As the saying goes, WHEN WE FIGHT, WE…
…achieve some incremental progress!
That’s how we feel about the local news deal that was recently announced in California. Google agreed to put money into a special fund for local newsrooms, in exchange for the legislature nixing bills that would have made it pay even more.
To understand why it was less than it should have been, remember that the number of journalists in California dropped 68 percent in less than two decades, according to the Medill School of Journalism. That’s roughly 5,000 reporters gone, meaning more corruption, less accountability and more polarization.
To approximate the previous level in California, we’d need at least $375 million through a combination of earned revenue, philanthropy and government support. If California’s government and tech companies kicked in just one third, that would be at least $125 million per year.
By contrast, Google is committing an average of $11 million per year over five years, while the state is kicking in an average of $14 million.
This is much skimpier than what either Google or the government is doing in Canada. There, Google is paying $47 million a year, even though it earns far more in advertising revenue in California (an estimated $8.6 billion). And the Canadian government’s support for the news industry is more than 600% higher. We need to keep growing the California levels of support, and ensure that this current deal does not become the numerical guidepost for what’s possible or needed in the United States.
But there are some truly positive elements – and lessons for other states and the U.S. Congress.
Focus on local not national news, headcount not page views. An earlier version of one of the California bills (the California Journalism Preservation Act) would have forced Google to subsidize both local and national media outlets, like People or Breitbart, on the basis of their traffic or the number of links that appeared on platforms.
But under this deal, they will support just local newsrooms – where the crisis is – using a formula that focuses on the number of local “news journalists.” Instead of creating incentives for clickbait, they encourage the hiring of reporters. You get more of what you subsidize.
There is a growing understanding that the collapse of local news is a threat to communities, not just an “industry.” A movement has been growing that treats local news as a “civic good,” essential to the healthy functioning of a community. That means that some taxpayer support may be necessary (in addition to advertising, subscriptions and donations). Add up the recent legislative commitments of New York, Illinois, California, New Jersey and Washington, and some $93 million has been secured for local news for the next year.
Don’t undermine the media in the name of saving it. Although the crisis requires some taxpayer support, we must zealously avoid undermining editorial independence. Unlike earlier attempts, neither the bills nor the final deal would empower elected officials to give discretionary grants that could reward or punish news outlets.
Instead, they set up a formula, pegged to the number of editorial employees. It’s a blunt instrument, but the incentives point in the right direction, and the standards are relatively objective.
Lawmakers need to move past the 1990s in their understanding of the local news landscape. Gone are the days when they could dial the newspaper trade association and get a good sense of the interests of local news. The modern community news ecosystem is more varied: nonprofit newsrooms, neighborhood websites, ethnic newspapers, email newsletters, independent weeklies, public radio stations, TV stations, local cable TV news, journalism schools, locally owned dailies and newspaper chains owned by hedge funds.
Decision-makers sometimes act like they’re in a time warp. In California, the governing board that will administer the deal does not require a representative of nonprofits, and public radio was excluded from funding. New York’s law (so far) has excluded nonprofits and “digital only” community websites.
Rethink the approach to tech companies. We have never believed that the entire burden of saving local news should fall on technology companies, but it is reasonable to ask them to play a special role in financing the solution. They have been the big winners of the digital revolution – in part because of excellence and in part because of abusing monopoly power – so they should help fix the collateral damage.
The hot idea until recently was the “bargaining code.” Legislatures force Google to compensate publishers for content they display on search engines or social media platforms. But the California version of the bill, the Local Journalism Preservation Act (AB886), divided the local news sector. Many smaller news outlets blanched because much of the money would have gone to national media and the bill could have devastated their traffic by creating incentives for Facebook and Google to stop running news stories.
Soon, a different approach emerged. Sen. Glazer’s SB1327 provided a refundable tax credit to local newsrooms to hire or retain local reporters – paid for by a fee levied on tech companies that use consumer information to target advertising. Instead of focusing on tech companies “stealing” content, it focused on them luring away advertising. SB1327 taxed not only Google but also Meta, Amazon and possibly other tech companies. It was fairer, more broad-based, and didn’t create incentives for platforms to stop running news.
“The smalls” can have a big impact. In California, Glazer’s bill was thought to be dead on arrival. Tax bills in California require a two-thirds vote, and in this case advocates would have to defeat two California-based goliaths, Alphabet and Meta. What’s more, the corporate newspaper chains declined to back this approach, believing that it would distract from their preferred approach, the bargaining code bill.
But a supportive coalition emerged consisting of small- and medium-sized publishers, labor unions, community foundations, many ethnic publications, civic groups and some chambers of commerce.
In a stunning upset, the bill passed 27-7 in the California Senate.
This victory, along with the earlier passage of the bargaining code bill through the Assembly, put tremendous pressure on Google to settle. The emergence of this new coalition – of community-grounded local media – needs to happen, at scale, all across the country.
Of course, there were limits to their effectiveness. The bills didn’t ultimately pass, and the settlement was considerably smaller. Negotiators rejected Rebuild Local News’ proposal to nudge more money toward smaller players by providing a “guaranteed minimum” of $25,000 per headcount for the first five employees. Both the tech companies and the trade associations representing big newspapers vastly outspent this emerging coalition. As former Pro Publica CEO Richard Tofel put it, “We are knife fighters at a gun fight.”
Local news can and must be nonpartisan. Even in states that don’t need minority-party votes, sponsors need to seek them anyway because supporting local news must be, and be seen as, nonpartisan. Conservative residents suffer as much as progressives, as news sources have disappeared from rural and exurban areas. Hopefully these blue state victories will soon be joined by progress in red states, where lawmakers are considering an idea that might have broader appeal – a tax credit for small businesses that advertise in local news.
Rebuilding local news will require innovation from publishers and journalists, increased philanthropy and, yes, public policy. If we learn from our early experiences, we should be able to make smart policies that truly help local news.
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