Legislative sausage-making is creating some drama around proposals to save local journalism.
Kerfuffles are inevitable with so much at stake.
They should not distract from the bigger picture, which is that major, bipartisan solutions to the local journalism crisis are emerging and taking effect — at the state level, at least.
Progress on California state Sen. Steve Glazer’s “data extraction” tax prompted Google to step up its threats and bullying to block the measure.
The tax on platforms like Google, Facebook and Amazon would raise $500 million a year for local news outlets. It was approved by the Senate appropriations committee May 16 and at my deadline, was awaiting a full Senate vote.
Axios reported that Google told some smaller, nonprofit news organizations that it may stop providing journalism grants nationally if Glazer’s bill takes affect.
I hope they don’t get used as pawns to help a few trillion-dollar companies avoid paying for news.
Sowing division within the industry isn’t new. Tech giants used divide and conquer strategies to slow progress on federal legislation that would save thousands of newsroom jobs.
They also did this when Australia and Canada drafted policies requiring platforms to compensate publishers.
Although such policies stabilize and grow the news ecosystem, their implementation is complicated and sometimes uneven, like pretty much every broad government initiative. Revisions and improvements may be necessary and should be highlighted, but you’ve got to start somewhere.
Yet those wrinkles, and concerns of a few small outlets, were amplified in Australia and Canada. That created uncertainty about the policies’ benefits. It helped the companies weaken the rules and pay less to the news industry.
These tactics are also complicating another California proposal, to get tech giants to pay for news they profit from, through a “journalism usage fee.” It passed the Assembly last summer and is awaiting Senate approval.
There are legitimate concerns for organizations dependent on the platforms.
But if the goal is to revive local journalism, it’s penny wise and pound-foolish to prioritize Google grants over policies that would produce far more revenue, newsroom jobs and independence.
There’s also abundant evidence, detailed by Congressional investigations and federal antitrust cases, that publishers have been shorted by platforms’ anticompetitive business practices.
While that was happening, the Google News Initiative in 2018 began providing around $100 million a year for grants to news organizations globally.
Glazer’s bill would provide $500 million a year just to California outlets — across the board, not just to the relatively few grant winners.
Google declined to comment on the nationwide cuts floated in the Axios story. It did provide a statement from April, on its funding pause in California:
“Until there’s clarity on California’s regulatory environment, we’re also pausing further investments in the California news ecosystem, including new partnerships through Google News Showcase, our product and licensing program for news organizations, and planned expansions of the Google News Initiative,” it said.
Google’s moves, and Facebook’s earlier abandonment of its journalism grants, are the latest reminders that such support is transient. It may be weaponized when platforms aren’t getting their way.
“I think there’s a chance it’s going to backfire — it has in the past,” said Steve Waldman, president of the Rebuild Local News advocacy group.
Waldman noted that Facebook blocking news in Canada last year “gave energy” to the journalism usage bill in California, which passed the state Assembly last June.
Google’s April decision to block access to news on its site for some Californians also “gave extra energy to both bills,” he said.
“I think that’s why some publications that could lose Google News Initiative money nonetheless endorse the (Glazer) bill,” he said.
Another drama surfaced across the country in New York, which last month approved a groundbreaking policy providing tax credits worth $90 million over three years to local news outlets.
Gothamist reported on concerns that some nonprofit news outlets and broadcasters won’t benefit from the policy.
The state is providing eligible outlets credits up to $25,000 per employee, with a cap of $320,000 per news outlet.
Legislators apparently intended for the program to include nonprofit and digital only news outlets but the measure’s language, in the state budget, is ambiguous.
Officials are now drafting the regulations. That should address some concerns, though adjustments may be needed in the next legislative session.
“We’re certainly hopeful digital outlets and nonprofits will be included and we’ll continue to advocate on their behalf,” said Zachary Richner, part of a Long Island newspaper publishing family, who formed an industry coalition to get the legislation passed.
I’m curious about what’s being credited, taxes on income or things like unemployment insurance costs and local levies.
Nonprofit news outlets already receive a subsidy by being exempt from income taxes. If credits are a refund of income taxes, nonprofits could in effect receive a double subsidy.
But nonprofits are an important element of the local-news ecosystem that state and federal policies are intended to help.
New York has 16 nonprofit digital news sites, according to a tally by Northwestern University’s Medill School. That’s about 4% of the state’s 375 local outlets as of May 2024. It has 263 daily and weekly newspapers.
Nationally there are around 6,000 newspapers and 550 digital-only news sites. Of the latter, 25% were local-news nonprofits and 16% were state-news nonprofits, Medill found in 2023.
Perhaps this is inside baseball.
What’s important is that more states are stepping up to save local journalism because it’s a public good that may not survive otherwise.
Brier Dudley on Twitter: @BrierDudley is editor of The Seattle Times Save the Free Press Initiative. Its weekly newsletter: https://st.news/FreePressNewsletter. Reach him at bdudley@seattletimes.com.
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