IN THE TIME BEFORE CELLPHONE, local news outlets relied heavily on advertising for most of their income. In recent decades, much of that advertising has moved to platforms like Google and Facebook and so has local news content. The tech companies could repost local news for free, drawing eyes (and customers) away from local news websites.
This week, two efforts to redirect those advertising profits back into local newsrooms are calling on the California Legislature to hear their proposals. Sept. 12 is the last day to pass bills in the Legislature, and the governor will sign the budget a month later.
CLNM’s proposal: Fund news fellowships
One effort calls for the continued funding of the California Local News Fellowship program. It would be a $15 million annual budget item that would pay the salaries of over 70 journalists on two-year contracts and place them in local newsrooms from San Diego to Eureka.
The project originated in 2023. It was spearheaded by former state Sen. Steve Glazer, who secured funding for the UC Berkeley School of Journalism to administer the program for six years. Just around the Bay Area, local news fellows can be found at San Jose Spotlight, the San Francisco Public Press, the Contra Costa Pulse and Bay City News.
“California’s local news industry is in crisis, with a quarter of the state’s news publications disappearing between 2004 and 2019,” Glazer said in a statement last week. “Many California counties now have a single local news source — or none at all — leaving communities, vulnerable to disinformation, reduced government, accountability, and increased political polarization.”
This week, state Sen. Catherine Blakespear, D-Laguna Hills, and Assemblymember Marc Berman, D-Palo Alto, wrote to legislators asking for funding to continue the fellowship and expand it to the editor level through a program offered by the Robert C. Maynard Institute for Journalism Education.
RLN’s proposal: Make big tech pay
The second effort is led by Rebuild Local News, a nonprofit coalition of independent publishers, TV and radio news representatives, and news labor leaders. Their proposed plan involves requiring companies like Meta and Amazon to contribute annually to a state journalism fund of $125 million. The state would contribute $30 million the first year and grow that in future years.
A small fee would be assessed on the largest tech companies that don’t contribute, and the Legislature would cap the amount that any given company would have to pay in a year. Rules would be established to ensure that elected officials don’t abuse the fund and favor or punish outlets based on their content.
“Amazon just reported their first quarter earnings with $155 billion in revenue and $17 billion in net income, or profit. That’s one quarter,” said Steve Waldman, president of Rebuild Local News, at a group press conference Thursday.
“Earlier in the week, Google reported their revenue is $90 billion and their net income is $35 billion. Meta’s was $42 billion in revenue and $16 billion in profit. There are daily newspapers in California that have not a single reporter. So, this is really whacking California communities in a big way and requires action,” Waldman said.
The Rebuild Local News plan is being endorsed by industry groups such as the California Broadcasters Association, California Independent News Alliance and Public Media Company.
“Google is developing AI models that extract our business model without sending anything back,” said Derek Moore, vice president of the Pacific Media Workers Guild, a union of communication workers. “They use our talent, they use our content, but really what are we getting in return?”
“We know that the new administration wants a dumbed down electorate,” said former Sen. Connie Leyva, who is now executive director of KVCR, the public broadcast station that serves the Inland Empire in Southern California. “We don’t want that. Knowledge is power. And that all happens with local news, local radio.”
In 2005, newspapers employed 365,460 people nationally, according to a report by the Medill Local News Initiative at Northwestern University. By 2023, that number shrank to almost a quarter of that size. In California, the number of employed reporters has decreased 68% since 2002.
On Friday, President Donald Trump signed an executive order directing the board of the Corporation for Public Broadcasting to “cease federal funding for NPR and PBS.” CPB is a publicly funded nonprofit that has helped support local public radio and television stations since 1967. According to Rebuild Local News, many of California’s affiliate stations are the only local news lifeline in underserved communities.
“Our industry is on life support — the only industry that is specifically protected by the Bill of Rights,” said Laura Rearwin Ward of Ojai Valley News. “Google, Meta, and Amazon need to pay for the data they mined for their advertising advantage and mitigate that damage.”
The Rebuild Local News plan stems from events that happened in last year’s legislative session. Two different bills were introduced that would provide support for local news outlets in California.
Senate Bill 1327, proposed by then-Sen. Glazer, would have created tax incentives to newsrooms that hired full-time journalists. On Thursday, Glazer explained that the bill would have required a fee based on a company’s data extraction.
“A billion-dollar assessment on the three biggest platforms in advertising in California,” he said. “And certainly, as we saw from the Google’s third quarter lobbying report last year, they spent $10 million to defeat my bill and Assemblymember Wick’s bill.”
The second bill last year, spearheaded by Assemblymember Buffy Wicks, D-Berkeley, Assembly Bill 886 would have required companies like Google to financially compensate news providers for accessing and using their content.
They use our talent, they use our content, but really what are we getting in return?
Derek Moore, vice president of the Pacific Media Workers Guild
According to the bill’s analysis, opponents were concerned that the state would be hit with costly litigation.
“There was a question about whether those bills, if they passed, would be signed by the governor,” said Rearwin Ward.
Both the bills were shelved when a private settlement was made between Google, Wicks and Gov. Gavin Newsom’s office.
The Google deal was announced by August. Google would contribute $15 million to a state journalism fund for its first year and the state of California will add $30 million. Over the next four years, California’s contribution will drop to $10 million per year and Google’s would rise to least $20 million. Google would continue to support local newsrooms through the Google News Initiative, which provides tools, resources and training to local journalists.
Google would also be able to launch an artificial intelligence “accelerator” designed to support journalists’ work. The media industry unions and other stakeholders were not brought into the deal. The deal’s critics felt it was smaller than the deals Google had previously struck with Australia and Canada.
“There was a lot of distress about my proposal and the Assembly proposal,” said Glazer. “I was aware of the negotiations. I wasn’t privy to the details of them until I was given what I was told was the final agreement. And I found it to be way short, and I didn’t support it. I’m only speculating as to why that agreement happened. But I think you can look at the tea leaves and see what I think we all saw.”
Since then, according to Waldman, no final plan has been unveiled, nor have there been any announcements about other tech companies contributing significantly and no money has been distributed. Waldman said the state’s portion, the $30 million, is in the state budget but it needs to be approved.
“We have gotten little or no outreach from Newsom’s office or the state leaders in the months since then about their intentions for the program, including the proposed AI accelerator,” said Sean Emery of the Southern California News Group Guild. “We’re supposed to be able to oversee this fund. It’s definitely odd that we have not been contacted about it.”
Rebuild Local News sees its plan as an improvement on the Google deal, because it aims to expand the fund by requiring Meta and Amazon to contribute their fair share. It would also extend support to both public and commercial local radio and TV, filling critical gaps in support for community news.
Waldman said the fund would have a diversity of sources and would be controlled independently like tax dollars.
“If you add reporters, you get more. If you cut back reporters, you get less. It’s really tied to the heart of what we’re going for,” he said.
“It’s not someone at the tech company that is making individual decisions — let’s give grants to places we like and take away grants from places we don’t like,” he said. “We don’t want the government to do that either. Any form of support should have that kind of editorial independence embedded into its structure.”
The program would establish a dedicated revenue stream so that the industry is not going back up every year.
“There’s more concern if state legislators get to approve or disapprove of money for the media every single year,” said Rearwin Ward. “We need some firewalls built into the plan so that we aren’t going soft on Sacramento. This is asking legislators to apply a weight to the scale that has been unfairly tipped.”
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