable economic and political force. This deal revealed with startling clarity that they have the means to simply buy their way out of regulation, a worrying reality for communities across the country.
If these platforms are going to leverage their might in local-news policy debates, our best shot at a fair fight is to build expansive and powerful community-rooted coalitions. When journalism workers and community members join together to advocate for policy change, they’re a force to be reckoned with.
We saw evidence of this with SB 1327: In the face of uphill odds, a coalition of organized labor, community publishers, community foundations and civil-society groups were able to secure the two-thirds majority needed to get the bill passed in the Senate. Our allies at Rebuild Local News in particular deserve mention for their role in bridging many of these groups.
Another powerful example can be found in New Jersey, when in 2018 Free Press Action organizers assembled a broad coalition of community leaders, community publishers and public-university stakeholders to spur the creation of the New Jersey Civic Information Consortium, a public grantmaking body focused on addressing community-information gaps. This victory was possible only because advocates created an organizing infrastructure that allowed journalists and community members to stand together in the face of well-funded special-interest groups.
Corporate media interests, however, too often defined the policy debate in California. A large concern from the beginning of this process — and a critical flaw in the bargaining-code approach at the heart of the bills in Australia, Canada, California and the U.S. Congress — is that it puts the largest corporate publishers in a cage match with Big Tech platforms. Instead of having a conversation about how to most effectively support working journalists and plug community-information gaps, lawmakers are facilitating a debate over how much money Big Tech owes Big Media.
At best, this represents a trickle-down approach to bolstering local news. At worst, it leaves journalists and community members in the cold while industry executives line their pockets. Community needs and security for journalism workers simply have to be the focal points of local-news policy debates if we’re to attain the kind of structural, long-lasting change that’s needed in our media system. Otherwise, lawmakers will find themselves overseeing a tug of war between two industries while the local-news ecosystem crumbles under our feet.
Community publishers and civic-media outlets can’t be left behind
Larger commercial outlets will always have a role to play in the local-media landscape. But lawmakers cannot view their role as simply propping up the same corporate players that have long dominated the local-news space — and that bear some responsibility for the collapse of local journalism. Smaller community publishers, nonprofit outlets, civic-media outlets and ethnic-media newsrooms are by and large the entities that are working hardest to plug the gaps left behind by the collapse of commercial journalism — and they’re often closest to the communities they’re serving.
As such, they should be a focal point of any policy intervention. Unfortunately, the deal that California ultimately got fell far short in this regard. While smaller newsrooms may receive some short-term benefits, there isn’t nearly enough emphasis on uplifting smaller outlets in underserved communities, with no clear explicit benefits for ethnic-media outlets in particular. In a state where more than 40 percent of the population speaks a language other than English at home — where many ethnic-media outlets have had to scratch and claw for financial survival — that outcome is hard to swallow.
This can be explained in part by a simple reality: There was no established structure in this process to collectively raise up the voices of smaller civically minded, community-rooted publishers and journalists. Corporate publishers were represented and newspaper associations were represented. Even media workers at medium and large publications had a voice, thanks to the efforts of the Media Guild of the West, which has played a key role in local-news policy efforts. State-based groups like California Black Media, Ethnic Media Services and Latino Media Collaborative engaged with lawmakers as well, and national entities like LION were able to weigh into the policy debate.
But there was no existing infrastructure in place to unify the voices of community-centered California media leaders, back them up with the support of community members, and elbow into the circle of key players defining this debate. As a result, the discussion of how lawmakers could best support local news too often happened in silos, with a fractured landscape of perspectives and needs. The corporate media players — well-funded and connected — were able to emerge as the defining voices in this confusing environment.
Changing the balance of power in policy debates about local journalism
The faulty deal in California revealed a simple truth: Big Tech and Big Media have more power than community voices when it comes to these kinds of policy debates. As long as that remains true, legislative outcomes will continue to disappoint.
Correcting that imbalance of power won’t be easy, but it can be done. Because underneath all the varying needs in the journalism world, we know that the interests of media workers, local publishers and community members alike are broadly aligned. When we have an abundance of resources to create and distribute local news, we can address community-information needs, support a healthy labor force and bolster our democracy.
If media workers and community leaders can align behind a popular agenda for local news that decenters corporate profit-chasing and calls for responsible public funding, we can begin to work toward a future that works for all of us, not just a select few at the top. That’s what we’re hoping to help build at Free Press Action with the Media Power Collaborative, which is putting the finishing touches on a policy platform for local news.
If we can agree on a baseline set of values to guide policy interventions for local news, we can start building community coalitions that are truly capable of standing up to corporate interests and laying the groundwork for a transformed local-news system. It’s a big goal, but as the struggle for financial stability in journalism continues, it just might be our best shot at long-term sustainability.